(a) The operating authority of any municipally owned waterworks system which maintains adequate controls against pollution shall have the authority to permit recreational activities upon the lands and waters owned by the municipality for waterworks purposes, to construct recreational facilities, to collect fees and rentals for permitting recreational activities, and to prescribe rules and regulations prohibiting, permitting, and governing recreational activities.

(1) The rules and regulations shall have the force and effect of any other laws of this state and shall be effective wherever the lands and waters are located.

(2) A copy of all rules and regulations, or amendments thereto, adopted by the operating authority shall be furnished to the State Board of Health within thirty (30) days after adoption.

(3) If the operating authority elects to permit hunting or fishing upon its premises, the laws of this state and the rules and regulations of the Arkansas State Game and Fish Commission governing hunting and fishing shall remain in full force and effect and may not be abrogated by the rules and regulations of the operating authority.

(b) Regardless of any rule or regulation adopted by the operating authority, it shall be unlawful for any person to wade, bathe, or swim in any lake or reservoir of less than seven hundred (700) acre surface used by a municipality for its water supply, or to wade, bathe, or swim in that part of any nonnavigable stream located upon land belonging to the municipality which lies above the water intake or impounding dam owned by the municipality. However, the prohibition set forth in this subsection shall not apply to reservoirs whose water is diverted into a natural stream and flows by gravity down the stream three (3) or more miles before reaching the water intake of the municipality unless all of the land of the stream belongs to the municipality.

(c) It shall be unlawful for any unauthorized person to camp upon land not owned by him which is located above any impounding dam for the municipal water supply and within the drainage area of the reservoir, lake, or nonnavigable stream from which the water supply is taken. However, where any land adjoining the drainage area, reservoir, lake, or nonnavigable stream from which the water supply is taken is within the confines of any national forest reserve or national park, persons may camp upon the lands enclosed in the national forest reserve or national park upon such terms and conditions which are or may be permitted by the rules and regulations governing the national forest reserves or national parks.