[Congressional Record Volume 150, Number 30 (Wednesday, March 10, 2004)]
[Senate]
[Pages S2550-S2556]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. FEINGOLD (for himself, Mr. McCain, and Mr. Daschle):
  S. 2188. A bill to provide for reform of the Corps of Engineers, and 
for other purposes; to the Committee on Environment and Public Works.
  Mr. FEINGOLD. Mr. President, I rise today to introduce the Corps of 
Engineers Modernization and Improvement Act of 2004. I am pleased to be 
joined by the senior Senator from Arizona, Mr. McCain, who worked with 
me in the 107th Congress to reform the Corps. I also thank the senior 
Senator from South Dakota, Mr. Daschle, who, as the Democratic Leader, 
has long supported Corps reform, for cosponsoring this legislation 
today.
  As we debate the budget resolution this week, we cannot ignore the 
record-breaking deficits that the Nation faces. Fiscal responsibility 
has never been so important. This legislation provides Congress with a 
unique opportunity to underscore our commitment to that goal. Time and 
time again we have heard that fiscal responsibility and environmental 
protection are mutually exclusive. Through this legislation, however, 
we can save taxpayers billions of dollars and protect the environment. 
As evidence of this unique opportunity, this bill is supported by 
Taxpayers for Common$ense, the National Taxpayers Union, the National 
Wildlife Federation, American Rivers, the Corps Reform Network, and 
Earthjustice.
  Reforming the Army Corps of Engineers will be a difficult task for 
Congress. It involves restoring credibility and accountability to a 
Federal agency rocked by scandals and constrained by endlessly growing 
authorizations and a gloomy federal fiscal picture, and yet an agency 
that Wisconsin, and many other states across the country, have come to 
rely upon. From the Great Lakes to the mighty Mississippi, the Corps is 
involved in providing aid to navigation, environmental remediation, 
water control and a variety of other services in my state alone.
  My office has strong working relationships with the Detroit, Rock 
Island, and St. Paul District Offices that service Wisconsin, and I 
want the fiscal and management cloud over the Corps to dissipate so 
that the Corps can continue to contribute to our environment and our 
economy.
  This legislation evolved from my experience in seeking to offer an 
amendment to the Water Resources Development Act of 2000 to create 
independent review of Army Corps of Engineers' projects. In response to 
my initiative, the bill's managers, which included the former Senator 
from New Hampshire, Senator Bob Smith, and the senior Senator from 
Montana, Mr. Baucus, adopted an amendment as part of their managers' 
package to require a National Academy of Sciences study on the issue of 
peer review of Corps projects.
  The bill I introduce today includes many provisions that were 
included in two bills, one of which I authored and the other I 
cosponsored, in the 107th Congress. It codifies the idea of independent 
review of the Corps, which was investigated through the 2000 Water 
Resources bill. It also provides a mechanism to speed up completion of 
construction for good Corps projects with large public benefits by 
deauthorizing low priority and economically wasteful projects.
  I will note, however, that this is not the first time that the 
Congress has realized that the Corps needs to be reformed because of 
its association with pork projects. In 1836, a House Ways and Means 
Committee report discovered that at least 25 Corps projects were over 
budget. In its report, the Committee noted that Congress must ensure 
that the Corps institutes ``actual reform, in the further prosecution 
of public works.'' In 1902, Congress created a review board to 
determine whether Corps projects were justified. The review board was 
dismantled just over a decade ago, and the Corps is still linked with 
wasteful spending. Here we are, more than 100 years later, talking 
about the same issue.
  The reality is that the underlying problem is not with the Corps, the 
problem is with Congress. All too often Members of Congress have seen 
Corps projects as a way to bring home the bacon, rather than ensuring 
that taxpayers get the most bang for their federal buck.
  This bill puts forth bold, comprehensive reform measures. It 
modernizes the Corps project planning guidelines, which have not been 
updated since 1983. It requires the Corps to use sound science in 
estimating the costs and evaluating the needs for water resources 
projects. The bill clarifies that the national economic development and 
environmental protection are co-equal goals of the Corps. Furthermore, 
the Corps must use current discount rates when determining the costs 
and benefits of projects. Several Corps projects are justified using a 
discount rate formula established in 1974, not the current government-
wide discount rate promulgated by the Office of Management and Budget. 
By using this outdated discount rate formula, the Corps often 
overestimates project benefits and underestimates project costs.
  This legislation also requires that a water resource project's 
benefits must be 1.5 times greater than the costs to the taxpayer. 
According to a 2002 study of the Corps backlog of projects, at least 60 
Corps projects, whose combined costs total $4.6 billion, do not meet 
this 1.5 to 1 benefit-cost ratio. Thus, this benefit-cost ratio will 
save the taxpayer billions of dollars. The bill also mandates Federal-
local cost sharing of inland waterways, flood control, and future beach 
renourishment projects, and reduces the Federal cost burden of these 
projects.
  While the bill assumes a flat 50 percent cost-share for flood control 
projects, my home state of Wisconsin has been on the forefront of 
responsible flood plain management and also happens to be home to the 
Association of State Flood Plain Managers. As Congress considers the 
issue of Corps reform and the Water Resources Development Act, I hope 
my colleagues will take a closer look at the issue of a sliding cost 
scale. We should explore the possibility of creating incentives for 
communities with cutting-edge flood plain management practices to 
reduce their local share for projects.
  The bill requires independent review of Corps projects. The National 
Academy of Sciences, the General Accounting Office, and even the 
Inspector General of the Army agree that independent review is an 
essential step to assuring that each Corps project is economically 
justified. Independent review will apply to projects in the following 
circumstances: 1. the project has costs greater than $25 million, 
including mitigation costs; 2. the Governor of a state that is affected 
by the project requests a panel; 3. the head of a Federal agency 
charged with reviewing the project determines that the project is 
likely to have a significant adverse environmental or cultural impact; 
or 4. the Secretary of the Army determines that the project is 
controversial. Any party can request that the Secretary make a 
determination of whether the project is controversial.
  This bill also creates a Director of Independent Review within the 
Office

[[Page S2551]]

of the Inspector General of the Department of the Army. The Director is 
responsible for empaneling experts to review projects. The Secretary is 
required to respond to the panel's report and explain the extent to 
which a final report addresses the panel's concerns. The panel report 
and the underlying data that the Corps uses to justify the project will 
be made available to the public.
  The bill also requires strong environmental protection measures. The 
Corps is required to mitigate the environmental impacts of its projects 
in a variety of ways, including by avoiding damaging wetlands in the 
first place and either holding other lands or constructing wetlands 
elsewhere when it cannot avoid destroying them. The Corps requires 
private developers to meet this standard when they construct projects 
as a condition of receiving a federal permit, and I think the Federal 
Government should live up to the same standards. Too often, the Corps 
does not complete required mitigation and enhances environmental risks.
  I feel very strongly that mitigation must be completed, that the true 
costs of mitigation should be accounted for in Corps projects, and that 
the public should be able to track the progress of mitigation projects. 
The bill requires the Corps to develop a detailed mitigation plan for 
each water resources project, and conduct monitoring to demonstrate 
that the mitigation is working. In addition, the concurrent mitigation 
requirements of this bill would actually reduce the total mitigation 
costs by ensuring the purchase of mitigation lands as soon as possible.

