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SECTION 1. AUTHORIZATION TO CONVEY THE SURFACE ESTATE OF THE SAN 
              JACINTO DISPOSAL AREA IN GALVESTON, TEXAS.

    Section 108 of the Energy and Water Development Appropriations Act, 
1994 (33 U.S.C. 59hh) is amended to read as follows:
    ``Sec. 108. (a) In General.--The Secretary of the Army is 
authorized to convey to the city of Galveston, Texas, the surface 
estate of all or any part of a parcel of land containing approximately 
605 acres known as the San Jacinto Disposal Area located on the east 
end of Galveston Island, Texas, in the W.A.A. Wallace Survey, A-647 and 
A-648, city of Galveston, Galveston County, Texas, being part of the 
old Fort San Jacinto site (in this section referred to as the `Disposal 
Area surface estate'), at the fair market value of the Disposal Area 
surface estate to be determined in accordance with the provisions of 
subsection (d). Such conveyance shall only be made by the Secretary of 
the Army upon the agreement of the Secretary and the city as to all 
compensation due herein.
    ``(b) Compensation for Conveyance.--
            ``(1) In general.--Upon receipt of compensation from the 
        city of Galveston, the Secretary shall convey the Disposal Area 
        surface estate, or any part of the Disposal Area surface 
        estate.
            ``(2) Conveyance of the disposal area surface estate.--If 
        the full Disposal Area surface estate is conveyed, the 
        compensation shall be--
                    ``(A) conveyance to the Department of the Army of 
                the surface estate of a parcel of land containing 
                approximately 564 acres on Pelican Island, Texas, in 
                the Eneas Smith Survey, A-190, Pelican Island, city of 
                Galveston, Galveston County, Texas, adjacent to 
                property currently owned by the United States (in this 
                section referred to as the `Pelican Island surface 
                estate'), with the fair market value of the Pelican 
                Island surface estate being determined in accordance 
                with subsection (d); and
                    ``(B) payment to the United States of an amount 
                equal to the difference between the fair market value 
                of the Disposal Area surface estate and the fair market 
                value of the Pelican Island surface estate.
            ``(3) Conveyance of part of the disposal area surface 
        estate.--If the conveyance is 125 acres or less, compensation 
        shall be an amount equal to the fair market value of the part 
        of the Disposal Area surface estate to be conveyed, with the 
        fair market value of the part of the Disposal Area surface 
        estate to be conveyed being determined in accordance with 
        subsection (d).
    ``(c) Disposition of Spoil.--Costs of maintaining the Galveston 
Harbor and Channel will continue to be governed by the Local 
Cooperation Agreement (LCA) between the United States of America and 
the city of Galveston dated October 18, 1973, as amended. Upon 
conveyance of the Disposal Area surface estate, or any part of the 
Disposal Area surface estate, the Department of the Army shall be 
compensated directly for the present value of the total costs to the 
Department for disposal of dredge material and site preparation 
pursuant to the LCA, if any, in excess of the present value of the 
total costs that would have been incurred if this conveyance had not 
been made.
    ``(d) Determination of Fair Market Value.--The fair market value of 
the Disposal Area surface estate or the part of the Disposal Area 
surface estate to be conveyed and the Pelican Island surface estate 
shall be determined by independent appraisers using the market value 
method.
    ``(e) Navigational Servitude.--
            ``(1) Declaration of nonnavigability; public interest.--
        Unless the Secretary finds, after consultation with local and 
        regional public officials (including local and regional public 
        planning organizations), that the proposed projects to be 
        undertaken within the Disposal Area surface estate are not in 
        the public interest then, subject to paragraphs (2) and (3), 
        the Disposal Area surface estate is declared to be nonnavigable 
        waters of the United States.
            ``(2) Limits on applicability; regulatory requirements.--
        The declaration under paragraph (1) shall apply only to those 
        parts of the Disposal Area surface estate which are or will be 
        bulkheaded and filled or otherwise occupied by permanent 
        structures, including marina facilities. All such work is 
        subject to all applicable Federal statutes and regulations 
        including, but not limited to, sections 9 and 10 of the Act of 
        March 3, 1899 (30 Stat. 1151; 33 U.S.C. 401 and 403), commonly 
        known as the Rivers and Harbors Appropriations Act of 1899, 
        section 404 of the Federal Water Pollution Control Act (33 
        U.S.C. 1344), and the National Environmental Policy Act of 1969 
        (42 U.S.C. 4321 et seq.).
            ``(3) Expiration date.--If, on October 28, 2013, any area 
        or part of the Disposal Area surface estate is not bulkheaded 
        or filled or occupied by permanent structures, including marina 
        facilities, in accordance with the requirements set out in 
        paragraph (2), or if work in connection with any activity 
        permitted in paragraph (2) is not commenced within 5 years 
        after issuance of such permits, then the declaration of 
        nonnavigability for such area or part thereof shall expire.
    ``(f) Survey and Study.--The Disposal Area surface estate and the 
Pelican Island surface estate shall be surveyed and further legally 
described prior to conveyance.''.
Amends the Energy and Water Development Appropriations Act, 1994 to authorize the conveyance of the surface estate of all or any part of the parcel of land containing the San Jacinto Disposal Area to the city of Galveston, Texas. Extends the date of expiration for a declaration of nonnavigability for any area or part of the Disposal Area surface estate that is not bulkheaded or filled or occupied by permanent structures, including marina facilities, in accordance with the regulatory requirements pertaining to such a declaration, as amended by this Act.