# § 8463. Pay-for-performance projects
**(a)** **Definitions** In this section:
**(1)** **Independent evaluator** The term “independent evaluator” means an individual or entity, including an institution of higher education, that is selected by the pay-for-performance beneficiary and pay-for-performance investor, as applicable, or by the pay-for-performance project developer, in consultation with the Secretary of Agriculture, to make the determinations and prepare the reports required under subsection (e).
**(2)** **National Forest System land** section 1609(a) of this title
The term “National Forest System land” means land in the National Forest System (as defined in ).
**(3)** **Pay-for-performance agreement** The term “pay-for-performance agreement” means a mutual benefit agreement (excluding a procurement contract, grant agreement, or cooperative agreement described in chapter 63 of title 31) for a pay-for-performance project—
**(A)** with a term of—
**(i)** not less than 1 year; and
**(ii)** not more than 20 years; and
**(B)** that is executed, in accordance with applicable law, by—
**(i)** the Secretary of Agriculture; and
**(ii)** a pay-for-performance beneficiary or pay-for-performance project developer.
**(4)** **Pay-for-performance beneficiary** The term “pay-for-performance beneficiary” means a State or local government, an Indian Tribe, or a nonprofit or for-profit organization that—
**(A)** repays capital loaned upfront by a pay-for-performance investor, based on a project outcome specified in a pay-for-performance agreement; or
**(B)** provides capital directly for costs associated with a pay-for-performance project.
**(5)** **Pay-for-performance investor** The term “pay-for-performance investor” means a State or local government, an Indian Tribe, or a nonprofit or for-profit organization that provides upfront loaned capital for a pay-for-performance project with the expectation of a financial return dependent on a project outcome.
**(6)** **Pay-for-performance project** The term “pay-for-performance project” means a project that—
**(A)** would provide or enhance a recreational opportunity;
**(B)** is conducted on—
**(i)** National Forest System land; or
**(ii)** other land, if the activities would benefit National Forest System land (including a recreational use of National Forest System land); and
**(C)** would use an innovative funding or financing model that leverages—
**(i)** loaned capital from a pay-for-performance investor to cover upfront costs associated with a pay-for-performance project, with the loaned capital repaid by a pay-for-performance beneficiary at a rate of return dependent on a project outcome, as measured by an independent evaluator; or
**(ii)** capital directly from a pay-for-performance beneficiary to support costs associated with a pay-for-performance project in an amount based on an anticipated project outcome.
**(7)** **Pay-for-performance project developer** The term “pay-for-performance project developer” means a nonprofit or for-profit organization that serves as an intermediary to assist in developing or implementing a pay-for-performance agreement or a pay-for-performance project.
**(8)** **Project outcome** The term “project outcome” means a measurable, beneficial result (whether economic, environmental, or social) that is attributable to a pay-for-performance project and described in a pay-for-performance agreement.
**(b)** **Establishment of pilot program** The Secretary of Agriculture shall establish a pilot program in accordance with this section to carry out 1 or more pay-for-performance projects.
**(c)** **Pay-for-performance projects**
**(1)** **In general** Using funds made available through a pay-for-performance agreement or appropriations, all or any portion of a pay-for-performance project may be implemented by—
**(A)** the Secretary of Agriculture; or
**(B)** a pay-for-performance project developer or a third party, subject to the conditions that—
**(i)** the Secretary of Agriculture shall approve the implementation by the pay-for-performance project developer or third party; and
**(ii)** the implementation is in accordance with applicable law.
**(2)** **Relation to land management plans** section 1604 of this title
A pay-for-performance project carried out under this section shall be consistent with any applicable land management plan developed under .
**(3)** **Ownership**
**(A)** **New improvements** The United States shall have title to any improvements installed on National Forest System land as part of a pay-for-performance project.
**(B)** **Existing improvements** Investing in, conducting, or completing a pay-for-performance project on National Forest System land shall not affect the title of the United States to—
**(i)** any federally owned improvements involved in the pay-for-performance project; or
**(ii)** the underlying land.
**(4)** **Savings clause** The carrying out of any action for a pay-for-performance project does not provide any right to any party to a pay-for-performance agreement.
**(5)** **Potential conflicts** Before approving a pay-for-performance project under this section, the Secretary of Agriculture shall consider and seek to avoid potential conflicts (including economic competition) with any existing written authorized use.
**(d)** **Project agreements**
**(1)** **In general** June 30, 191438 Stat. 43016 U.S.C. 49842 U.S.C. 1397n
Notwithstanding the Act of (, chapter 131; ), or subtitle C of title XX of the Social Security Act ( et seq.), in carrying out the pilot program under this section, the Secretary of Agriculture may enter into a pay-for-performance agreement under which a pay-for-performance beneficiary, pay-for-performance investor, or pay-for-performance project developer agrees to pay for or finance all or part of a pay-for-performance project.
**(2)** **Size limitation** The Secretary of Agriculture may not enter into a pay-for-performance agreement under the pilot program under this section for a pay-for-performance project valued at more than $15,000,000.
**(3)** **Financing**
**(A)** **In general** A pay-for-performance agreement shall specify the amounts that a pay-for-performance beneficiary or a pay-for-performance project developer agrees to pay to a pay-for-performance investor or a pay-for-performance project developer, as appropriate, in the event of an independent evaluator determining pursuant to subsection (e) the degree to which a project outcome has been achieved.
