SECTION 1. SHORT TITLE.

    This Act may be cited as the ``EQIP Improvement Act of 2018''.

SEC. 2. ENVIRONMENTAL QUALITY INCENTIVES PROGRAM REFORMS.

    (a) In General.--Section 1240B of the Food Security Act of 1985 (16 
U.S.C. 3839aa-2) is amended--
            (1) in subsection (d), by striking paragraph (2) and 
        inserting the following:
            ``(2) Limitation on payments.--A payment to a producer for 
        performing a practice may not exceed, as determined by the 
        Secretary--
                    ``(A) except as provided in subparagraphs (B) 
                through (D), 75 percent of the costs associated with 
                planning, design, materials, equipment, installation, 
                labor, management, maintenance, or training;
                    ``(B) 40 percent of the costs associated with 
                planning, design, materials, equipment, installation, 
                labor, management, maintenance, or training for--
                            ``(i) an access road;
                            ``(ii) an animal mortality facility;
                            ``(iii) an aquaculture pond;
                            ``(iv) clearing and snagging;
                            ``(v) a dam;
                            ``(vi) a dam using a diversion;
                            ``(vii) a dike;
                            ``(viii) a diversion;
                            ``(ix) a fish raceway or tank;
                            ``(x) an irrigation pipeline;
                            ``(xi) an irrigation reservoir;
                            ``(xii) land clearing;
                            ``(xiii) land smoothing;
                            ``(xiv) a livestock pipeline;
                            ``(xv) obstruction removal;
                            ``(xvi) a pond;
                            ``(xvii) a pumping plant;
                            ``(xviii) spoil spreading;
                            ``(xix) a surface drain using a field 
                        ditch;
                            ``(xx) a main or lateral surface drain;
                            ``(xxi) a vertical drain;
                            ``(xxii) a waste facility closure;
                            ``(xxiii) a waste storage facility;
                            ``(xxiv) waste transfer; or
                            ``(xxv) a waste treatment lagoon;
                    ``(C) 100 percent of income foregone by the 
                producer; or
                    ``(D) in the case of a practice that includes one 
                or more elements described in subparagraphs (A) through 
                (C)--
                            ``(i) 75 percent of the costs incurred with 
                        respect to any elements described in 
                        subparagraph (A);
                            ``(ii) 40 percent of the costs incurred 
                        with respect to any elements described in 
                        subparagraph (B); and
                            ``(iii) 100 percent of the income forgone 
                        with respect to any elements described in 
                        subparagraph (C).''; and
            (2) in subsection (f), by striking the subsection 
        designation and heading and all that follows through ``For 
        each'' in paragraph (2) and inserting the following:
    ``(f) Allocation of Funding for Wildlife Habitat.--For each''.
    (b) Limitation on Payments.--Section 1240G of the Food Security Act 
of 1985 (16 U.S.C. 3839aa-7) is amended by striking ``$450,000'' and 
inserting ``$150,000''.
    (c) Program Reforms.--Section 1240F of the Food Security Act of 
1985 (16 U.S.C. 3839aa-6) is amended--
            (1) in the matter preceding paragraph (1), by striking ``To 
        the extent'' and inserting the following:
    ``(a) Producer Assistance.--To the extent''; and
            (2) by adding at the end the following:
    ``(b) Program Reforms.--Not later than 180 days after the date of 
enactment of this subsection, the Secretary shall--
            ``(1) coordinate the program with the conservation effects 
        assessments carried out by the Secretary--
                    ``(A) to ensure that the conservation effects 
                assessments consider the practical limitations and 
                costs and benefits encountered by the Secretary in 
                implementing the program; and
                    ``(B) to use information collected through 
                conservation effects assessments carried out by the 
                Secretary to direct funds of the program to contracts 
                that will optimize environmental benefits; and
            ``(2) revise guidance issued to States with regards to 
        allocation processes of program funds within the States to 
        provide that, in determining the allocation of program funds 
        within a State, the State should use data regarding 
        environmental concerns, if available, as a primary factor to 
        prioritize projects.''.
    (d) High-Priority Practices.--
            (1) Definition of high-priority practice.--Section 1240A of 
        the Food Security Act of 1985 (16 U.S.C. 3839aa-1) is amended--
                    (A) by redesignating paragraphs (2) through (5) as 
                paragraphs (3) through (6), respectively; and
                    (B) by inserting after paragraph (1) the following:
            ``(2) High-priority practice.--
                    ``(A) In general.--The term `high-priority 
                practice' means a land management practice or 
                vegetative practice that, as determined by the 
                Secretary, is a cost-effective means of addressing the 
                most pressing specific impairments that threaten to 
                degrade or impair--
                            ``(i) water quality;
                            ``(ii) water quantity;
                            ``(iii) soil or related natural resources 
                        within a local watershed; or
                            ``(iv) a specific natural resource 
                        boundary.
                    ``(B) Inclusions.--The term `high-priority 
                practice' includes the planning, design, materials, 
                equipment, installation, labor, management, 
                maintenance, or training for--
                            ``(i) conservation cover;
                            ``(ii) conservation crop rotation;
                            ``(iii) cover crops;
                            ``(iv) critical area planting;
                            ``(v) a filter strip;
                            ``(vi) nutrient management;
                            ``(vii) prescribed grazing;
                            ``(viii) residue and tillage management 
                        using no till;
                            ``(ix) a riparian forest buffer;
                            ``(x) a riparian herbaceous cover; and
                            ``(xi) tree and shrub establishment.''.
            (2) Prioritization of applications.--Section 1240C(b) of 
        the Food Security Act of 1985 (16 U.S.C. 3839aa-3(b)) is 
        amended--
                    (A) by redesignating paragraphs (1) through (4) as 
                paragraphs (2) through (5), respectively; and
                    (B) by inserting before paragraph (2) (as 
                redesignated by subparagraph (A)) the following--
            ``(1) that consist only of the performance of one or more 
        high-priority practices;''.
    (e) Report to Congress.--Section 1240B of the Food Security Act of 
1985 (16 U.S.C. 3839aa-2) is amended by adding at the end the 
following:
    ``(j) Annual Report to Congress.--Not less frequently than once 
each year, the Secretary shall submit to Congress a report describing--
            ``(1) the amount obligated under the program with respect 
        to each category of practice, with information categorized by 
        fiscal year and State; and
            ``(2) the amount obligated under the program in each State, 
        with information categorized by fiscal year and the size of the 
        operation of each producer.''.
EQIP Improvement Act of 2018  This bill amends the Food Security Act of 1985 to modify the Department of Agriculture (USDA) Environmental Quality Incentives Program (EQIP). (EQIP provides financial and technical assistance for agricultural producers and land owners to implement certain conservation practices.)  The bill modifies EQIP to:    reduce the maximum federal cost-share from 75% to 40% for specified practices,   repeal the requirement for at least 60% of the funds made available for EQIP payments to be targeted at practices relating to livestock production, and  reduce the five-year EQIP payment cap from $450,000 to $150,000.  The bill also requires USDA to: (1) coordinate the program with the conservation effects assessments carried out by USDA, and (2) revise the guidance issued to states for allocating funds to require data regarding environmental concerns to be used as a primary factor to prioritize projects.  USDA must prioritize EQIP applications that consist only of the performance of certain land management or vegetative practices that are a cost-effective means of addressing the most pressing impairments that threaten to degrade or impair water quality, water quantity, soil or related natural resources within a local watershed, or a specific natural resource boundary. 
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