Authorizes the department of ecology to provide compensation for the management of forests to create favorable or enhanced water flows if it is determined by the department that forest management for stream flow outcomes is not financially compatible with the department's trust obligations.

Prohibits the department of ecology from establishing minimum water flows or levels after the effective date of this act for rivers located in a watershed encompassing forest lands managed by the department of natural resources unless that forest land is managed specifically to create favorable or enhanced water flows or water supply through the application of precommercial or commercial thinning designed to achieve optimal stem spacing for each age class of a forest parcel.