S.123 - Federal Government - A bill to authorize the project for hurricane and storm damage reduction, Morganza to the Gulf of Mexico, Louisiana.

Directs the Secretary of the Army to carry out the hurricane and storm damage reduction project, Morganza to the Gulf of Mexico, Louisiana, in accordance with the Chief of Engineer's reports of August 23, 2002, and July 22, 2003, at specified federal and non-federal costs.

Requires the Secretary to credit toward the non-federal share of the cost of the project elements the cost of design and construction work carried out by the non-federal interest before the date of the partnership agreement for the project elements if the work is integral to the project elements.

Makes the operation, maintenance, repair, rehabilitation, and replacement of the Houma Navigation Canal lock complex and the Gulf Intracoastal Waterway floodgate features of the project that provide for inland waterway transportation a federal responsibility.