[Congressional Record (Bound Edition), Volume 150 (2004), Part 4]
[House]
[Pages 5055-5060]
[From the U.S. Government Publishing Office, www.gpo.gov]




  AUTHORITY TO AGREE TO CERTAIN AMENDMENTS TO THE BORDER ENVIRONMENT 
                         COOPERATION AGREEMENT

  Mr. BEREUTER. Mr. Speaker, I move to suspend the rules and concur in 
the Senate amendment to the bill (H.R. 254) to authorize the President 
of the United States to agree to certain amendments to the Agreement 
between the Government of the United States of America and the 
Government of the United Mexican States concerning the establishment of 
a Border Environment Cooperation Commission and a North American 
Development Bank, and for other purposes.
  The Clerk read as follows:

       Senate amendment:
       Strike out all after the enacting clause and insert:

     SECTION. 1. AUTHORITY TO AGREE TO CERTAIN AMENDMENTS TO THE 
                   BORDER ENVIRONMENT COOPERATION AGREEMENT; GRANT 
                   AUTHORITY.

       (a) Amendment Authority.--Part 2 of subtitle D of title V 
     of Public Law 103-182 (22 U.S.C. 290m-290m-3) is amended by 
     adding at the end the following:

     ``SEC. 545. AUTHORITY TO AGREE TO CERTAIN AMENDMENTS TO THE 
                   BORDER ENVIRONMENT COOPERATION AGREEMENT.

       ``The President may agree to amendments to the Cooperation 
     Agreement that--
       ``(1) enable the Bank to make grants and nonmarket rate 
     loans out of its paid-in capital resources with the approval 
     of its Board; and
       ``(2) amend the definition of `border region' to include 
     the area in the United States that is within 100 kilometers 
     of the international boundary between the United States and 
     Mexico, and the area in Mexico that is within 300

[[Page 5056]]

     kilometers of the international boundary between the United 
     States and Mexico.''.
       (b) Grant Authority.--Part 2 of subtitle D of title V of 
     Public Law 103-182 (22 U.S.C. 290m-290m-3), as amended by 
     subsection (a), is amended by adding at the end the 
     following:

     ``SEC. 546. GRANTS OUT OF PAID-IN CAPITAL RESOURCES.

       ``(a) In General.--The President shall instruct the United 
     States Federal Government representatives on the Board of 
     Directors of the North American Development Bank to oppose 
     any proposal where grants out of the Bank's paid-in capital 
     resources, except for grants from paid-in capital authorized 
     for the community adjustment and investment program under the 
     Bank's charter of 1993, would--
       ``(1) be made to a project that is not being financed, in 
     part, by loans; or
       ``(2) account for more than 50 percent of the financing of 
     any individual project.
       ``(b) Exception.--
       ``(1) General Rule.--The requirements of subsection (a) 
     shall not apply in cases where--
       ``(A) the President determines there are exceptional 
     economic circumstances for making the grant and consults with 
     the Committee on Foreign Relations of the Senate and the 
     Committee on Financial Services of the House of 
     Representatives; or
       ``(B)(i) the grant is being made for a project that is so 
     small that obtaining a loan is impractical; and
       ``(ii) the grant does not exceed $250,000.
       ``(2) Limitation.--Not more than an aggregate of $5,000,000 
     in grants may be made under this subsection.''.
       (c) Clerical Amendment.--Section 1(b) of such public law is 
     amended in the table of contents by inserting after the item 
     relating to section 544 the following:

``Sec. 545. Authority to agree to certain amendments to the Border 
              Environment Cooperation Agreement.
``Sec. 546. Grants out of paid-in capital resources.''.

     SEC. 2. ANNUAL REPORT.

       The Secretary of the Treasury shall submit annually to the 
     Committee on Financial Services of the House of 
     Representatives and the Committee on Foreign Relations of the 
     Senate a written report on the North American Development 
     Bank, which addresses the following issues:
       (1) The number and description of the projects that the 
     North American Development Bank has approved. The description 
     shall include the level of market-rate loans, non-market-rate 
     loans, and grants used in an approved project, and a 
     description of whether an approved project is located within 
     100 kilometers of the international boundary between the 
     United States and Mexico or within 300 kilometers of the 
     international boundary between the United States and Mexico.
       (2) The number and description of the approved projects in 
     which money has been dispersed.
       (3) The number and description of the projects which have 
     been certified by the Border Environment Cooperation 
     Commission, but yet not financed by the North American 
     Development Bank, and the reasons that the projects have not 
     yet been financed.
       (4) The total of the paid-in capital, callable capital, and 
     retained earnings of the North American Development Bank, and 
     the uses of such amounts.
       (5) A description of any efforts and discussions between 
     the United States and Mexican governments to expand the type 
     of projects which the North American Development Bank 
     finances beyond environmental projects.
       (6) A description of any efforts and discussions between 
     the United States and Mexican governments to improve the 
     effectiveness of the North American Development Bank.
       (7) The number and description of projects authorized under 
     the Water Conservation Investment Fund of the North American 
     Development Bank.