  This bill streamlines the existing automatic deauthorization process. 
Estimates of the project backlog runs from $58 billion to $41 billion. 
Under the bill a project authorized for construction but never started 
is deauthorized if it is denied appropriations funds towards completion 
of construction for five straight years. In addition, a project that 
has begun construction but been denied appropriations funds towards 
completion for three straight years is deauthorized. The bill also 
preserves congressional prerogatives over setting the Corps' 
construction priorities by allowing Congress a chance to reauthorize 
any of these projects before they are automatically deauthorized. This 
process will be transparent to all interests, because the bill requires 
the Corps to make a list of projects in the construction backlog 
available to Congress and the public at large.
  In the past decade, the Corps has routinely strayed from its mission 
of flood control, navigation, and environmental protection. This 
legislation also requires that the Corps stick with its primary 
missions and that any water project that does not have the Corps' 
primary mission of flood control, navigation, or environmental 
protection as its main objective will be deauthorized.
  This legislation will bring out comprehensive revision of the project 
review and authorization procedures at the Army Corps of Engineers. My 
goals for the Corps are to increase transparency and accountability, to 
ensure fiscal responsibility, and to allow greater stakeholder 
involvement in their projects. I remain committed to these goals, and 
to seeing Corps Reform enacted as part of this Congress's Water 
Resources bill.
  I feel that this bill is an important step down the road to a 
reformed Corps of Engineers. This bill establishes a framework to catch 
mistakes by Corps planners, deter any potential bad behavior by Corps 
officials to justify questionable projects, end old unjustified 
projects, and provide planners desperately needed support against the 
never ending pressure of project boosters. Those boosters, include 
congressional interests, which is why I believe that this body needs to 
champion reform--to end the perception that Corps projects are all pork 
and no substance.
  I wish it were the case that the changes we are proposing today were 
not needed, but unfortunately, I see that there is need for this bill. 
I want to make sure that future Corps projects no longer fail to 
produce predicted benefits, stop costing the taxpayers more than the 
Corps estimated, do not have unanticipated environmental impacts, and 
are built in an environmentally compatible way. This bill will help the 
Corps do a better job, which is what the taxpayers and the environment 
deserve.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2188

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Corps of 
     Engineers Modernization and Improvement Act of 2004''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.
Sec. 3. Definitions.

                 TITLE I--MODERNIZING PROJECT PLANNING

Sec. 101. Modern planning principles.
Sec. 102. Independent review.
Sec. 103. Benefit-cost analysis.
Sec. 104. Benefit-cost ratio.
Sec. 105. Cost sharing.

                          TITLE II--MITIGATION

Sec. 201. Full mitigation.
Sec. 202. Concurrent mitigation.
Sec. 203. Mitigation tracking system.

               TITLE III--ADDRESSING THE PROJECT BACKLOG

Sec. 301. Project backlog.
Sec. 302. Primary mission focus.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress finds that--
       (1) the Corps of Engineers is the primary Federal agency 
     responsible for developing and managing the harbors, 
     waterways, shorelines, and water resources of the United 
     States;
       (2) the scarcity of Federal resources requires more 
     efficient use of Corps resources and funding, and greater 
     oversight of Corps analyses;
       (3) appropriate cost sharing ensures efficient measures of 
     project demands and enables the Corps to meet more national 
     project needs;
       (4) the significant demand for recreation, clean water, and 
     healthy wildlife habitat must be fully reflected in the 
     project planning and construction process of the Corps;
       (5) the human health, environmental, and social impacts of 
     dams, levees, shoreline stabilization structures, river 
     training structures, river dredging, and other Corps projects 
     and activities must be adequately considered and, in any case 
     in which adverse impacts cannot be avoided, fully mitigated;
       (6) the National Academy of Sciences has concluded that the 
     Principles and Guidelines for water resources projects need 
     to be modernized and updated to reflect current economic 
     practices and environmental laws and planning guidelines; and
       (7) affected interests must have access to information that 
     will allow those interests to play a larger and more 
     effective role in the oversight of Corps project development 
     and mitigation.
       (b) Purposes.--The purposes of this Act are--
       (1) to ensure that the water resources investments of the 
     United States are economically justified and enhance the 
     environment;
       (2) to provide independent review of feasibility studies, 
     general reevaluation studies, and environmental impact 
     statements of the Corps;
       (3) to ensure timely, ecologically successful, and cost-
     effective mitigation for Corps projects;
       (4) to ensure appropriate local cost sharing to assist in 
     efficient project planning focused on national needs;
       (5) to enhance the involvement of affected interests in 
     feasibility studies, general reevaluation studies, and 
     environmental impact statements of the Corps;
       (6) to modernize planning principles of the Corps to meet 
     the economic and environmental needs of riverside and coastal 
     communities and the nation;
       (7) to ensure that environmental protection and 
     restoration, and national economic development, are co-equal 
     goals, and given co-equal emphasis, during the evaluation, 
     planning, and construction of Corps projects;
       (8) to ensure that project planning, project evaluations, 
     and project recommendations of the Corps are based on sound 
     science and economics and on a full evaluation of the impacts 
     to the health of aquatic ecosystems; and
       (9) to ensure that the determination of benefits and costs 
     of Corps projects properly reflects current law and Federal 
     policies designed to protect human health and the 
     environment.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Academy.--The term ``Academy'' means the National 
     Academy of Sciences.
       (2) Corps.--The term ``Corps'' means the Corps of 
     Engineers.
       (3) Principles and guidelines.--The term ``Principles and 
     Guidelines'' means the principles and guidelines of the Corps 
     for water resources projects (consisting of Engineer 
     Regulation 1105-2-100 and Engineer Pamphlet 1165-2-1).
       (4) Secretary.--The term ``Secretary'' means the Secretary 
     of the Army.

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                 TITLE I--MODERNIZING PROJECT PLANNING

     SEC. 101. MODERN PLANNING PRINCIPLES.

       (a) Planning Principles.--Section 209 of the Flood Control 
     Act of 1970 (42 U.S.C. 1962-2) is amended to read as follows:

     ``SEC. 209. CONGRESSIONAL STATEMENT OF OBJECTIVES.

