II Calendar No. 587 118th CONGRESS 2d Session S. 2169 IN THE SENATE OF THE UNITED STATES June 22, 2023 Mr. Wyden introduced the following bill; which was read twice and referred to the Committee on Energy and Natural Resources November 21, 2024 Reported by Mr. Manchin , with an amendment and an amendment to the title Strike out all after the enacting clause and insert the part printed in italic 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, 2024, and on each October 1 thereafter through October 1, 2029, 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 2024 through 2029, 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 2024 through 2026.

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— (A) is conducted before providing funding for a watershed outcomes project; (B) identifies and quantifies the outcomes and costs of all potential qualifying activities across the watershed outcomes project; and (C) assesses how different groups of qualifying activities in the watershed outcomes project could efficiently maximize outcomes for the least cost. (2) Appropriate committees of Congress The term appropriate committees of Congress means— (A) the Committee on Energy and Natural Resources of the Senate; and (B) the Committee on Natural Resources of the House of Representatives. (3) Eligible entity The term eligible entity includes— (A) a State, Indian Tribe, Tribal organization, irrigation district, or water district; (B) a State, regional, or local authority, the members of which include 1 or more organizations with water or power delivery authority; (C) any other organization with water or power delivery authority; and (D) any nongovernmental entity. (4) Pay-for-performance contract The term pay-for-performance contract means a contract to purchase verified outcomes produced by implemented qualifying activities in a watershed outcomes project at a negotiated price. (5) Qualifying activity The term qualifying activity means a conservation project carried out in a watershed identified through advance watershed analytics as having a high likelihood of cost-effectively achieving 1 or more outcomes if implement consistent with applicable performance standards made available under section 3(e)(4). (6) 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; (C) the State of Alaska; and (D) the Commonwealth of Puerto Rico. (7) Secretary The term Secretary means the Secretary of the Interior, acting through the Commissioner of Reclamation. (8) Watershed outcomes project The term watershed outcomes project means the overall watershed project managed by the watershed partner. (9) Watershed partner The term watershed partner means an eligible entity selected by the Secretary under section 3(a)(2) to carry out a watershed outcomes project. 3. Watershed outcomes projects (a) Proposals; selection The Secretary shall— (1) not later than 1 year after the date of enactment of this Act, solicit the submission from eligible entities of proposals to develop and implement a strategy that develops and uses advance watershed analytics to cost-effectively carry out watershed outcomes projects to achieve meaningful watershed-scale outcomes in a Reclamation State; and (2) from among the proposals submitted under paragraph (1), select a watershed partner for each watershed to complete advance watershed analytics, carry out watershed outcomes projects in a Reclamation State, manage watershed partnership duties during the term of the partnership agreement, and support pay-for-performance contracts. (b) Guidelines and criteria for proposals The Secretary— (1) shall develop criteria and guidelines for the submission and selection of proposals under subsection (a); and (2) for purposes of developing the criteria and guidelines under paragraph (1), may consider— (A) the scope of the proposed watershed outcomes project, including the selected subregion or basin-level watershed for consideration; (B) the purpose and goals of the proposed watershed outcomes project; (C) any stakeholder outreach conducted with respect to the proposed watershed outcomes project; (D) evidence of widespread support within the local community for, the proposed watershed outcomes project; (E) the capability of the watershed partner to perform the required duties in accordance with subsection (d); (F) how the watershed partner will procure and use advance watershed analytics to identify and quantify the outcomes and costs of all potential qualifying activities for the proposed watershed outcomes project; (G) estimated costs of completing advance watershed analytics and operating the proposed watershed outcomes project; (H) the anticipated qualifying activity types that are relevant for the selected watershed identified under subparagraph (A); and (I) plans for monitoring, evaluating, and reporting on progress made toward achieving the outcomes of the proposed watershed outcomes project. (c) Partnership agreements (1) In general The Secretary may enter into a partnership agreement with a watershed partner selected under subsection (a)(2) to design and implement a watershed outcomes project that uses advance watershed analytics to achieve meaningful watershed-scale