     SEC. 3. SENSE OF THE CONGRESS RELATING TO UNITED STATES 
                   SUPPORT FOR NADBANK PROJECTS WHICH FINANCE 
                   WATER CONSERVATION FOR TEXAS IRRIGATORS AND 
                   AGRICULTURAL PRODUCERS IN THE LOWER RIO GRANDE 
                   RIVER VALLEY.

       (a) Findings.--The Congress finds that--
       (1) Texas irrigators and agricultural producers are 
     suffering enormous hardships in the lower Rio Grande River 
     valley because of Mexico's failure to abide by the 1944 Water 
     Treaty entered into by the United States and Mexico;
       (2) over the last 10 years, Mexico has accumulated a 
     1,500,000-acre fee water debt to the United States which has 
     resulted in a very minimal and inadequate irrigation water 
     supply in Texas;
       (3) recent studies by Texas A&M University show that water 
     savings of 30 percent or more can be achieved by improvements 
     in irrigation system infrastructure such as canal lining and 
     metering;
       (4) on August 20, 2002, the Board of the North American 
     Development Bank agreed to the creation in the Bank of a 
     Water Conservation Investment Fund, as required by Minute 308 
     to the 1944 Water Treaty, which was an agreement signed by 
     the United States and Mexico on June 28, 2002; and
       (5) the Water Conservation Investment Fund of the North 
     American Development Bank stated that up to $80,000,000 would 
     be available for grant financing of water conservation 
     projects, which grant funds would be divided equally between 
     the United States and Mexico.
       (b) Sense of the Congress.--It is the sense of the Congress 
     that--
       (1) water conservation projects are eligible for funding 
     from the North American Development Bank under the Agreement 
     Between the Government of the United States of America and 
     the Government of the United Mexican States Concerning the 
     Establishment of a Border Environment Cooperation Commission 
     and a North American Development Bank; and
       (2) the Board of the North American Development Bank should 
     support qualified water conservation projects which can 
     assist Texas irrigators and agricultural producers in the 
     lower Rio Grande River Valley.

     SEC. 4. SENSE OF THE CONGRESS RELATING TO UNITED STATES 
                   SUPPORT FOR NADBANK PROJECTS WHICH FINANCE 
                   WATER CONSERVATION IN THE SOUTHERN CALIFORNIA 
                   AREA.

       It is the sense of the Congress that the Board of the North 
     American Development Bank should support--
       (1) the development of qualified water conservation 
     projects in southern California and other eligible areas in 
     the 4 United States border States, including the conjunctive 
     use and storage of surface and ground water, delivery system 
     conservation, the re-regulation of reservoirs, improved 
     irrigation practices, wastewater reclamation, regional water 
     management modeling, operational and optimization studies to 
     improve water conservation, and cross-border water exchanges 
     consistent with treaties; and
       (2) new water supply research and projects along the Mexico 
     border in southern California and other eligible areas in the 
     4 United States border States to desalinate ocean seawater 
     and brackish surface and groundwater, and dispose of or 
     manage the brines resulting from desalination.

     SEC. 5. SENSE OF THE CONGRESS RELATING TO UNITED STATES 
                   SUPPORT FOR NADBANK PROJECTS FOR WHICH FINANCE 
                   WATER CONSERVATION FOR IRRIGATORS AND 
                   AGRICULTURAL PRODUCERS IN THE SOUTHWEST UNITED 
                   STATES.

