US HB1261

Expands the Land and Water Conservation Fund (LWCF) to allow the Secretary of the Interior to provide financial assistance to states for water quality improvement projects, in addition to existing outdoor recreation purposes

Requires comprehensive statewide outdoor recreation plans to identify impaired water bodies listed under Section 303(d) of the Federal Water Pollution Control Act and any proposed water quality projects for those bodies

Limits eligible water quality projects to those improving natural hydrological systems such as wetlands, marshes, living shorelines, near-shore estuarine waters, and other features that reduce nutrient loads

Allows states to credit funds they allocate for water quality projects toward the required non-federal cost share

Prohibits funds from being used to reimburse already completed or fully funded projects, and explicitly states the bill does not expand federal authority over nonnavigable waters