       ``(a) In General.--It is the intent of Congress that--
       ``(1) national economic development and environmental 
     protection and restoration are co-equal goals of water 
     resources project planning and management; and
       ``(2) Federal agencies manage and, if clearly justified, 
     construct water resource projects--
       ``(A) to meet national economic needs; and
       ``(B) to protect and restore the environment.
       ``(b) Revision of Planning Guidelines, Regulations and 
     Circulars.--Not later than 18 months after the date of 
     enactment of the Corps of Engineers Modernization and 
     Improvement Act of 2004, the Secretary, in collaboration with 
     the National Academy of Sciences, shall develop proposed 
     revisions of, and revise, the planning guidelines, 
     regulations, and circulars of the Corps.
       ``(c) Additional Requirements.--Corps planning regulations 
     revised under subsection (b) shall--
       ``(1) incorporate new and existing analytical techniques 
     that reflect the probability of project benefits and costs;
       ``(2) apply discount rates provided by the Office of 
     Management and Budget;
       ``(3) eliminate biases and disincentives that discourage 
     the use of nonstructural approaches to water resources 
     development and management;
       ``(4) encourage, to the maximum extent practicable, the 
     restoration of ecosystems;
       ``(5) consider the costs and benefits of protecting or 
     degrading natural systems;
       ``(6) ensure that projects are justified by benefits that 
     accrue to the public at large;
       ``(7) ensure that benefit-cost calculations reflect a 
     credible schedule for project construction;
       ``(8) ensure that each project increment complies with 
     section 104;
       ``(9) include as a cost any increase in direct Federal 
     payments or subsidies and exclude as a benefit any increase 
     in direct Federal payments or subsidies; and
       ``(10) provide a mechanism by which, at least once every 5 
     years, the Secretary shall collaborate with the National 
     Academy of Sciences to review, and if necessary, revise all 
     planning regulations, guidelines, and circulars.
       ``(d) National Navigation and Port Plan.--
       ``(1) In general.--Not later than 18 months after the date 
     of enactment of the Corps of Engineers Modernization and 
     Improvement Act of 2004, the Corps shall develop and annually 
     update an integrated, national plan to manage, rehabilitate 
     and, if justified, modernize inland waterway and port 
     infrastructure to meet current national economic and 
     environmental needs.
       ``(2) Tools.--To develop the plan, the Corps shall employ 
     economic tools that--
       ``(A) recognize the importance of alternative 
     transportation destinations and modes; and
       ``(B) employ practicable, cost-effective congestion 
     management alternatives before constructing and expanding 
     infrastructure to increase waterway and port capacity.
       ``(3) Benefits and proximity.--The Corps shall give 
     particular consideration to the benefits and proximity of 
     proposed and existing port, harbor, waterway, rail and other 
     transportation infrastructure in determining whether to 
     construct new water resources projects.
       ``(e) Notice and Comment.--The Secretary shall comply with 
     the notice and comment provisions of chapter 551 of title 5, 
     United States Code, in issuing revised planning regulations, 
     guidelines and circulars.
       ``(f) Applicability.--On completion of the revisions 
     required under this section, the Secretary shall apply the 
     revised regulations to projects for which a draft feasibility 
     study or draft reevaluation report has not yet been issued.
       ``(g) Project Reformulation.--Projects of the Corps, and 
     separable elements of projects of the Corps, that have been 
     authorized for 10 years, but for which less than 15 percent 
     of appropriations specifically identified for construction 
     have been obligated, shall not be constructed unless a 
     general reevaluation study demonstrates that the project or 
     separable element meets--
       ``(1) all project criteria and requirements applicable at 
     the time the study is initiated, including requirements under 
     this section; and
       ``(2) cost share and mitigation requirements of this 
     Act.''.
       (b) Conforming Amendments.--
       (1) Section 80 of the Water Resources Development Act of 
     1974 (42 U.S.C. 1962(d)-17) is repealed.
       (2) Section 7(a) of the Department of Transportation Act 
     (Public Law 89-670; 80 Stat. 941) is repealed.

     SEC. 102. INDEPENDENT REVIEW.

       (a) Definitions.--In this section:
       (1) Affected state.--The term ``affected State'', with 
     respect to a water resources project, means a State or 
     portion of a State that--
       (A) is located, at least partially, within the drainage 
     basin in which the project is carried out; and
       (B) would be economically or environmentally affected as a 
     result of the project.
       (2) Director.--The term ``Director'' means the Director of 
     Independent Review appointed under subsection (c)(1).
       (b) Projects Subject to Independent Review.--
       (1) In general.--The Secretary shall ensure that each 
     feasibility report, general reevaluation report, and 
     environmental impact statement for each water resources 
     project described in paragraph (2) is subject to review by an 
     independent panel of experts established under this section.
       (2) Projects subject to review.--A water resources 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 head of a Federal agency charged with reviewing the 
     project determines that the project is likely to have a 
     significant adverse impact on environmental, cultural, or 
     other resources under the jurisdiction of the agency; or
       (D) the Secretary determines under paragraph (3) that the 
     project is controversial.
       (3) Controversial projects.--
       (A) In general.--The Secretary shall determine that a water 
     resources project is controversial for the purpose of 
     paragraph (2)(D) if the Secretary finds that--
       (i) there is a significant dispute as to the size, nature, 
     or effects of the project;
       (ii) there is a significant dispute as to the economic or 
     environmental costs or benefits of the project; or
       (iii) there is a significant dispute as to the benefits to 
     the communities affected by the project of a project 
     alternative that--

       (I) was not the focus of the feasibility report, general 
     reevaluation report, or environmental impact statement for 
     the project; or
       (II) was not considered in the feasibility report, general 
     reevaluation report, or environmental impact statement for 
     the project.

       (B) Written requests.--Not later than 30 days after the 
     date on which the Secretary receives a written request of any 
     party, or on the initiative of the Secretary, the Secretary 
     shall determine whether a project is controversial.
       (c) Director of Independent Review.--
       (1) Appointment.--The Inspector General of the Army shall 
     appoint in the Office of the Inspector General of the Army a 
     Director of Independent Review.
       (2) Qualifications.--The Inspector General of the Army 
     shall select the Director from among individuals who are 
     distinguished experts in biology, hydrology, engineering, 
     economics, or another discipline relating to water resources 
     management.
       (3) Limitation on appointments.--The Inspector General of 
     the Army shall not appoint an individual to serve as the 
     Director if the individual has a financial interest in or 
     close professional association with any entity with a 
     financial interest in a water resources project that, on the 
     date of appointment of the Director, is--
       (A) under construction;
       (B) in the preconstruction engineering and design phase; or
       (C) under feasibility or reconnaissance study by the Corps.
       (4) Terms.--
       (A) In general.--The term of a Director appointed under 
     this subsection shall be 6 years.
       (B) Term limit.--An individual may serve as the Director 
     for not more than 2 nonconsecutive terms.
       (5) Duties.--The Director shall establish a panel of 
     experts to review each water resources project that is 
     subject to review under subsection (b).
       (d) Establishment of Panels.--
       (1) In general.--After the Secretary selects a preferred 
     alternative for a water resources project subject to review 
     under subsection (b) 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 
     nor more than 9 independent experts (including 1 or more 
     biologists, hydrologists, engineers, and economists) who 
     represent a range of areas of expertise.
       (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 interest in or 
     close professional association with any entity with a 
     financial interest in the project.
       (4) Consultation.--The Director shall consult with the 
     Academy in developing lists of individuals to serve on panels 
     of experts under this section.
       (5) Notification.--
       (A) In general.--To ensure that the Director is able to 
     effectively carry out the duties of the Director under this 
     section, the Secretary shall notify the Director in writing 
     not later than 90 days before the release of a draft 
     feasibility report, draft general reevaluation report, or 
     draft environmental impact statement, for every water 
     resources project.
       (B) Contents.--The notification shall include--
       (i) the estimated cost of the project; and
       (ii) a preliminary assessment of whether a panel of experts 
     may be required.

