Requires DEP to designate municipalities with critical headwaters as headwater guardians.

This bill requires New Jersey's Department of Environmental Protection (DEP) to identify and designate municipalities with critical headwaters - those providing drinking water to at least 1 million residents - as "headwater guardians." Within one year, the DEP must develop a process to locate such headwaters, considering factors like watershed health and location in sensitive areas (e.g., Highlands Region), and publish the list of designated municipalities online. Within six months of designation, the DEP must determine if environmental protections (e.g., enhanced stormwater management or vegetated buffers) are needed to safeguard water quality, with all decisions subject to 30-day public comment. The bill also mandates annual reports tracking designations, protections implemented, and outcomes like reduced pollution or flood damage avoided. Municipalities designated as headwater guardians will receive recognition in planning processes and may access DEP grants for watershed stewardship.