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.

(This measure has not been amended since it was passed by the Senate on March 12, 2004. The summary of that version is repeated here.)

(Sec. 1) Amends the North American Free Trade Agreement Implementation Act to authorize the President to agree to amendments to the Border Environment Cooperation Agreement (the November 1993 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) that: (1) enable the North American Development Bank to make grants and non-market rate loans out of its paid-in capital resources with the approval of its Board of Directors for qualified water conservation projects; and (2) amend the definition of "border region" as it relates to such projects to include specified areas in the United States and Mexico that are within 300 kilometers of the international boundary between the two countries.

(Sec. 2) Directs the Secretary of the Treasury to report annually to certain congressional committees on the North American Development Bank, addressing specified issues.

Directs the President to instruct the U.S. representative on the Board of Directors of the North American Development Bank to oppose, with exceptions, any proposal where grants out of paid-in capital resources 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 any individual project.

(Sec. 3) Expresses the sense of Congress that: (1) water conservation projects are eligible for funding from the Bank under the Cooperation Agreement; and (2) the Board of Directors of the Bank should support qualified water conservation projects which can assist Texas irrigators and agricultural producers in the lower Rio Grande River Valley.

(Sec. 4) Expresses the sense of Congress that the Bank should support: (1) the development of qualified water conservation projects in southern California and other eligible areas in the four U.S. border States (California, Arizona, New Mexico, and Texas), including the conjunctive use and storage of surface water and groundwater, 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 four U.S. border States to desalinate ocean seawater and brackish surface water and groundwater, and dispose of or manage the brines resulting from desalination.

(Sec. 5) Expresses the sense of Congress that the Bank Board should: (1) take into consideration the needs of all of the border states before approving funding for water conservation projects; and (2) strive to fund such projects in each of such states.

(Sec. 6) Expresses the sense of Congress that the Bank Board should support the financing of projects, on both sides of the international boundary between the United States and Mexico, which address: (1) coastal issues and the problem of pollution in both countries having an environmental impact along their Pacific Ocean and Gulf of Mexico shores; and (2) air pollution.