II 117th CONGRESS 2d Session S. 3539 IN THE SENATE OF THE UNITED STATES February 1, 2022 Mr. Wyden introduced the following bill; which was read twice and referred to the Committee on Energy and Natural Resources A BILL To authorize the Secretary of the Interior to carry out watershed pilots, and for other purposes.

1. Short title This Act may be cited as the Watershed Results Act . 2. Definitions In this Act: (1) Advance watershed analytics The term advance watershed analytics means the technical analysis that is— (A) conducted before making funding available for a watershed pilot; and (B) necessary— (i) to identify specific high-impact outcome projects across an entire watershed; (ii) to identify project costs and implementation feasibility constraints; (iii) to identify how different groups of projects impact overall watershed targets; and (iv) to develop scenarios that— (I) maximize outcomes; and (II) are feasible to quickly implement at scale. (2) Federal financial source The term Federal financial source means an award, grant, loan, guarantee, incentive, or credit enhancement funding available to Federal agencies participating in watershed pilots. (3) Fund The term Fund means the Environmental Outcomes Fund established by the Secretary under section 4(c)(1). (4) Management team The term management team means the management team for a watershed pilot designated under section 3(b)(2). (5) Outcome The term outcome means— (A) a quantifiable increase in surface water or groundwater; (B) a measurable increase in aquatic habitat quality or quantity in a watershed affected by the operation of a Bureau of Reclamation project; or (C) any other quantifiable benefit identified by the management team as being desirable in the applicable watershed. (6) Pay-for-performance contract The term pay-for-performance contract means a contract to purchase successfully implemented outcomes at a negotiated per-unit price. (7) Plan The term plan means an actionable implementation and funding plan developed for a watershed pilot under section 3(c)(1). (8) Qualifying project The term qualifying project means a project in a Reclamation State that efficiently achieves 1 or more outcomes in pursuit of a plan, as prioritized through advance watershed analytics. (9) Reclamation State The term Reclamation State means— (A) a State or territory described in the first section of the Act of June 17, 1902 (32 Stat. 388, chapter 1093; 43 U.S.C. 391 ); (B) the State of Hawaii; and (C) the State of Alaska. (10) Secretary The term Secretary means the Secretary of the Interior. (11) Watershed pilot The term watershed pilot means a watershed pilot established under section 3(a). 3. Watershed pilots (a) In general Not later than 180 days after the date of enactment of this Act and subject to subsection (h), the Secretary shall establish a total of not less than 2 and not more than 5 watershed pilots in a Reclamation State. (b) Management of watershed pilots (1) Management by Secretary Management and responsibility for each watershed pilot shall be led by the Secretary. (2) Management team The Secretary shall designate a management team for the watershed pilot, which shall be composed of representatives appointed by the Secretary. (3) Consultation In establishing and carrying out a watershed pilot, the Secretary and the management team shall consult with— (A) State, local, and Tribal representatives; (B) nongovernmental organizations, including water and irrigation districts; (C) private sector representatives; and (D) such other individuals or entities as the Secretary and the management team determine to be appropriate. (c) Plan (1) In general Not later than 1 year after the date on which a watershed pilot is established, the management team for the applicable watershed pilot shall develop and implement a 5-year plan for carrying out the watershed pilot. (2) Requirements A plan shall incorporate— (A) advance watershed analytics to establish milestones, outcome targets, an implementation plan, and a timeline for achieving the milestones, targets, and full implementation; (B) a coordinated cross-agency funding strategy that will— (i) achieve the milestones and outcome targets established under subparagraph (A) in an effective and flexible manner by efficiently and quickly delivering Federal financial sources to qualifying projects; (ii) leverage amounts made available under sections 4(c)(4) and 7 with existing Federal financial sources; (iii) use Federal financial sources and amounts from the Fund to leverage and attract investments from private or philanthropic sources to accelerate greater outcomes-based results; and (iv) concentrate Federal financial source commitments from multiple agencies in a watershed pilot during the period of the watershed pilot; (C) annually updated progress tracking against milestones and targets; and (D) such other information as the Secretary determines to be relevant to achieve outcomes on an accelerated timeline. (3) Review A plan shall be reviewed annually by the management team. (d) Notification On adoption of each plan, the Secretary shall submit to the Committee on Appropriations of the Senate and the Committee on Appropriations of the House of Representatives a notification that the watershed pilot has been established and the plan has been adopted. (e) Disbursement of funds to qualifying projects Not later than 30 days after the date on which the Secretary and the management team for a watershed pilot verify outcomes from the qualifying project, the Secretary and the management team for the watershed pilot shall disburse amounts from Federal financial sources, including amounts made available under sections 4(c)(4) and 7, to a qualifying project, through pay-for-performance contracts, at agreed upon outcome prices. (f) Minimum outcome prices Not later than 1 year after the date on which a watershed pilot is established, the Secretary and the management team for the watershed pilot shall set and publish minimum per-unit outcome prices. (g) Use of advance watershed analytics The Secretary and the management team for each watershed pilot shall use advance watershed analytics throughout the planning, implementation, measuring, and monitoring of outcomes within the watershed pilot. (h) Authority for additional pilots The Secretary, following notification of the Committee on Appropriations of the Senate and the Committee on Appropriations of the House of Representatives, shall approve the establishment of more than 5 watershed pilots under this section. 