Prohibits specified Federal water pollution or drinking water capitalization grants for a State that has not required each of its county and municipal governments in the United States-Mexico border to enforce rules that prohibit development or construction of any new colonia that lacks water, wastewater, or other necessary infrastructure.Defines "colonia"as an identifiable community: (1) located in the United States-Mexico border region (excluding certain metropolitan statistical areas) in Arizona, California, New Mexico, or Texas; (2) recognized as such prior to enactment of this Act; and (3) lacking water, sewage, and housing infrastructure.