**(B)** **Eligible payments** An amount described in subparagraph (A) shall be—
**(i)** based on—
**(I)** the respective contributions of the parties under the pay-for-performance agreement; and
**(II)** the economic, environmental, or social benefits derived from the project outcomes; and
**(ii)**
**(I)** a percentage of the estimated value of a project outcome;
**(II)** a percentage of the estimated cost savings to the pay-for-performance beneficiary or the Secretary of Agriculture derived from a project outcome;
**(III)** a percentage of the enhanced revenue to the pay-for-performance beneficiary or the Secretary of Agriculture derived from a project outcome; or
**(IV)** a percentage of the cost of the pay-for-performance project.
**(C)** **Forest service financial assistance** Subject to the availability of appropriations, the Secretary of Agriculture may contribute funding for a pay-for-performance project only if—
**(i)** the Secretary of Agriculture demonstrates that—
**(I)** the pay-for-performance project would provide a cost savings to the United States;
**(II)** the funding would accelerate the pace of implementation of an activity previously planned to be completed by the Secretary of Agriculture; or
**(III)** the funding would accelerate the scale of implementation of an activity previously planned to be completed by the Secretary of Agriculture; and
**(ii)** the contribution of the Secretary of Agriculture has a value that is not more than 50 percent of the total cost of the pay-for-performance project.
**(D)** **Special account** Any funds received by the Secretary of Agriculture under subsection (c)(1)—
**(i)** shall be retained in a separate fund in the Treasury to be used solely for pay-for-performance projects; and
**(ii)** shall remain available until expended and without further appropriation.
**(4)** **Maintenance and decommissioning of pay-for-performance project improvements** A pay-for-performance agreement shall—
**(A)** include a plan for maintaining any capital improvement constructed as part of a pay-for-performance project after the date on which the pay-for-performance project is completed; and
**(B)** specify the party that will be responsible for decommissioning the improvements associated with the pay-for-performance project—
**(i)** at the end of the useful life of the improvements;
**(ii)** if the improvements no longer serve the purpose for which the improvements were developed; or
**(iii)** if the pay-for-performance project fails.
**(5)** **Termination of pay-for-performance project agreements** The Secretary of Agriculture may unilaterally terminate a pay-for-performance agreement, in whole or in part, for any program year beginning after the program year during which the Secretary of Agriculture provides to each party to the pay-for-performance agreement a notice of the termination.
**(e)** **Independent evaluations**
**(1)** **Progress reports** An independent evaluator shall submit to the Secretary of Agriculture and each party to the applicable pay-for-performance agreement—
**(A)** by not later than 2 years after the date on which the pay-for-performance agreement is executed, and at least once every 2 years thereafter, a written report that summarizes the progress that has been made in achieving each project outcome; and
**(B)** before the first scheduled date for a payment described in subsection (d)(3)(A), and each subsequent date for payment, a written report that—
**(i)** summarizes the results of the evaluation conducted by the independent evaluator to determine whether a payment should be made pursuant to the pay-for-performance agreement; and
**(ii)** analyzes the reasons why a project outcome was achieved or was not achieved.
**(2)** **Final reports** Not later than 180 days after the date on which a pay-for-performance project is completed, the independent evaluator shall submit to the Secretary of Agriculture and each party to the pay-for-performance agreement a written report that includes, with respect to the period covered by the report—
**(A)** an evaluation of the effects of the pay-for-performance project with respect to each project outcome;
**(B)** a determination of whether the pay-for-performance project has met each project outcome; and
**(C)** the amount of the payments made for the pay-for-performance project pursuant to subsection (d)(3)(A).
**(f)** **Additional Forest Service-provided assistance**
**(1)** **Technical assistance** The Secretary of Agriculture may provide technical assistance to facilitate pay-for-performance project development, such as planning, permitting, site preparation, and design work.
**(2)** **Consultants** Subject to the availability of appropriations, the Secretary of Agriculture may hire a contractor—
**(A)** to conduct a feasibility analysis of a proposed pay-for-performance project;
**(B)** to assist in the development, implementation, or evaluation of a proposed pay-for-performance project or a pay-for-performance agreement; or
**(C)** to assist with an environmental analysis of a proposed pay-for-performance project.
**(g)** **Savings clause** The Secretary of Agriculture shall approve a record of decision, decision notice, or decision memo for any activities to be carried out on National Forest System land as part of a pay-for-performance project before the Secretary of Agriculture may enter into a pay-for-performance agreement involving the applicable pay-for-performance project.
**(h)** **Duration of pilot program**
**(1)** **Sunset** January 4, 2025
The authority to enter into a pay-for-performance agreement under this section terminates on the date that is 7 years after .
**(2)** **Savings clause** Nothing in paragraph (1) affects any pay-for-performance project agreement entered into by the Secretary of Agriculture under this section before the date described in that paragraph.
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**Source Credit**: (Pub. L. 118–234, title I, § 155, Jan. 4, 2025, 138 Stat. 2871.)
## Editorial Notes
### References in Text
The Social Security Act, referred to in subsec. (d)(1), is , . Subtitle C of title XX of the Act is classified generally to division C (§ 1397n et seq.) of subchapter XX of chapter 7 of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see and Tables.