4. Financing and funding of watershed pilots (a) Use of pay-For-Performance contracts In carrying out a watershed pilot, the Secretary shall enter into a pay-for-performance contract to achieve outcome-based goals described in the plan developed for the watershed pilot. (b) Flexibility under existing programs The Secretary shall modify, expand, or streamline eligibility and verification criteria for existing Federal financial sources to maximize flexibility, speed, and use of Federal funds in the most effective manner to achieve outcomes under the watershed pilot. (c) Environmental outcomes fund (1) In general The Secretary shall establish an Environmental Outcomes Fund. (2) Use of fund Amounts in the Fund shall only be expended on pay-for-performance contracts under a watershed pilot. (3) Criteria Amounts in the Fund shall be expended in accordance with— (A) this Act, including the plan developed for the applicable watershed pilot; and (B) criteria established by the Secretary and the management team for the applicable watershed pilot, which shall include criteria for— (i) eligibility of qualifying projects; (ii) types of qualifying projects; (iii) the timing of the disbursement of funds; and (iv) such other matters as the Secretary and the management team determine to be appropriate. (4) Mandatory funding (A) In general Out of any funds in the Treasury not otherwise appropriated, on October 1, 2022, and on each October 1 thereafter through October 1, 2027, the Secretary of the Treasury shall transfer to the Secretary from the reclamation fund established by the first section of the Act of June 17, 1902 (32 Stat. 388, chapter 1093; 43 U.S.C. 391 ), $15,000,000 to be deposited in the Fund. (B) Receipt and acceptance The Secretary shall be entitled to receive, shall accept, and shall deposit into the Fund for use in accordance with this subsection the funds transferred under subparagraph (A), without further appropriation. (5) Report to congress If a watershed pilot is established as a permanent program, the Secretary may submit to Congress recommendations for modifications to funding levels and a permanent authorization of funding for the permanent program. (d) Cost-Share waiver Any otherwise applicable cost-share requirements for existing Federal financial sources, including under section 212(a)(1) of the Public Lands Corps Act of 1993 ( 16 U.S.C. 1729(a)(1) ), shall be waived for watershed pilots carried out using amounts made available under this Act. 5. Reports (a) Definition of appropriate committees of congress In this section, the term appropriate committees of Congress means— (1) of the Senate— (A) the Committee on Appropriations; and (B) the Committee on Energy and Natural Resources; and (2) of the House of Representatives— (A) the Committee on Appropriations; and (B) the Committee on Natural Resources. (b) Annual reports The Secretary shall, not later than the date on which the budget of the United States Government is submitted by the President under section 1105 of title 31, United States Code, for each fiscal year for which the watershed pilot is being carried out, submit to the appropriate committees of Congress a report describing the status of each watershed pilot, including progress towards the milestones described in section 3(c)(2)(A). (c) 5-Year report Not later than October 1 of the fifth fiscal year in which a watershed pilot is carried out under section 3, the Secretary shall submit to the appropriate committees of Congress a report describing, in accordance with the plan developed for the applicable watershed pilot— (1) a summary of— (A) the projected results of the watershed pilot in meeting the milestones described in section 3(c)(2)(A); (B) the projected outcomes of the watershed pilot described in that section; (C) the total amount of funds made available under the watershed pilot; (D) the type of funding expended under the watershed pilot; and (E) such other information as the Secretary determines to be appropriate; and (2) recommendations for continuing, terminating, or making permanent the watershed pilot. (d) Environmental outcomes funds (1) Secretary The Secretary, not later than the date on which the budget of the United States Government is submitted by the President under section 1105 of title 31, United States Code, for each fiscal year for which the watershed pilot is being carried out, submit to the appropriate committees of Congress a report describing the outcomes achieved using amounts made available from, management of, and expenditures from, the Fund. (2) Inspectors general (A) Audit The Inspector General of the Department of the Interior shall conduct a biannual audit of the management of, and funding (including expenditures) relating to, the Fund for the purpose of ensuring proper and effective use of Federal funding by evaluating the effectiveness of the watershed pilot in achieving the plan developed for the watershed pilot, including an evaluation of the outcomes achieved and the Federal financial sources used to achieve those outcomes. (B) Reports The Inspector General of the Department of the Interior shall, not later than the date on which the budget of the United States Government is submitted by the President under section 1105 of title 31, United States Code, for each fiscal year for which the watershed pilot is being carried out, submit to the appropriate committees of Congress a report describing the 2 audits most recently conducted under subparagraph (A). 6. Duration Each watershed pilot shall terminate on the date that is 5 years after the date on which the notification is submitted under section 3(d) with respect to that watershed pilot. 7. Authorization of appropriations There are authorized to be appropriated— (1) for each watershed pilot, $15,000,000 for each of fiscal years 2022 through 2027, which shall be in addition to the amounts made available under section 4(c)(4); and (2) to carry out advance watershed analytics for each watershed pilot, $2,000,000 for each of fiscal years 2022 through 2024.