       (a) Findings.--The Congress finds as follows:
       (1) Irrigators and agricultural producers are suffering 
     enormous hardships in the southwest United States. The border 
     States of California, Arizona, New Mexico, and Texas are 
     suffering from one of the worst droughts in history. In 
     Arizona, this is the second driest period in recorded history 
     and the worst since 1904.
       (2) In spite of decades of water conservation in the 
     southwest United States, irrigated agriculture uses more than 
     60 percent of surface and ground water.
       (3) The most inadequate water supplies in the United States 
     are in the Southwest, including the lower Colorado River 
     basin and the Great Plains River basins south of the Platte 
     River. In these areas, 70 percent of the water taken from the 
     stream is not returned.
       (4) The amount of water being pumped out of groundwater 
     sources in many areas is greater than the amount being 
     replenished, thus depleting the groundwater supply.
       (5) On August 20, 2002, the Board of the North American 
     Development Bank agreed to the creation in the bank of a 
     Water Conservation Investment Fund.
       (6) The Water Conservation Investment Fund of the North 
     American Development Bank stated that up to $80,000,000 would 
     be available for grant financing of water conservation 
     projects, which grant funds would be divided equally between 
     the United States and Mexico.
       (b) Sense of the Congress.--It is the sense of the Congress 
     that--
       (1) water conservation projects are eligible for funding 
     from the North American Development Bank under the Agreement 
     Between the Government of the United States of America and 
     the Government of the United Mexican States Concerning the 
     Establishment of a Border Environment Cooperation Commission 
     and a North American Development Bank;
       (2) the Board of the North American Development Bank should 
     support qualified water conservation projects that can assist 
     irrigators and agricultural producers; and
       (3) the Board of the North American Development Bank should 
     take into consideration the needs of all of the border states 
     before approving funding for water projects, and strive to 
     fund water conservation projects in each of the border 
     states.

     SEC. 6. SENSE OF THE CONGRESS REGARDING FINANCING OF 
                   PROJECTS.

       (a) In General.--It is the sense of the Congress that the 
     Board of the North American Development Bank should support 
     the financing of projects, on both sides of the international 
     boundary between the United States and Mexico, that address 
     coastal issues and the problem of pollution in both countries 
     having an environmental impact along the Pacific Ocean and 
     Gulf of Mexico shores of the United States and Mexico.
       (b) Air Pollution.--It is the sense of the Congress that 
     the Board of the North American Development Bank should 
     support the financing of projects, on both sides of the 
     international boundary between the United States and Mexico, 
     which address air pollution.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Nebraska (Mr. Bereuter) and the gentleman from Texas (Mr. Hinojosa) 
each will control 20 minutes.
  The Chair recognizes the gentleman from Nebraska (Mr. Bereuter).

[[Page 5057]]