[[Page S2553]]

       (6) 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 of the Army.
       (7) Travel expenses.--A member of a panel of experts under 
     this section shall be allowed travel expenses, including per 
     diem in lieu of subsistence, at rates authorized for an 
     employee of an agency under subchapter I of chapter 57 of 
     title 5, United States Code, while away from the home or 
     regular place of business of the member in the performance of 
     the duties of the panel.
       (e) Duties of Panels.--
       (1) In general.--A panel of experts established for a water 
     resources project under this section shall--
       (A) review each draft feasibility report, draft general 
     reevaluation report, and draft environmental impact statement 
     prepared for the project;
       (B) assess the adequacy of the economic, scientific, and 
     environmental models used by the Secretary in reviewing the 
     project to ensure that--
       (i) the best available economic and scientific methods of 
     analysis have been used;
       (ii) the best available economic, scientific, and 
     environmental data have been used; and
       (iii) any regional effects on navigation systems have been 
     examined;
       (C) receive from the public written and oral comments 
     concerning the project;
       (D) not later than the deadline established under 
     subsection (f), submit to the Secretary a report concerning 
     the economic, engineering, and environmental analyses of the 
     project, including the conclusions of the panel, with 
     particular emphasis on areas of public controversy, with 
     respect to the feasibility report, general reevaluation 
     report, or environmental impact statement; and
       (E) not later than 30 days after the date of issuance of a 
     final feasibility report, final general reevaluation report, 
     or final environmental impact statement, submit to the 
     Secretary a brief report stating the views of the panel on 
     the extent to which the final analysis adequately addresses 
     issues or concerns raised by each earlier evaluation by the 
     panel.
       (2) Extensions.--
       (A) In general.--The panel may request from the Director a 
     30-day extension of the deadline established under paragraph 
     (1)(E).
       (B) Record of decision.--The Secretary shall not issue a 
     record of decision until after, at the earliest--
       (i) the final day of the 30-day period described in 
     paragraph (1)(E); or
       (ii) if the Director grants an extension under subparagraph 
     (A), the final day of end of the 60-day period beginning on 
     the date of issuance of a final feasibility report described 
     in paragraph (1)(E) and ending on the final day of the 
     extension granted under subparagraph (A).
       (f) Duration of Project Reviews.--
       (1) Deadline.--Except as provided in paragraph (2), not 
     later than 180 days after the date of establishment of a 
     panel of experts for a water resources project under this 
     section, the panel shall complete--
       (A) each required review of the project; and
       (B) all other duties of the panel relating to the project 
     (other than the duties described in subsection (e)(1)(E)).
       (2) Extension of deadline for report on project reviews.--
     Not later than 240 days after the date of issuance of a draft 
     feasibility report, draft general reevaluation report, or 
     draft environmental impact statement for a project, if a 
     panel of experts submits to the Director before the end of 
     the 180-day period described in paragraph (1), and the 
     Director approves, a request for a 60-day extension of the 
     deadline established under that paragraph, the panel of 
     experts shall submit to the Secretary a report required under 
     subsection (e)(1)(D).
       (g) Recommendations of Panel.--
       (1) Consideration by secretary.--
       (A) In general.--If the Secretary receives a report on a 
     water resources project from a panel of experts under this 
     section by the applicable deadline under subsection (e)(1)(E) 
     or (f), the Secretary shall, at least 14 days before entering 
     a final record of decision for the water resources project--
       (i) take into consideration any recommendations contained 
     in the report; and
       (ii) prepare a written explanation for any recommendations 
     not adopted.
       (B) Inconsistent recommendations and findings.--
     Recommendations and findings of the Secretary that are 
     inconsistent with the recommendations and findings of a panel 
     of experts under this section shall not be entitled to 
     deference in a judicial proceeding.
       (2) Public review; submission to congress.--After receiving 
     a report on a water resources project from a panel of experts 
     under this section (including a report under subsection 
     (e)(1)(E)), the Secretary shall--
       (A) immediately make a copy of the report (and, in a case 
     in which any written explanation of the Secretary on 
     recommendations contained in the report is completed, shall 
     immediately make a copy of the response) available for public 
     review; and
       (B) include a copy of the report (and any written 
     explanation of the Secretary) in any report submitted to 
     Congress concerning the project.
       (h) Public Access to Information.--
       (1) In general.--Except as provided in paragraph (3), the 
     Secretary shall ensure that information relating to the 
     analysis of any water resources project by the Corps, 
     including all supporting data, analytical documents, and 
     information that the Corps has considered in the analysis, is 
     made available--
       (A) to any individual upon request;
       (B) to the public on the Internet; and
       (C) to an independent review panel, if such a panel is 
     established for the project.
       (2) Types of information.--Information concerning a project 
     that is available under paragraph (1) shall include--
       (A) any information that has been made available to the 
     non-Federal interests with respect to the project; and
       (B) all data and information used by the Corps in the 
     justification and analysis of the project.
       (3) Exception for trade secrets.--
       (A) In general.--The Secretary shall not make information 
     available under paragraph (1) that the Secretary determines 
     to be a trade secret of any person that provided the 
     information to the Corps.
       (B) Criteria for trade secrets.--The Secretary shall 
     consider information to be a trade secret only if--
       (i) the person that provided the information to the Corps--

       (I) has not disclosed the information to any person other 
     than--

       (aa) an officer or employee of the United States or a State 
     or local government;
       (bb) an employee of the person that provided the 
     information to the Corps; or
       (cc) a person that is bound by a confidentiality agreement; 
     and

       (II) has taken reasonable measures to protect the 
     confidentiality of the information and intends to continue to 
     take the measures;

       (ii) the information is not required to be disclosed, or 
     otherwise made available, to the public under any other 
     Federal or State law; and
       (iii) disclosure of the information is likely to cause 
     substantial harm to the competitive position of the person 
     that provided the information to the Corps.
       (i) Costs.--
       (1) Limitation on cost of review.--The cost of conducting a 
     review of a water resources project under this section shall 
     not exceed--
       (A) $250,000 for a project, if the total cost of the 
     project in current year dollars is less than $50,000,000; and
       (B) 0.5 percent of the total cost of the project in current 
     year dollars, if the total cost is $50,000,000 or more.
       (2) Treatment.--The cost of conducting a review of a 
     project under this section shall be considered to be part of 
     the total cost of the project.
       (3) Cost sharing.--A review of a project under this section 
     shall be subject to section 105(a) of the Water Resources 
     Development Act of 1986 (33 U.S.C. 2215(a)).
       (4) Waiver of limitation.--The Secretary may waive a 
     limitation under paragraph (1) if the Secretary determines 
     that the waiver is appropriate.
       (j) 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. 103. BENEFIT-COST ANALYSIS.