outcomes in accordance with this section. (2) Term (A) In general A partnership agreement entered into under paragraph (1) shall be for a term— (i) of not more 5 years; or (ii) if the Secretary determines that a longer term is necessary to meet the objectives of the watershed outcomes project, a longer term established by the Secretary. (B) Renewal A partnership agreement entered into under paragraph (1) may be renewed for a term of not more than 5 years. (C) Extension A partnership agreement entered into under paragraph (1) or renewed under subparagraph (B) may be extended 1 time for a term of not more than 2 years, as determined by the Secretary. (3) Technical and financial assistance Through a partnership agreement entered into under paragraph (1), the Secretary shall provide to a watershed partner— (A) technical or financial assistance to design and implement a watershed outcomes project; and (B) grants, cooperative agreements, or other financial assistance to support— (i) the activities under subparagraph (A); and (ii) performance payments to qualifying activities under subsection (g)(4). (4) Project development costs The Secretary may annually award to a watershed partner an amount equal to not more than 50 percent of estimated costs of the watershed outcomes project to carry out the duties described in subsection (d). (d) Duties of watershed partners Under a partnership agreement entered into under subsection (c)(1), the Secretary shall establish duties to be carried out by the watershed partner, including considering establishing the following duties: (1) Preparing a funding and implementation strategy that uses advance watershed analytics to cost-effectively carry out a watershed outcomes project by selecting a sufficient number of qualifying activities to achieve meaningful watershed-scale outcomes by— (A) completing advance watershed analytics to identify and quantify the outcomes and costs of all potential qualifying activities for the watershed outcomes project; (B) establishing baseline metrics to support the development of setting outcome prices and performance standards for the watershed outcomes project; (C) developing performance standards for the watershed outcomes project; (D) leveraging financial assistance provided by the Secretary to secure additional funds for the watershed outcomes project; (E) designing, recruiting, and verifying qualifying activities for the watershed outcomes project; and (F) providing outcome and financial accounting services relating to qualifying activities carried out to achieve outcomes. (2) Using the strategy prepared under paragraph (1) to prioritize qualifying activity outreach efforts. (3) Working with local stakeholders to recruit and design an implementation-ready queue of priority qualifying activities. (4) Ensuring that any proposed priority qualifying activities have the support of affected local stakeholders. (5) Setting activity outcome prices and developing performance standards for qualifying activities. (6) Developing a plan to carry out qualifying activities having a high likelihood of cost-effectively achieving 1 or more outcomes described in subsection (f) if implemented consistent with the applicable performance standards made available by the Secretary under subsection (e)(4). (7) Selecting, developing pay-for-performance contracts for, funding, and carrying out qualifying activities, in accordance with the plan developed under paragraph (6), to achieve meaningful watershed-scale outcomes. (8) (A) Quantifying the outcomes for qualifying activities. (B) Verifying that qualifying activities have been implemented consistent with applicable performance standards. (C) Providing applicable documentation to the Secretary with respect to the information quantified and verified under subparagraphs (A) and (B). (9) Monitoring qualifying activities at appropriate levels to confirm ongoing performance. (10) Other duties necessary to carry out a watershed outcomes project, as determined to be necessary by the Secretary. (e) Duties of Secretary Under a partnership agreement entered into under subsection (c), the Secretary shall— (1) ensure that there is widespread support within the local community for the watershed outcomes project; (2) verify the advance watershed analytics completed by the watershed partner, to the maximum extent practicable; (3) ensure that there are made available to the public outcome price tables, by qualifying activity type, for use as the basis for negotiating pay-for-performance contracts for the applicable watershed outcomes project; (4) ensure that there are made available to the public qualifying activity and watershed outcomes project performance standards that are to be used as the basis for— (A) identifying, quantifying, and verifying qualifying activity outcomes; and (B) executing pay-for-performance contracts; (5) review outcome quantification and verification documentation provided by the watershed partner under subsection (d)(8)(C); (6) provide to a watershed partner financial assistance to purchase verified outcomes from qualifying activities in a watershed outcomes project, at prices set for the watershed