                             General Leave

  Mr. BEREUTER. Mr. Speaker, I ask unanimous consent that all Members 
may have 5 legislative days within which to revise and extend their 
remarks on this legislation and include extraneous material thereon.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Nebraska?
  There was no objection.
  Mr. BEREUTER. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, this Member rises today to express his support for H.R. 
254, as amended by the Senate. This bill makes necessary changes to the 
charter agreement of the North American Development Bank, or NADBank. 
This bill, which this Member reintroduced on January 8, 2003, contains 
legislative changes requested by the administration. This legislation 
passed the House on February 26, 2003. Over a year later, the Senate 
did pass H.R. 254, with an amendment, on March 12 of this year.
  First, this Member would like to thank both the distinguished 
gentleman from Ohio (Mr. Oxley), the chairman of the Committee on 
Financial Services, and the distinguished gentleman from Massachusetts 
(Mr. Frank) for their efforts in bringing this measure to the House 
floor.
  I would also like to thank the following four members of the House 
Committee on Financial Services who are original cosponsors of this 
legislation: two distinguished gentlemen from California (Mr. Ose) and 
(Mr. Royce) and two distinguished gentlemen from Texas (Mr. Gonzalez) 
and (Mr. Hinojosa). All four of these Members, who provided valuable 
input into H.R. 254, have a distinct interest in this subject, as they 
come from a State, either California or Texas, where the NADBank is 
commissioned to work along the international U.S.-Mexican boundary.
  In addition to these Members, the following Members are seven 
additional bipartisan cosponsors of H.R. 254: the gentleman from 
Massachusetts (Mr. Frank); the gentleman from Texas (Mr. Bonilla; the 
gentleman from Arizona (Mr. Grijalva); the gentleman from Arizona (Mr. 
Kolbe); the gentleman from Texas (Mr. Ortiz); the gentleman from Texas 
(Mr. Reyes); and the gentleman from Texas (Mr. Rodriguez). All of these 
Members, with the exception of the gentleman from Massachusetts (Mr. 
Frank), represent a portion of the U.S.-Mexican border.
  In this Member's opening statement on H.R. 254, he would like to 
briefly discuss the following three items: the background on the 
NADBank; the contents of H.R. 254; and the description of the Senate 
amendment to H.R. 254.
  First, as to background, during the 1993 debate on the North American 
Free Trade Agreement, or NAFTA, environmental issues emerged. A 
particular concern was that NAFTA could result in the industrialization 
and population growth in the U.S.-Mexico border region, which could 
further exacerbate pollution problems in the area. In addition, during 
the NAFTA debate, some Members of Congress were concerned that the 
perceived lax enforcement of environmental laws by the Republic of 
Mexico would not be sufficient.
  As a result of these factors, which were raised in the NAFTA debate, 
the U.S. and Mexico agreed to create the NADBank which was charged with 
financing environmental infrastructure projects on both sides of the 
U.S.-Mexico international boundary. The NADBank currently assists 
communities within 100 kilometers of the U.S.-Mexico border by 
financing environmental infrastructure projects that address the need 
for waste water treatment, drinking water, and disposal of municipal 
solid waste.
  As the administration has testified, the NADBank's overall 
performance thus far has been inadequate and unsatisfactory. As of 
March 10, for example, of this year, the NADBank had approved only 
approximately $96.4 million in loans to projects and disbursed only 
$20.8 million in loans, despite having $450 million in scheduled paid-
in capital and a total lending capacity of $3 billion.
  In order to address the inadequacies of the NADBank, U.S. President 
Bush and Mexican President Fox came forth with a joint agreement which 
was announced in Monterrey, Mexico, in March of 2002. Two of the 
provisions in this joint agreement require U.S. congressional approval 
as they are amendments to the Border Environment Cooperation Agreement 
which established the NADBank.
  Of the second thing, the legislation before us today includes the 
following changes agreed to by Presidents Bush and Fox. These 
provisions are as follows:
  Number one, NADBank would be able to make grants and nonmarket rate 
loans out of its paid-in capital resources with the approval of the 
board of directors. Currently, NADBank can only finance market rate 
loans.
  Two, the region that the NADBank serves will be expanded on only the 
Mexican side from 100 kilometers of the international boundary to 
within 300 kilometers of that boundary.
  With respect to the first legislative change, the administration 
believes that NADBank's current financial framework is having a limited 
impact in regions with high poverty rates. Communities in the border 
regions in many instances have been unable to afford market rate 
financing for environmental infrastructure projects. An element of the 
financing which involves grants and nonmarket rate loans will make the 
NADBank more affordable for the eligible communities.
  With respect to the second legislative change, the administration 
believes that the geographic expansion on the Mexican side of the 
international boundary will give the NADBank more opportunities to 
address a greater scope of environmental issues that affect communities 
along the U.S. and Mexican border. For example, with this change the 
NADBank will be better able to undertake projects that improve water 
use over a broader geographic area.
  Furthermore, H.R. 254 would also enhance congressional oversight 
through an annual reporting requirement on the subject of the NADBank 
by the Secretary of the Treasury to both the House Committee on 
Financial Services and the Senate Committee on Foreign Relations. 
Currently, there is no such reporting requirement. In addition to this 
report, H.R. 254 also includes four different senses of the Congress 
resolutions which address either water pollution or water conservation.
  Third and finally, the Senate amendment, which was authored by the 
distinguished senior Senator from Texas, would limit the amount of 
grants which can be given for any one project.

                              {time}  1145

  The rationale behind this argument was to help ensure that NADBank 
does not run out of money by using grants exclusively for just a few 
projects.
  Specifically, the Senate amendment requires the U.S. representatives 
to the NADBank to oppose any proposal which would either: (1) Be for a 
project that is not being financed, in part, by loans from any source; 
or (2) for a NADBank grant to account for more than 50 percent of the 
financing for an individual project.
  The Senate amendment also includes an exception to this above rule, 
however. The U.S. representative to the NADBank cannot oppose a 
proposal if the President determines there are exceptional economic 
circumstances for making a NADBank grant, which does not exceed 
$250,000, and the grant is made for a project for which finding a loan 
is impractical. If the President would make this determination, the 
President must consult with the Senate Committee on Foreign Relations 
and the House Committee on Financial Services.
  In conclusion, for the reasons stated and many others, this Member 
urges his colleagues to support H.R. 254, as amended by the Senate. We 
have been told that the President is eager to sign this bill.
  Mr. Speaker, I reserve the balance of my time.
  Mr. HINOJOSA. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise today in strong support of H.R. 254, the North 
American Development Bank Reauthorization bill. I want to thank the 
gentleman from Nebraska (Mr. Bereuter)