        Section 308(a) of the Water Resources Development Act of 
     1990 (33 U.S.C. 2318(a)) is amended--
       (1) in paragraph (1)(B), by striking ``and'' at the end;
       (2) in paragraph (2), by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(3) any projected benefit attributable to any change in, 
     or intensification of, land use arising from the draining, 
     reduction, or elimination of wetlands.''.

     SEC. 104. BENEFIT-COST RATIO.

       (a) Recommendation of Projects.--Beginning in fiscal year 
     2004, in the case of a water resources project that is 
     subject to a benefit-cost analysis, the Secretary may 
     recommend the project for authorization by Congress, and may 
     choose the project as a recommended alternative in any record 
     of decision or environmental impact statement, only if the 
     project, in addition to meeting any other criteria required 
     by law, has projected national benefits that are at least 1.5 
     times as great as the estimated total costs of the project, 
     based on current discount rates provided by the Office of 
     Management and Budget.
       (b) Review and Deauthorization of Projects.--
       (1) Review.--Not later than 180 days after the date of 
     enactment of this Act, the Secretary shall review each water 
     resources project described in paragraph (2) to determine 
     whether the projected benefits of the project are less than 
     1.5 times as great as the estimated total costs of the 
     project.
       (2) Projects subject to review.--A water resources project 
     shall be subject to review under paragraph (1) if--
       (A) the project was authorized before the date on which the 
     review is commenced;
       (B) the project is subject to a benefit-cost analysis; and
       (C) an amount that is less than 33 percent of the estimated 
     total costs of the project (excluding costs of 
     preconstruction engineering and design) has been obligated 
     for the project.
       (3) Deauthorizations.--
       (A) In general.--On completion of the review under 
     paragraph (1), the Secretary shall submit to Congress a list 
     that describes each water resources project the projected 
     benefits of which are less than 1.5 times as great as the 
     estimated total costs of the project.

[[Page S2554]]

       (B) Projects.--A project included on the list under 
     subparagraph (A) shall be deauthorized effective beginning 3 
     years after the date of submission of the list to Congress 
     unless, during that 3-year period, Congress reauthorizes the 
     project.
       (4) Deauthorized projects for which construction has been 
     commenced.--In the case of a water resources project that is 
     deauthorized under paragraph (3) and for which construction 
     (other than preconstruction engineering and design) has been 
     commenced, the Secretary may take such actions as are 
     necessary with respect to the project to protect public 
     health and safety and the environment.

     SEC. 105. COST SHARING.

       (a) Inland Waterways.--
       (1) Construction.--Section 102(a) of the Water Resources 
     Development Act of 1986 (33 U.S.C. 2212(a)) is amended--
       (A) in the first sentence, by striking ``One-half of the 
     costs of construction'' and inserting ``Forty-five percent of 
     the costs of construction''; and
       (B) by striking the second sentence and inserting ``Fifty-
     five percent of those costs shall be paid only from amounts 
     appropriated from the Inland Waterways Trust Fund.''.
       (2) Operations and maintenance.--Section 102 of the Water 
     Resources Development Act of 1986 (33 U.S.C. 2212) is amended 
     by striking subsections (b) and (c) and inserting the 
     following:
       ``(b) Operation and Maintenance.--
       ``(1) Federal share.--The Federal share of the cost of 
     operation and maintenance shall be 100 percent in the case 
     of--
       ``(A) a project described in paragraph (1) or (2) of 
     subsection (a); or
       ``(B) the portion of the project authorized by section 844 
     that is allocated to inland navigation.
       ``(2) Source of federal share.--
       ``(A) General fund.--In the case of a project described in 
     paragraph (1) or (2) of subsection (a) with respect to which 
     the cost of operation and maintenance is less than or equal 
     to 2 cents per ton mile, or in the case of the portion of the 
     project authorized by section 844 that is allocated to inland 
     navigation, the Federal share under paragraph (1) shall be 
     paid only from amounts appropriated from the general fund of 
     the Treasury.
       ``(B) General fund and inland waterways trust fund.--In the 
     case of a project described in paragraph (1) or (2) of 
     subsection (a) with respect to which the cost of operation 
     and maintenance is greater than 2 but less than or equal to 
     10 cents per ton mile--
       ``(i) 75 percent of the Federal share under paragraph (1) 
     shall be paid only from amounts appropriated from the general 
     fund of the Treasury; and
       ``(ii) 25 percent of the Federal share under paragraph (1) 
     shall be paid only from amounts appropriated from the Inland 
     Waterways Trust Fund.
       ``(C) Inland waterways trust fund.--In the case of a 
     project described in paragraph (1) or (2) of subsection (a) 
     with respect to which the cost of operation and maintenance 
     is greater than 10 cents per ton mile but less than 30 cents 
     per ton mile, 100 percent of the Federal share under 
     paragraph (1) shall be paid only from amounts appropriated 
     from the Inland Waterways Trust Fund.
       ``(D) Non-federal responsibility.--
       ``(i) In general.--In the case of a project described in 
     paragraph (1) or (2) of subsection (a) with respect to which 
     the cost of operation and maintenance is greater than 30 
     cents per ton-mile, the cost of operations and maintenance 
     shall be a non-Federal responsibility.
       ``(ii) Deauthorization.--In a case in which the Secretary 
     determines that the non-Federal interests for a project 
     described in clause (i) are unable to pay for the cost of 
     operations and maintenance of the project, the project is 
     deauthorized as of the date of that determination.''.
       (b) Flood Damage Reduction.--Section 103 of the Water 
     Resources Development Act of 1986 (33 U.S.C. 2213) is 
     amended--
       (1) in subsections (a)(2) and (b), by striking ``35'' each 
     place it appears and inserting ``50'';
       (2) in the paragraph heading of subsection (a)(2), by 
     striking ``35 percent minimum''' and inserting ``Minimum'''; 
     and
       (3) in the paragraph heading of subsection (b), by striking 
     ``35'' and inserting ``50''.
       (c) Beach Replacement.--Section 103(d)(2)(A) of the Water 
     Resources Development Act of 1986 (33 U.S.C. 2213(d)(2)) is 
     amended--
       (1) by redesignating subparagraphs (B) and (C) as 
     subparagraphs (C) and (D), respectively; and
       (2) by inserting after subparagraph (A) the following:
       ``(B) 2004 and subsequent projects.--For any project 
     authorized after the date of enactment of the Corps of 
     Engineers Modernization and Improvement Act of 2004, 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.''.

                          TITLE II--MITIGATION

     SEC. 201. FULL MITIGATION.

