(a) Establishment
Not later than 180 days after March 30, 2009, the Secretary shall establish a program, to be known as the "Cooperative Watershed Management Program", under which the Secretary shall provide grants—

(1)

(A) to form a watershed group; or

(B) to enlarge a watershed group; and

(2) to conduct 1 or more projects in accordance with the goals of a watershed group.

(b) Application

(1) Establishment of application process; criteria
Not later than 1 year after March 30, 2009, the Secretary shall establish—

(A) an application process for the program; and

(B) in consultation with the States, prioritization and eligibility criteria for considering applications submitted in accordance with the application process.

(c) Distribution of grant funds

(1) In general
In distributing grant funds under this section, the Secretary—

(A) shall comply with paragraph (2); and

(B) may give priority to watershed groups that—

(i) represent maximum diversity of interests; or

(ii) serve subbasin-sized watersheds with an 8-digit hydrologic unit code, as defined by the United States Geological Survey.

(2) Funding procedure

(A) First phase

(i) In general
The Secretary may provide to a grant recipient a first-phase grant in an amount not greater than $100,000 each year for a period of not more than 3 years.

(ii) Mandatory use of funds
A grant recipient that receives a first-phase grant shall use the funds—

(I) to establish or enlarge a watershed group;

(II) to develop a mission statement for the watershed group;

(III) to develop project concepts; and

(IV) to develop a restoration plan.

(iii) Annual determination of eligibility

(I) Determination

For each year of a first-phase grant, not later than 270 days after the date on which a grant recipient first receives grant funds for the year, the Secretary shall determine whether the grant recipient has made sufficient progress during the year to justify additional funding.

(II) Effect of determination

If the Secretary determines under subclause (I) that the progress of a grant recipient during the year covered by the determination justifies additional funding, the Secretary shall provide to the grant recipient grant funds for the following year.

(iv) Advancement conditions
A grant recipient shall not be eligible to receive a second-phase grant under subparagraph (B) until the date on which the Secretary determines that the watershed group—

(I) has approved articles of incorporation and bylaws governing the organization; and

(II)

(aa) holds regular meetings;

(bb) has completed a mission statement; and

(cc) has developed a restoration plan and project concepts for the watershed.

(v) Exception
A watershed group that has not applied for or received first-phase grants may apply for and receive second-phase grants under subparagraph (B) if the Secretary determines that the group has satisfied the requirements of first-phase grants.

(B) Second phase

(i) In general
A watershed group may apply for and receive second-phase grants of $1,000,000 each year for a period of not more than 4 years if—

(I) the watershed group has applied for and received watershed grants under subparagraph (A); or

(II) the Secretary determines that the watershed group has satisfied the requirements of first-phase grants.

(ii) Mandatory use of funds
A grant recipient that receives a second-phase grant shall use the funds to plan and carry out watershed management projects.

(iii) Annual determination of eligibility

(I) Determination

For each year of the second-phase grant, not later than 270 days after the date on which a grant recipient first receives grant funds for the year, the Secretary shall determine whether the grant recipient has made sufficient progress during the year to justify additional funding.

(II) Effect of determination

If the Secretary determines under subclause (I) that the progress of a grant recipient during the year justifies additional funding, the Secretary shall provide to the grant recipient grant funds for the following year.

(iv) Advancement condition
A grant recipient shall not be eligible to receive a third-phase grant under subparagraph (C) until the date on which the Secretary determines that the grant recipient has—

(I) completed each requirement of the second-phase grant; and

(II) demonstrated that 1 or more pilot projects of the grant recipient have resulted in demonstrable improvements, as determined by the Secretary, in the functioning condition of at least 1 river or stream in the watershed.

(C) Third phase

(i) Funding limitation

(I) In general

Except as provided in subclause (II), the Secretary may provide to a grant recipient a third-phase grant in an amount not greater than $5,000,000 for a period of not more than 5 years.

(II) Exception

The Secretary may provide to a grant recipient a third-phase grant in an amount that is greater than the amount described in subclause (I) if the Secretary determines that the grant recipient is capable of using the additional amount to further the purposes of the program in a way that could not otherwise be achieved by the grant recipient using the amount described in subclause (I).

(ii) Mandatory use of funds
A grant recipient that receives a third-phase grant shall use the funds to plan and carry out at least 1 watershed management project.

(3) Authorizing use of funds for administrative and other costs
A grant recipient that receives a grant under this section may use the funds—

(A) to pay for—

(i) administrative and coordination costs, if the costs are not greater than the lesser of—

(I) 20 percent of the total amount of the grant; or

(II) $100,000;

(ii) the salary of not more than 1 full-time employee of the watershed group; and

(iii) any legal fees arising from the establishment of the relevant watershed group; and

(B) to fund—

(i) water quality and quantity studies of the relevant watershed; and

(ii) the planning, design, and implementation of any projects relating to water quality or quantity.

(d) Cost share

(1) Planning
The Federal share of the cost of an activity provided assistance through a first-phase grant shall be 100 percent.

(2) Projects carried out under second phase

(A) In general
The Federal share of the cost of any activity of a watershed management project provided assistance through a second-phase grant shall not exceed 50 percent of the total cost of the activity.

(B) Form of non-Federal share
The non-Federal share under subparagraph (A) may be in the form of in-kind contributions.

(3) Projects carried out under third phase

(A) In general
The Federal share of the costs of any activity of a watershed group of a grant recipient relating to a watershed management project provided assistance through a third-phase grant shall not exceed 50 percent of the total costs of the watershed management project.

(B) Form of non-Federal share
The non-Federal share under subparagraph (A) may be in the form of in-kind contributions.

(e) Annual reports

(1) In general
Not later than 1 year after the date on which a grant recipient first receives funds under this section, and annually thereafter, in accordance with paragraph (2), the watershed group shall submit to the Secretary a report that describes the progress of the watershed group.

(2) Required degree of detail
The contents of an annual report required under paragraph (1) shall contain sufficient information to enable the Secretary to complete each report required under subsection (f), as determined by the Secretary.

(f) Report
Not later than 5 years after March 30, 2009, and every 5 years thereafter, the Secretary shall submit to the Committee on Energy and Natural Resources of the Senate and the Committee on Natural Resources of the House of Representatives a report that describes—

(1) the ways in which the program assists the Secretary—

(A) in addressing water conflicts;

(B) in conserving water;

(C) in improving water quality; and

(D) in improving the ecological resiliency of a river or stream; and

(2) benefits that the program provides, including, to the maximum extent practicable, a quantitative analysis of economic, social, and environmental benefits.

(g) Authorization of appropriations
There are authorized to be appropriated to carry out this section—

(1) $2,000,000 for each of fiscal years 2008 and 2009;

(2) $5,000,000 for fiscal year 2010;

(3) $10,000,000 for fiscal year 2011; and

(4) $20,000,000 for each of fiscal years 2012 through 2020.