[[Page 5058]]

for his hard work in shepherding this bill through the legislative 
process. I also want to thank the gentleman from Ohio (Chairman Oxley) 
and the ranking member, the gentleman from Massachusetts (Mr. Frank), 
for their assistance in again bringing this bill to the floor for 
consideration. Hopefully, this third time will be a charm.
  As the representative from the 15th district of Texas which includes 
the U.S.-Mexico region, my constituents are directly affected by the 
work of the North American Development Bank and are vitally interested 
in reforms that will improve it.
  The NADBank was originally created to gain passage of the North 
American Free Trade Agreement. The NADBank was to be a partner in 
helping border communities deal with water and environmental problems 
that would result from increased trade. For example, adequate waste 
water treatment facilities were supposed to be built on the U.S.-Mexico 
border after passage of NAFTA 10 years ago.
  Unfortunately, despite large amounts of available capital, the 
NADBank has funded only a small number of projects along the border 
because it was only allowed to offer market rate loans. Most 
communities in this impoverished region are unable to repay market rate 
loans. The environmental need for projects along the southwest border 
is too great for the bank to have money sitting idle. Many border 
communities still lack water and waste water infrastructure. Residents 
on both sides of the border remain at risk from the diseases caused by 
untreated water and pollution.
  H.R. 254 fixes the problem by allowing NADBank to offer low-interest 
loans and grants to border communities to fund critical infrastructure 
projects. While I would have preferred that the bank have more 
flexibility in using grant funding, when appropriate, to assist the 
most distressed communities, the compromise which has been reached with 
the Senate will allow the bank to give up to $50 million for grant 
assistance.
  The gentleman from Nebraska (Mr. Bereuter) has given many of the 
details, so I will not repeat them; but that compromise certainly is 
acceptable. The reforms in this bill will finally allow the NADBank to 
live up to its promise and bring real assistance to border residents. I 
urge my colleagues to support H.R. 254.
  Mr. Speaker, I reserve the balance of my time.
  Mr. BEREUTER. Mr. Speaker, I yield such time as he may consume to the 
gentleman from California (Mr. Dreier), the chairman of the Committee 
on Rules.
  Mr. DREIER. Mr. Speaker, I thank the gentleman from Nebraska (Mr. 
Bereuter), the very able subcommittee chairman, for yielding me this 
time; and I congratulate him as well as the gentleman from Texas (Mr. 
Hinojosa) for their work on this very important legislation.
  We know that President Fox and President Bush both talked about the 
importance of pursuing this legislation. This has been a priority. Why? 
Because we have an extremely critical relationship in the area of 
commerce between our two countries.
  It is with great regularity that some of my colleagues will come down 
and talk about the ills of trade between Mexico and the United States, 
and it is very rare that we focus on the important benefits. It would 
come as a shock to many people to realize that we have a quarter of a 
trillion dollars in cross-border trade between the United States and 
Mexico. In fact, Mexico has emerged beyond Japan to become the United 
States of America's number two trading partner. Doing whatever we can 
to facilitate an expansion of that will benefit both sides of the 
border.
  Mr. Speaker, I have long argued that it is absolutely ridiculous for 
the United States to be tolerant of having a poor southern neighbor. 
There is no benefit to the United States of America having a poor 
southern neighbor. As we look at the many problems about which we 
regularly commiserate, whether it is illegal immigration, the problem 
of drug trafficking, which I am happy to say has improved dramatically 
over the past several years; but as we look at these challenges, we 
have to understand that enhancing the economy of Mexico is the best way 
for us to provide a disincentive for people to illegally flee across 
the border into the United States.
  That is why I think this legislation can go a long way in helping us 
expand what is already a very important and very positive trade 
relationship between our two countries.
  I have had the opportunity, as I know most of my colleagues have, to 
visit Mexico and I regularly have people who say please make sure we 
have an opportunity to have access to more U.S. goods and services. 
This legislation will go a long way towards helping that, and I think 
we need to realize we are in this together.
  There are some people who would like to make a change to the fact 
that we share 2,000 miles with Mexico. I know this will sadden some, 
but there is no way we will ever change the fact that we share a 2,000-
mile border with Mexico, and it seems to me that in light of that 
reality, which I happen to personally think is a great one, we should 
do everything that we possibly can to improve it and make lives on both 
sides of the border even better.
  Mr. HINOJOSA. Mr. Speaker, I yield 3 minutes to the gentleman from 
Texas (Mr. Gonzalez), home to the NADBank. The gentleman from Texas 
(Mr. Gonzalez) has served more than three terms on the Committee on 
Financial Services and has spent a lot of time on this legislation and 
is very knowledgeable about the benefits to the communities on the 
U.S.-Mexico border that would benefit by the passage of H.R. 254.
  Mr. GONZALEZ. Mr. Speaker, I thank the gentleman from Texas (Mr. 
Hinojosa) for yielding me this time, and I rise in strong support of 
H.R. 254.
  As previous speakers have already expressed their gratitude, I do not 
want to be remiss. I want to thank the gentleman from Ohio (Chairman 
Oxley); the gentleman from Massachusetts (Mr. Frank), the ranking 
member; the gentleman from New York (Mr. King); and the gentleman from 
Nebraska (Mr. Bereuter), our subcommittee chairman, who has been the 
driving force behind this and has given us an opportunity as Democrats 
to participate in this particular piece of legislation. We do thank the 
gentleman most sincerely, who will be sorely missed upon his 
retirement, although we are still trying to convince the gentleman to 
reconsider his decision.
  The thing I wish to point out is maybe the third time will be a 
charm. We have passed this a couple of times. This is a piece of 
legislation that actually has been endorsed by the Congressional 
Hispanic Caucus. I think it is important to make some distinctions 
because I think it can be misinterpreted, and then we get into 
controversies that are truly not necessary.
  I am gratified by the remarks of the gentleman from California (Mr. 
Dreier), but I want to make sure Members do not misunderstand the 
import of this legislation. So I guess I need to spend a couple of 
seconds on that. This is not a piece of legislation about NAFTA. This 
will not define you as to whether you opposed NAFTA when it was passed, 
you still oppose it, or you favor it. It is not of that dimension. It 
is not about trade dimension programs or immigration. Does it have some 
impact? Yes, it could increase the quality of life for residents on 
both sides of the border, and so that might have some indirect 
consequences on these other problems that we face and we try to grapple 
with in a cooperative fashion with our neighbor Mexico.
  But this is a very simple bill. We know what it is not. But what is 
it? It is a bill that seeks congressional authorization to allow the 
United States and Mexico to finalize their agreement concerning 
improving the functioning of NADBank and the Border Environmental 
Cooperation Commission. That is all it is. It is no more than that.
  In summary, this agreement streamlines the organization of these two 
institutions, expands the low-interest loan capacity of the bank, and 
expands NADBank's grant-making capacity to make it more efficient and 
effective.

