3. a. The department shall take actions to assure that State-owned lands identified pursuant to paragraph (6) of subsection b. of section 13 of P.L.1981, c.262 (C. 58:1A-13) shall be maintained in a manner to ensure that their future use for water supply purposes is not materially impaired or increased significantly in cost.

b. Until State-owned lands identified pursuant to paragraph (6) of subsection b. of section 13 of P.L.1981, c.262 (C. 58:1A-13) are used for water supply purposes, these lands shall be dedicated to the protection of natural resources, including grasslands, wetlands, forests and reforestation, ecosystem improvement, natural ground water recharge, and agricultural purposes that are compatible with natural resource protection and water quality protection. The use of these lands shall be subject to the following conditions:

(1) The lands may be used for open space recreational purposes to the extent that these uses do not impair natural or historic resource protection;

(2) Except for the construction of walking paths or bicycle paths, or other structures for passive recreational uses in accordance with the purposes of this act, permanent structures and other impervious cover shall be less than two percent of the total land area. Permanent structures or extensive impervious cover shall not be constructed on those lands that would be used for water supply purposes;

(3) The use of these lands for non-water supply purposes shall not impair the planned water supply use in any material way. Active recreation shall be allowed only outside the perimeter of any proposed water supply facilities, including, but not limited to, reservoirs, pipelines, canals, pumping stations or dams;

(4) Passive recreation may be allowed within the perimeter of any proposed water supply facility; and

(5) Agricultural uses shall be allowed in the most suitable sites based on soils, water quality protection and site configuration and shall be sited in a manner that protects the agricultural uses from significant interference and damage from recreational uses. All agricultural activities shall be conducted in a manner that will protect natural resources and water quality, as determined by the department in conjunction with the Department of Agriculture.

L.2003,c.251,s.3.