Salt Cedar and Russian Olive Control Assessment and Demonstration Act - (Sec. 2) Directs the Secretary of of Agriculture, in cooperation with the Secretary of the Interior (the Secretaries) to assess the extent of Salt Cedar and Russian Olive invasion in the western United States (as defined by the 1902 Reclamation Act). Requires such assessment to include: (1) documentation of the quantity of water lost due to the infestation and of the quantity of water saved due to various control methods, including the portion of saved water that returns to surface water or groundwater supplies and at what rates; and (2) determination of the optimum control method for the various land types and land uses, of what conditions indicate the need to remove such growth and the optimal methods for disposal or use of such growth, and of the methods to prevent the regrowth and reintroduction of Salt Cedar and Russian Olive and to reestablish native species.

Directs the Secretaries to prepare and submit to specified congressional committees (the congressional committees) a report containing the results of such assessment and identifying: (1) long-term management and funding strategies that could be implemented by Federal, State, tribal, and private land managers and owners on all land management types to address the invasion of Salt Cedar and Russian Olive; and (2) deficiencies or areas for further study and where actual field demonstrations would be useful in the control effort.

Authorizes the Secretaries to make grants to institutions of higher education or nonprofit organizations (or both) with an established background and expertise in public policy issues associated with the control of Salt Cedar and Russian Olive in order to obtain technical experience, support, and recommendations related to the identification of the long-term management and funding strategies required to be included in such report. Limits each grant awarded to $250,000.

(Sec. 3) Directs the Secretaries, based on the assessment and report, to initiate a program of at least three demonstration projects in the western States designed to address deficiencies and areas for further study to address the invasion of Salt Cedar and Russian Olive, including the testing of additional control methods identified by such report.

Allows the Secretaries to enter into an agreement with a western State to carry out a project and, if the Secretaries select a demonstration project for implementation in national Forest System lands, makes the Secretary of Agriculture responsible for implementation of such project.

Requires projects to be designed with integrated methods and adaptive management strategies and carried out over time frames and spatial scales large enough to accomplish the goals laid out in the report. Provides that, before being carried out, the methods and strategies proposed for each project shall be subject to review by scientific experts, including non-Federal experts, selected by the Secretaries.

Limits the total cost of each project to $7 million, including planning, design, implementation, revegetation, maintenance, and monitoring costs. Allows the Secretaries to accept, but not require, in cases of projects conducted on lands under the jurisdiction of either Secretary, funds or in-kind contributions, including State agency provided services. Limits the Federal share of the costs of any activity on private lands funded under a project to 75 percent of the activity's total cost.

Requires projects to include: (1) documentation of the quantity of water saved due to various control methods, including the portion of water saved that returns to surface water or groundwater supplies and at what rates; and (2) optimal revegetative states to prevent regrowth and reintroduction of Salt Cedar and Russian Olive and to reestablish native species.

Requires the Secretaries to submit to the congressional committees annual reports on such projects.

(Sec. 4) Declares that nothing in this Act shall be construed to affect, or otherwise bias, use by the Secretaries of other statutory or administrative authorities to plan or conduct Salt Cedar or Russian Olive control and eradication.

(Sec. 5) Authorizes appropriations to the Secretaries to: (1) conduct the assessment; (2) award the grants specified above; and (3) carry out the program of demonstration projects specified above.
Output: To provide for an assessment of the extent of the invasion of Salt Cedar and Russian Olive on lands in the Western United States and efforts to date to control such invasion on public and private lands, including tribal lands, to establish a demonstration program to address the invasion of Salt Cedar and Russian Olive, and for other purposes.