[[Page 5059]]

  Mr. Speaker, some of the communities that benefit from NADBank 
financing have average per capita income in the range of $5,000, and 
that is on the United States side of the border. Conventional financing 
alone is simply not an option for communities this economically 
disadvantaged, and I am sure the gentleman from Texas (Mr. Hinojosa) 
can speak to that point.
  NADBank gives border communities the financial tools to modernize 
their water supply and protect their air quality. It is quickly 
becoming a critical link in efforts to protect the public health of the 
United States-Mexican border citizens. I recognize and, in fact, agree 
with some of the concerns raised by others concerning the challenges in 
our relationship with Mexico. Fortunately, the NADBank was created to 
address some of those challenges.
  Regardless of Members' opinions regarding the United States and 
Mexican relations, it is hard to disagree with the mission of NADBank: 
to improve the quality of life of some of the most disadvantaged 
communities in America.
  Mr. BEREUTER. Mr. Speaker, I reserve the balance of my time.
  Mr. HINOJOSA. Mr. Speaker, I yield 3 minutes to the gentleman from 
Texas (Mr. Ortiz), who represents the border between Texas and Mexico 
starting in Brownsville, a gentleman who is very knowledgeable about 
trade and commerce and the importance of this bill.
  Mr. ORTIZ. Mr. Speaker, I rise today in support of H.R. 254, which 
improves elements of the North American Development Bank, the mission 
of which is to leverage Federal funding to borrowing entities to 
improve the infrastructure for water conservation and irrigation.
  Most importantly, this bill says the board of the North American 
Development Bank should support qualified water conservation projects 
in the lower Rio Grande Valley, a show of the importance of the injury 
to south Texas regarding Mexico's noncompliance with the 1944 water 
treaty.
  This bill enables the North American Development Bank to make grants 
and nonmarket rate loans out of its paid-in capital resources with the 
approval of its board of directors for qualified water conservation 
projects.
  I am so grateful to the gentleman from south Texas (Mr. Hinojosa) for 
carrying the water for us on this bill and trying to help educate the 
Members of this House about the travesty that we have lived through in 
south Texas in the Rio Grande Valley as a result of Mexico's 
noncompliance with our international treaty.