        Section 906(d) of the Water Resources Development Act of 
     1986 (33 U.S.C. 2283(d)) is amended--
       (1) by striking paragraph (1) and inserting the following:
       ``(1) Projects.--
       ``(A) In general.--After November 17, 1986, the Secretary 
     shall not submit to Congress any proposal for the 
     authorization of any water resources project, and shall not 
     choose a project alternative in any final record of decision, 
     environmental impact statement, or environmental assessment, 
     unless the report contains--
       ``(i) a specific plan to fully mitigate losses of aquatic 
     and terrestrial resources and fish and wildlife created by 
     the project; or
       ``(ii) a determination by the Secretary that the project 
     will have negligible adverse impact on aquatic and 
     terrestrial resources and fish and wildlife.
       ``(B) Specific requirements.--Specific mitigation plans 
     shall ensure that impacts to bottomland hardwood forests and 
     other habitat types are mitigated in kind.
       ``(C) Consultation.--In carrying out this paragraph, the 
     Secretary shall consult with appropriate Federal and non-
     Federal agencies.''; and
       (2) by adding at the end the following:
       ``(3) Standards for mitigation.--
       ``(A) In general.--To fully mitigate losses to fish and 
     wildlife resulting from a water resources project, the 
     Secretary shall, at a minimum--
       ``(i) acquire and restore 1 acre of superior or equivalent 
     habitat of the same type to replace each acre of habitat 
     adversely affected by the project; and
       ``(ii) replace the hydrologic functions and 
     characteristics, the ecological functions and 
     characteristics, and the spatial distribution of the habitat 
     adversely affected by the project.
       ``(B) Detailed mitigation plan.--The specific mitigation 
     plan for a water resources project under paragraph (1) shall 
     include, at a minimum--
       ``(i) a detailed and specific plan to monitor mitigation 
     implementation and ecological success, including the 
     designation of the entities that will be responsible for 
     monitoring;
       ``(ii) specific ecological success criteria by which the 
     mitigation will be evaluated and determined to be successful, 
     prepared in consultation with the United States Fish and 
     Wildlife Service;
       ``(iii) a detailed description of the land and interests in 
     land to be acquired for mitigation and the basis for a 
     determination that land and interests are available for 
     acquisition;
       ``(iv) sufficient detail regarding the chosen mitigation 
     sites and type and amount of restoration activities to permit 
     a thorough evaluation of the plan's likelihood of ecological 
     success and resulting aquatic and terrestrial resource 
     functions and habitat values; and
       ``(v) a contingency plan for taking corrective actions if 
     monitoring demonstrates that mitigation efforts are not 
     achieving ecological success as described in the ecological 
     success criteria.
       ``(C) Applicable law.--A time period for mitigation 
     monitoring or for the implementation and monitoring of 
     contingency plan actions shall not be subject to the 
     deadlines described in section 202.
       ``(4) Determination of mitigation success.--
       ``(A) In general.--Mitigation shall be considered to be 
     successful at the time at which monitoring demonstrates that 
     the mitigation has met the ecological success criteria 
     established in the mitigation plan.
       ``(B) Requirements for success.--To ensure the success of 
     any attempted mitigation, the Secretary shall--
       ``(i) consult yearly with the United States Fish and 
     Wildlife Service on each water resources project requiring 
     mitigation to determine whether mitigation monitoring for 
     that project demonstrates that the project is achieving, or 
     has achieved, ecological success;
       ``(ii) ensure that implementation of the mitigation 
     contingency plan for taking corrective action begins not 
     later than 30 days after a finding by the Secretary or the 
     United States Fish and Wildlife Service that the original 
     mitigation efforts likely will not result in, or have not 
     resulted in, ecological success;
       ``(iii) complete implementation of the contingency plan as 
     expeditiously as practicable; and
       ``(iv) ensure that monitoring of mitigation efforts, 
     including those implemented through a mitigation contingency 
     plan, continues until the monitoring demonstrates that the 
     mitigation has met the ecological success criteria.
       ``(5) Recommendation of projects.--The Secretary shall not 
     recommend a water resources project alternative or choose a 
     project alternative in any final record of decision, 
     environmental impact statement, or environmental assessment 
     completed after the date of enactment of this paragraph 
     unless the Secretary determines that the mitigation plan for 
     the alternative will successfully mitigate the adverse 
     impacts of the project on aquatic and terrestrial resources, 
     hydrologic functions, and fish and wildlife.
       ``(6) Completion of mitigation before construction of new 
     projects.--The Secretary shall complete all promised 
     mitigation for water resources projects in a particular 
     watershed before constructing any new water resources project 
     in that watershed.''.

     SEC. 202. CONCURRENT MITIGATION.

        Section 906(a) of the Water Resources Development Act of 
     1986 (33 U.S.C. 2283(a)) is amended--
       (1) by striking ``(a)(1) In the case'' and inserting the 
     following:

[[Page S2555]]

       ``(a) Mitigation.--
       ``(1) In general.--In the case'';
       (2) in paragraph (1), by striking ``interests--'' and all 
     that follows through ``losses),'' and inserting the 
     following: ``interests shall be undertaken or acquired--
       ``(A) before any construction of the project (other than 
     such acquisition) commences; or
       ``(B) concurrently with the acquisition of land and 
     interests in land for project purposes (other than mitigation 
     of fish and wildlife losses);'';
       (3) in paragraph (2), by striking ``(2) For the purposes'' 
     and inserting the following:
       ``(2) Commencement of construction.--For the purpose''; and
       (4) by adding at the end the following:
       ``(4) Implementation.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     to ensure concurrent mitigation, the Secretary shall 
     implement--
       ``(i) 50 percent of required mitigation before beginning 
     construction of a project; and
       ``(ii) the remainder of required mitigation as 
     expeditiously as practicable, but not later than the last day 
     of construction of the project or separable element of the 
     project.
       ``(B) Exception for physical impracticability.--In a case 
     in which the Secretary determines that it is physically 
     impracticable to complete mitigation by the last day of 
     construction of the project or separable element of the 
     project, the Secretary shall reserve or reprogram sufficient 
     funds to ensure that mitigation implementation is completed 
     as expeditiously as practicable, but in no case later than 
     the end of the next fiscal year immediately following the 
     last day of that construction.
       ``(5) Use of funds.--Funds made available for preliminary 
     engineering and design, construction, or operations and 
     maintenance shall be available for use in carrying out this 
     section.''.

     SEC. 203. MITIGATION TRACKING SYSTEM.

       (a) In General.--Not later than 180 days after the date of 
     enactment of this Act, the Secretary shall establish a 
     recordkeeping system to track each water resources project 
     constructed, operated, or maintained by the Secretary, and 
     for each permit issued under section 404 of the Federal Water 
     Pollution Control Act (33 U.S.C. 1344)--
       (1) the quantity and type of wetland and other habitat 
     types affected by the project, project operation, or 
     permitted activity;
       (2) the quantity and type of mitigation required for the 
     project, project operation or permitted activity;
       (3) the quantity and type of mitigation that has been 
     completed for the project, project operation or permitted 
     activity; and
       (4) the status of monitoring for the mitigation carried out 
     for the project, project operation or permitted activity.
       (b) Required Information and Organization.--The 
     recordkeeping system shall--
       (1) include information on impacts and mitigation described 
     in subsection (a) that occur after December 31, 1969; and
       (2) be organized by watershed, project, permit application, 
     and zip code.
       (c) Availability of Information.--The Secretary shall make 
     information contained in the recordkeeping system available 
     to the public on the Internet.

