The proposed bill establishes a pilot water conservation program in Wyoming, aimed at reducing water consumption within the state's portion of the Colorado River basin and fulfilling interstate compact obligations. It outlines a detailed application and approval process for conservation projects, which must be voluntary and approved by the state engineer. The bill includes provisions for public notice, comment periods, and an appeal process for those affected by the decisions made regarding conservation project applications. Additionally, it specifies that no new conservation projects will be authorized after July 1, 2032, and that the state engineer will assess a fee for application reviews.

The bill also authorizes the storage of conserved water in Fontenelle Reservoir and outlines the purposes for which this water can be released, such as beneficial use within Wyoming and mitigating impacts on water right holders. To implement the program, the state engineer is allocated two additional full-time positions and a budget of $510,000 from the general fund. The legislation emphasizes the need for effective water management in light of prolonged drought conditions in the Colorado River basin and mandates the state engineer to report on the program's operation by October 1, 2031.