Amends 16 U.S.C. 6543 by (1) adding a new paragraph (7) to subsection (a) requiring that management activities and authorizations not result in long-term degradation of watershed health or lower the classification under paragraph (1) of any watershed in a National Forest, and (2) adding a new subsection (d) that authorizes appropriations of $30,000,000 for each of fiscal years 2025–2029 to carry out the section.

Amends section 303 of the Healthy Forests Restoration Act of 2003 (16 U.S.C. 6542) to expand definitions of eligible non-Federal partners/end water users, add a definition of 'adjacent land', add program requirements and selection priorities, set conditions for projects on adjacent land, clarify partnership roles (including reference to good neighbor agreements), require facilitation of non-Federal leadership, revise standards for water source management plans, change cost-share/matching and funding provisions, and add a set-aside for partner technical assistance and capacity-building.