               TITLE III--ADDRESSING THE PROJECT BACKLOG

     SEC. 301. PROJECT BACKLOG.

       (a) Review and Report on Water Resources Construction 
     Backlog.--
       (1) Definitions.--In this subsection:
       (A) Active.--The term ``active'', with respect to a 
     project, means that--
       (i) the project is economically justified;
       (ii) the project has received funding for--

       (I) preconstruction engineering and design; or
       (II) construction; and

       (iii) the non-Federal interests with respect to the project 
     have demonstrated willingness and the ability to provide the 
     required non-Federal share.
       (B) Deferred.--The term ``deferred'', with respect to a 
     project, means that the project--
       (i) has doubtful economic justification;
       (ii) requires reevaluation to determine the economic 
     feasibility of the project; or
       (iii) is a project for which the non-Federal interests are 
     unable to provide required cooperation.
       (C) Inactive.--The term ``inactive'', with respect to a 
     project, means that--
       (i) the project is not economically justified;
       (ii) the project no longer meets current and prospective 
     needs as described in a feasibility report or general 
     reevaluation report;
       (iii) the non-Federal interests with respect to the project 
     have not demonstrated willingness or the ability to provide 
     the required non-Federal share; or
       (iv)(I) the project most recently received, under an Act of 
     Congress, authorization or reauthorization of construction 
     more than 25 years before the date of enactment of this Act; 
     and
       (II) an amount that is less than 33 percent of the 
     estimated total costs of the project (excluding costs of 
     preconstruction engineering and design) has been obligated 
     for the project as of the date of enactment of this Act.
       (D) Project.--The term ``project'' means a water resources 
     project, or a separable element of a water resources project, 
     that is authorized by law for funding from--
       (i) the Construction, General, appropriations account; or
       (ii) the construction portion of the Flood Control, 
     Mississippi River and Tributaries, appropriations account.
       (2) Study.--
       (A) In general.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary shall submit to the 
     Committee on Environment and Public Works of the Senate and 
     the Committee on Transportation and Infrastructure of the 
     House of Representatives a study consisting of--
       (i) the list described in subparagraph (B); and
       (ii) the information described in subparagraph (C).
       (B) List.--The list referred to in subparagraph (A) is a 
     list of all authorized water resources projects--
       (i) that have not been commenced; or
       (ii) the construction of which has not been completed.
       (C) Required information.--Each project on the list 
     described in subparagraph (B) shall be accompanied by 
     information on--
       (i) the primary purpose of the project;
       (ii) the year in which construction of the project was 
     commenced;
       (iii) the total estimated cost of the project in current 
     year dollars;
       (iv) the benefit-cost ratio of the project, determined 
     based on current discount rates;
       (v) the estimated annual benefits and annual costs of the 
     project;
       (vi) the remaining additional benefits and the remaining 
     additional costs to complete construction of the project 
     (including the ratio that remaining benefits bear to 
     remaining costs);
       (vii)(I) the year during which the most recent major 
     studies of the feasibility and design of the project were 
     completed; and
       (II) the year during which the most recent environmental 
     impact statement or environmental assessment for the project 
     was completed;
       (viii) the date of the last year for which economic data 
     that was included in the most recent analysis of the 
     feasibility and justification of the project was collected;
       (ix) the status of each project as--

       (I) reconnaissance, preconstruction engineering and design, 
     or construction; and
       (II) active, deferred, or inactive; and

       (x) the information described in paragraph (3) for each 
     particular type of project.
       (3) Information for particular project type.--The study 
     under paragraph (2) shall include--
       (A) in the case of 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)(I) the level of flood protection provided; and
       (II) to the maximum extent practicable, the extent to which 
     the project is based on projected growth and the basis for 
     each projection of growth; and
       (iii) the extent to which the project--

       (I) restores natural aquatic ecosystem functions; and
       (II) avoids adverse environmental impacts and risk before 
     implementation of mitigation activities;

       (B) in the case of a navigation project--
       (i)(I) the extent to which the economic benefits of the 
     project are based on existing levels of commercial traffic 
     rather than projected growth in commercial traffic; and
       (II) to the maximum extent practicable, the extent to which 
     the project is based on projected growth and the basis for 
     each projection of growth; and
       (ii) the extent of the likely environmental benefits of the 
     project, including the extent of--

       (I) remediation of contaminated sediments, or reuse of 
     dredged material, to restore aquatic habitat; and
       (II) adverse environmental impacts and risks of the 
     project; and

       (C) in the case of an environmental restoration project--
       (i) the extent to which the project--

       (I) restores natural hydrologic processes and the spatial 
     extent of aquatic habitat; and
       (II) otherwise produces self-sustaining environmental 
     benefits; and

       (ii) the extent to which the project addresses critical 
     national conservation priorities, including preservation and 
     protection of endangered and threatened species or habitat of 
     endangered and threatened species.
       (4) Measurement and reporting.--
       (A) In general.--The Secretary shall use objective and 
     quantifiable standards for measuring and reporting the 
     information required to be submitted under paragraph (3).
       (B) Alternative method of reporting.--In any case in which 
     the information required to be submitted under subparagraph 
     (B)(ii) or (C) of paragraph (3) cannot be quantified, the 
     information shall be reported through an objective 
     description of the benefits and impacts of the applicable 
     project.
       (5) Availability to the public.--The study submitted to 
     Congress under paragraph (2) shall be made available to--
       (A) any person on request; and
       (B) the public on the Internet.
       (b) Project Deauthorizations.--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) Definitions.--In this section:
       ``(1) Construction of a project.--The term `construction of 
     a project' means--

[[Page S2556]]

       ``(A) with respect to a flood control project--
       ``(i) the acquisition of land, an easement, or a right-of-
     way; or
       ``(ii) the performance of physical work under a 
     construction contract;
       ``(B) with respect to an environmental protection and 
     restoration project--
       ``(i) the acquisition of land, an easement, or a right-of-
     way primarily to facilitate the restoration of wetland or 
     similar habitat; or
       ``(ii) the performance of physical work under a 
     construction contract--

       ``(I) to modify an existing project facility; or
       ``(II) to construct a new environmental protection or 
     restoration measure;

