1. Short title This Act may be cited as the Conservation Reserve Enhancement Program Improvement Act of 2023 . 2. Conservation reserve enhancement program (a) In general Section 1231A of the Food Security Act of 1985 ( 16 U.S.C. 3831a ) is amended— (1) in subsection (a)(4), in the matter preceding subparagraph (A), by inserting (other than an agreement described in subsection (e)) after this subchapter ; (2) in subsection (b)(2)(A)(vi), by inserting or other appropriate practices, such as dryland agricultural uses and grazing, after conservation practices ; (3) in subsection (c), by adding at the end the following: (5) Variable allocation An owner or operator may elect to determine the amounts of annual payments under this section allocated to each year of the agreement under subsection (b)(1). (6) Drought and water conservation agreements (A) Retirement of water rights In the case of an agreement described in subsection (e) that includes a permanent retirement of water rights, the payment rates for annual payments shall be equal to the irrigated acre payment rates determined by the Secretary. (B) Dryland agricultural uses (i) In general In the case of an agreement described in subsection (e) that permits dryland agricultural uses pursuant to paragraph (2) of that subsection, the payment rates for annual payments shall be equal to the difference between— (I) the irrigated acre payment rates determined by the Secretary; and (II) the dryland acre payment rates determined by the Secretary. (ii) Retroactive application In the case of an agreement covered by clause (i) entered into before the date of enactment of this paragraph under which the payment rate is lower than the payment rate that would be calculated for the agreement under that clause, the Secretary shall modify the agreement by calculating the payment rate in accordance with that clause. ; and (4) in subsection (e)— (A) in the matter preceding paragraph (1), by striking may— and inserting shall—