                              {time}  1200

  In this bill we formalize the following findings:
  That Texas irrigators and agricultural producers are suffering 
enormous hardships in the lower Rio Grande River Valley because of 
Mexico's failure to abide by the 1944 water treaty entered into by the 
United States and Mexico;
  That over the last 10 years, Mexico has accumulated a 1.5 million 
acre-feet water debt to the United States which has resulted in a very 
minimal and inadequate irrigation water supply in Texas;
  That recent studies by Texas A&M University show that water savings 
of 30 percent or more can be achieved by improvements in irrigation 
system infrastructure such as canal lining and metering;
  That the North American Development Bank's Water Conservation 
Investment Fund offered up to $80 million for grant financing of water 
conservation projects which grant funds, the money divided equally 
between the United States and Mexico.
  While South Texas farmers were disappointed, to say it mildly, that 
farmers in Mexico were granted equal status with Mexico in the division 
of these funds, the money is certainly better than nothing.
  We appreciate the gentleman from Nebraska and the rest of the Members 
who realize that we have a very, very serious business to do in South 
Texas with this bill. I hope that all the Members will support this 
bill.
  Mr. HINOJOSA. Mr. Speaker, I yield myself such time as I may consume.
  I am delighted that the gentleman from Texas (Mr. Ortiz) has given a 
good explanation of the benefits that we will receive along the Texas 
border region where we have had a drought of over 7 years. Senator Kay 
Bailey Hutchison and the Members from the border region who represent 
Texas are delighted that we are going to be able to help so many 
farmers and ranchers in improving the water distribution that is coming 
down the Rio Grande River all the way down from El Paso to Brownsville.
  Mr. Speaker, I yield 3 minutes to the gentleman from Texas (Mr. 
Rodriguez), chairman of the Congressional Hispanic Caucus, who also 
represents some of the Texas border area.
  Mr. RODRIGUEZ. Mr. Speaker, I would also like to thank the gentleman 
from Texas (Mr. Hinojosa) for his leadership on this issue.
  The NADBank was created to improve water and wastewater 
infrastructure in communities along the border, on both sides of the 
border. This legislation will give NADBank the tools to do its job more 
effectively. I want to thank the leadership on both sides for making 
this happen.
  The bill will allow NADBank to provide the low-interest loans and 
grants that are needed and create new ways to assist disadvantaged 
communities in water supply and other environmental infrastructure 
projects.
  Since the NADBank's inception in 1995, it has provided vital 
assistance for infrastructure improvements along the U.S.-Mexico 
border. The NADBank to date has provided some $643 million in loans and 
grants in order to make over $2.1 billion worth of projects possible.
  I would also like to provide one example of how the NADBank has 
worked in local communities in my district. Last year alone, the 
NADBank provided some $5.5 million for colonia water and wastewater 
improvements in the city of Roma. This project will provide first-time 
sewer service for some 3,688 households. Without the NADBank's 
assistance, this poor community would never have had the opportunity to 
make this possible.
  The city of Roma, by the way, is located in Starr County. For those 
of my colleagues that do not know, this has the unfortunate distinction 
of being the poorest county in the entire United States. These are the 
types of communities that the NADBank was created to help. These 
communities are willing to move forward, willing to participate, 
willing to make a difference, but they find themselves without the 
opportunity to be able to obtain the loans.
  The NADBank also should be empowered to help disadvantaged 
communities to the fullest extent possible. They currently have 
projects all along the border from Texas to California, including 
Laredo and Mission, Texas, as well as in the areas all along. These are 
critical issues.
  I wanted to touch quickly on the discussion of the gentleman from 
Texas (Mr. Ortiz) on the water issue. This water issue is not going to 
be going away anytime soon. The bottom line is that the Mexican 
Government owes over 1 million acre-feet of water. It is not just to 
the U.S. side; it is also to the Mexican side. It is almost an upstream 
versus downstream battle with the state of Chihuahua because the state 
of Tamaulipas on the other side would also benefit tremendously. It is 
an issue that is not going to go away because as time gets difficult 
and as people continue to move to the region, the need for water is 
going to be there.
  There is a real need for us to continue to engage in that issue. The 
NADBank has been helping to make sure that we do that. In addition to 
that, we know that water is key for any growth and development. We need 
to continue work on that.
  Mr. OXLEY. Mr. Speaker, I rise today in support of H.R. 254, a bill 
to make certain changes to the agreement between the United States and 
Mexico concerning the North American Development Bank (NAD Bank).
  I would like to express my appreciation to the distinguished 
gentleman from Nebraska (Mr. Bereuter) for his leadership and 
commitment to this important legislation. The legislation is important 
because it requires the U.S. representatives to the NAD Bank to agree 
to changes which will make the institution more