       ``(C) with respect to a shore protection project--
       ``(i) the acquisition of land, an easement, or a right-of-
     way; or
       ``(ii) the performance of physical work under a 
     construction contract for a structural or a nonstructural 
     measure; and
       ``(D) with respect to any project that is not described in 
     subparagraph (A), (B), or (C), the performance of physical 
     work under a construction contract.
       ``(2) Inactive.--The term `inactive', with respect to a 
     project, means that--
       ``(A) the project is not economically justified;
       ``(B) the project no longer meets current and prospective 
     needs as described in a feasibility report or general 
     reevaluation report;
       ``(C) the non-Federal interests with respect to the project 
     have not demonstrated willingness or the ability to provide 
     the required non-Federal share; or
       ``(D)(i) the project most recently received, under an Act 
     of Congress, authorization or reauthorization for 
     construction more than 25 years before the date of enactment 
     of this subparagraph; and
       ``(ii) an amount that is less than 33 percent of the 
     estimated total costs of the project (excluding costs of 
     preconstruction engineering and design) has been obligated 
     for the project as of the date of enactment of this 
     subparagraph.
       ``(3) Physical work under a construction contract.--The 
     term `physical work under a construction contract' does not 
     include any activity relating to--
       ``(A) project planning;
       ``(B) engineering and design;
       ``(C) relocation; or
       ``(D) the acquisition of land, an easement, or a right-of-
     way.
       ``(4) Project.--The term `project' means a water resources 
     project, or a separable element of a water resources project, 
     that is authorized by law for funding from--
       ``(A) the Construction, General, appropriations account; or
       ``(B) the construction portion of the Flood Control, 
     Mississippi River and Tributaries, appropriations account.
       ``(b) Inactive Projects.--
       ``(1) List.--Not later than December 31, 2004, and 
     biennially thereafter, the Secretary shall submit to Congress 
     a list of inactive projects.
       ``(2) Deauthorization.--An inactive project shall be 
     deauthorized effective beginning 1 year after the date of 
     submission of a list under paragraph (1) that includes the 
     project unless, during that 1-year period, Congress 
     reauthorizes the project in accordance with the Corps of 
     Engineers Modernization and Improvement Act of 2004 and the 
     amendments made by that Act.
       ``(c) Projects for Which Actual Construction Has Not 
     Begun.--
       ``(1) List.--The Secretary shall annually submit to 
     Congress a list of projects that have been authorized for 
     construction, but for which no actual construction has begun 
     and no Federal funds have been obligated for construction 
     during the 3 consecutive fiscal years preceding the fiscal 
     year in which the list is submitted.
       ``(2) Deauthorization.--A project authorized for 
     construction that is not subject to subsection (b) shall be 
     deauthorized effective beginning 5 years after the date of 
     the most recent authorization or reauthorization of the 
     project unless, during that 5-year period, Federal funds are 
     obligated for construction of the project.
       ``(d) Projects for Which Construction Has Been Suspended.--
       ``(1) List.--The Secretary shall annually submit to 
     Congress a list of projects--
       ``(A) that have been authorized for construction; and
       ``(B) for which no Federal funds have been obligated for 
     construction during the 2 consecutive fiscal years preceding 
     the date of submission of the list.
       ``(2) Deauthorization.--A project that is not subject to 
     subsection (b) but for which Federal funds have been 
     obligated for construction of the project shall be 
     deauthorized if Federal funds appropriated specifically for 
     construction of the project, as indicated in an Act of 
     Congress or in accompanying legislative report language, are 
     not obligated for construction of the project during the 
     period of 3 fiscal years following the last fiscal year in 
     which Federal funds were obligated for construction of the 
     project.
       ``(e) Completed Projects.--Subsections (b), (c), and (d) 
     shall not apply--
       ``(1) in the case of a beach nourishment project, after 
     initial construction of the project has been completed; or
       ``(2) in the case of any other project, after construction 
     of the project has been completed.
       ``(f) Congressional Notifications.--On submission of a list 
     under subsection (b), (c), or (d), the Secretary shall notify 
     each Senator in whose State, and each Member of the House of 
     Representatives in whose district, a project on the list is 
     or would be located.
       ``(g) Final Deauthorization List.--The Secretary shall 
     annually publish in the Federal Register a list of all 
     projects deauthorized under subsections (b), (c), and (d).''.
       (c) Waterways.--
       (1) Report by academy.--
       (A) In general.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary shall enter into a 
     contract with the Academy to prepare a report on waterways in 
     the Inland Waterways System.
       (B) Contents of report.--The report shall--
       (i) review the Inland Waterways System;
       (ii) provide data on the commercial traffic being carried 
     by each waterway in the System as of the date of the report;
       (iii) provide an analysis of the extent to which prior 
     projections of the commercial traffic carried by each 
     waterway in the System were accurate; and
       (iv) based on the information provided under clauses (ii) 
     and (iii)--
       (I) identify underused waterways in the System;
       (II) propose new economic and environmental uses for 
     underused waterways;
       (III) describe statutory and administrative reforms that 
     are needed to ease the transition from the current authorized 
     uses of the System to new economic and environmental uses of 
     the System; and
       (IV) recommend which waterways in the System should be 
     decommissioned.
       (2) Decommissioning mechanism for underused waterways.--Not 
     later than 1 year after the date of enactment of this Act, 
     the Secretary shall by regulation establish a mechanism for 
     the decommissioning of waterways that--
       (A) are no longer economically justified, based on 
     commercial traffic and current discount rates; or
       (B) are no longer in the national interest.

     SEC. 302. PRIMARY MISSION FOCUS.

       Any water resources project that does not have as a primary 
     project purpose 1 of the primary Corps missions of 
     environmental protection, flood control, or navigation and 
     that, as of the date of enactment of this section, has no 
     appropriated construction funding, is deauthorized.

  Mr. McCAIN. Madam President, I am pleased to join my friend, Senator 
Feingold in cosponsoring this important and timely legislation. Today, 
the Senate is deliberating over the nation's budget priorities in the 
face of our enormous deficit.
  Historically, Congress has considered water projects, costing many 
billions of taxpayer dollars, as essential expenditures--regardless of 
the environmental costs or public benefits. The reforms of the Corps of 
Engineers' procedures in this bill are designed to achieve more cost-
effective expenditures for water projects that will yield more 
environmental, economic, and social benefits. The need for these 
changes has been acknowledged by many for some time, but never has the 
need to spend scarce taxpayer dollars wisely been as crucial as it is 
now.
  The Corps procedures for planning and approving projects, as well as 
the Congressional system for funding projects, are broken, but they can 
be effectively fixed. In fact, the reforms in this bill are based on 
thorough program analysis and common sense. I commend Senator Feingold 
for building on the legislation we introduced with Senator Smith in the 
last Congress to provide additional improvements. It is surprising that 
Congress hasn't already put these procedures in place, but there is no 
time or need like the present.
  Provisions of the legislation we are introducing today would modify 
the Corps planning and approval procedures to consider both economic 
and environmental objectives. Independent review of Corps projects and 
an increase in the cost-benefit factor would ensure that only 
beneficial projects are constructed. Effective measures for mitigation 
of environmental and other damage caused by projects would be required 
and monitored. The existing $56 billion project backlog is addressed 
and projects that have been suspended or never started for five years 
would no longer be considered.
  Water projects that provide economic and environmental benefits to 
our state citizens and all federal taxpayers serve the common good and 
reflect our common interest in fiscal responsibility. I urge my 
colleagues to support this legislation.
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