outcomes project in accordance with this section; and (7) coordinate with other Federal agencies, to the maximum extent practicable, to help leverage and concentrate funding into watershed outcomes projects. (f) Required outcomes for qualifying activities To be eligible for a performance payment under subsection (g)(4), a qualified activity shall produce 1 or more measurable, clearly defined outcomes that result in a quantifiable and verifiable— (1) increase in surface water or groundwater; (2) increase in aquatic habitat quality, quantity, connectivity, or access in a watershed; (3) surface water or groundwater quality improvement, including water temperature reductions, or a reduction in salinity or nutrient or sediment runoff associated with irrigated agriculture; or (4) other quantifiable benefits, as determined by the Secretary, likely to improve watershed health in the watershed outcomes project. (g) Financial assistance for qualifying activities in watershed outcomes projects (1) Leveraging Federal funding To achieve meaningful watershed-scale outcomes, amounts made available under section 5 may be used to satisfy any cost-sharing requirement with respect to carrying out a watershed outcomes project. (2) Federal share The Federal share of grants or other financial assistance for a watershed outcomes project under this Act shall be not more than 75 percent of the total cost of the watershed outcomes project. (3) Watershed partner contributions The Secretary may— (A) accept non-Federal contributions for a watershed outcomes project, including funding or financing secured by the watershed partner in accordance with the strategy developed under subsection (d)(1); and (B) use amounts accepted under subparagraph (A) to carry out activities authorized under this Act in the watershed outcomes project. (4) Performance payments Not later than 90 days after the date on which a watershed partner verifies the outcomes generated from qualifying activities and confirms that the qualifying activity has been implemented consistent with the performance standards of the applicable watershed outcomes project, the Secretary shall provide financial assistance to the watershed partner to support performance payments. (h) Maximum number of watershed outcomes projects Not more than a total of 5 watershed outcomes projects may be carried out under this section. (i) Restrictions on use of advance watershed analytics data (1) In general Nothing in this Act affects or modifies existing law with respect to the treatment of personal data in the conduct by an employee of the Federal Government or a designee of an employee of the Federal Government in carrying out official duties of the Federal employee or designee under this Act. (2) Data collection All information or data collected or assembled by a Federal employee or a designee of a Federal employee to complete advance watershed analytics activities, directly or indirectly, under this Act— (A) shall be used for the sole purpose of identifying, prioritizing, and funding qualifying activities in a watershed outcomes project; and (B) shall be considered to be confidential commercial information that is exempt from disclosure under section 552(b)(4) of title 5, United States Code (commonly known as the Freedom of Information Act ). (3) Applicability to watershed partners Any restrictions on a Federal employee under this section shall apply to an employee of a watershed partner. (j) Effect Nothing in this Act creates, impairs, alters, or supersedes a Federal or State water right. 4. Briefing; Reports (a) Annual briefing or report For each fiscal year for which a watershed outcomes project is carried out under section 3, 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 that fiscal year, the Secretary shall provide to the appropriate committees of Congress a briefing or report describing the status of each watershed outcomes project, including progress towards the applicable strategy prepared under section 3(d)(1), including any payments made for outcomes. (b) 5 -year report Not later than October 1 of the fifth fiscal year in which a watershed outcomes project is carried out under section 3, the Secretary shall submit to the appropriate committees of Congress a report that— (1) summarizes— (A) the projected results of the qualifying activities in the watershed outcomes project in meeting the strategy prepared under section 3(d)(1); (B) the projected outcomes of the watershed outcomes project; (C) the total amount of funds secured for the watershed outcomes project; (D) the type of funding expended under the watershed outcomes project; and (E) such other information as the Secretary determines to be appropriate; and (2) includes recommendations for continuing, terminating, or making permanent the authorizations under this Act. 5. Authorization of appropriations There is authorized to be appropriated to the Secretary to carry out this Act $17,000,000 for each of fiscal years 2025 through 2030.

Amend the title so as to read: A bill to authorize the conduct of watershed outcomes projects, and for other purposes. .

November 21, 2024 Reported with an amendment and an amendment to the title