[[Page 5060]]

effective in financing environmental infrastructure projects along the 
U.S./Mexico border. The legislation passed the House once already and 
it is my pleasure to support it again.
  This legislation is needed in order to make two changes to the 
charter agreement before the NAD Bank can commence operations. First, 
the NAD Bank would be able to make grants and non-market rate loans for 
environmental infrastructure projects along the border out of its paid-
in capital resources with the approval of its Board. Currently, the NAD 
Bank can only finance market rate loans.
  Second, the legislation limits the amount of grants that can be 
provided to support any one project. This limitation is important in 
order to ensure that the NAD Bank does not run out of money by using 
exclusively grants for a small number of projects. It is a reasonable 
limitation that should protect the Bank's ability to support a wide 
range of projects through grants as well as concessional and market-
rate lending.
  I am confident that the congressional oversight authority established 
in this legislation will provide Congress with an on-going opportunity 
to review the NAD Bank's work. H.R. 254 includes an annual reporting 
requirement on the subject of the NAD Bank by the Secretary of the 
Treasury to both the House Committee on Financial Services and the 
Senate Committee on Foreign Relations. It also includes different sense 
of the Congress provisions regarding the water conservation needs of 
the U.S. border regions.
  Establishment of the NAD Bank reflects the United States' continued 
commitment to its partner in the first regional free trade agreement of 
the modern era. The economies of Mexico and the United States are 
increasingly integrated. As our two economies grow together, the 
growing number of people living in the border areas between Mexico and 
the United States will increasingly share similar priorities regarding 
development of that border in an environmentally sensitive manner. 
Establishment of the NAD Bank will help ensure that projects consistent 
with the goals will have an opportunity to receive funding, benefiting 
both the United States and Mexico.
  Mr. Speaker, this is straightforward legislation that enjoys broad 
bipartisan support. I urge my colleagues to support this bill.
  Mr. PAUL. Mr. Speaker, H.R. 254 expands the authority of the North 
American Development Bank (NAD), which was created in the allegedly 
free-trade NAFTA agreement, to make below-market loans. H.R. 254 also 
expands the geographic area in which the NAD bank operates. This bill 
is economically unsound and blatantly unconstitutional and I hope my 
colleagues will reject it.
  Supporters of the NAD claim that the bank facilitates economic 
development and thus improves the quality of life for those living in 
regions where NAD finances projects. In fact, the NAD bank hinders 
economic development.
  When Congress funds institutions like NAD, it transfers resources 
from the private sector to the government. When resources are left in 
the private sector, they are put to the use most highly valued by 
individual consumers. In contrast, the use of resources transferred to 
the public sector by agencies like NAD is determined by bureaucrats and 
politically powerful special interests, thus assuring that the 
resources cannot be put to their highest-valued use. Therefore, 
determining the allocation of resources through the political process 
decreases economic efficiency. Thus, NAD will actually cost jobs and 
reduce the standard of living of the very workers NAD's supporters 
claim to benefit!
  I would also like to remind my colleagues that there is no 
constitutional authorization for Congress to fund organizations like 
the NAD. If my colleagues are not convinced by the constitutional 
argument, I would hope they would consider the wisdom of expanding the 
scope of taxpayer support of programs like the NAD at a time when the 
government is facing massive deficits and Congress is scrambling to 
find the money to pay for national priorities.
  In conclusion, Mr. Speaker, I urge my colleagues to stand up for 
sound economics and constitutional principles by rejecting H.R. 254, 
legislation expanding the North American Development Bank.
  Mr. HINOJOSA. Mr. Speaker, I have no further requests for time, and I 
yield back the balance of my time.
  Mr. BEREUTER. Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Fossella). The question is on the motion 
offered by the gentleman from Nebraska (Mr. Bereuter) that the House 
suspend the rules and concur in the Senate amendment to the bill, H.R. 
254.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds of 
those present have voted in the affirmative.
  Mr. BEREUTER. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the 
Chair's prior announcement, further proceedings on this motion will be 
postponed.

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