1. The commissioner is authorized to provide state assistance to municipalities, not-for-profit corporations and soil and water conservation districts to undertake land acquisition projects for source water protection, in cooperation with willing sellers. Land acquisition projects for source water protection shall support, expand or enhance drinking water quality protection, including but not limited to aquifers, watersheds, reservoirs, lakes, rivers and streams.

2. a. Any buffer encumbered by a conservation easement acquired pursuant to this section that encumbers lands used in agricultural production as defined in section three hundred one of the agriculture and markets law in a county designated state certified agricultural district created under section three hundred three of the agriculture and markets law may allow agricultural activity that qualifies such lands, provided such activity on such lands does not impair drinking water and complies with an agricultural environmental management program plan developed by the state soil and water conservation committee, in partnership with the department.

b. Notwithstanding any limitations provided herein on lands acquired pursuant to this title a license or easement may be granted by the owner of such property to a public utility for a public purpose.

3. In evaluating land acquisition projects for source water protection pursuant to this section, the department shall give priority to projects which protect or recharge drinking water sources and watersheds including riparian buffers and wetlands.

4. a. No state assistance may be provided pursuant to this section to fund any land acquisition project which is undertaken by eminent domain unless such process is undertaken with a willing seller.

b. The department shall not provide funding pursuant to this title for any land acquisition project for source water protection by a not-for-profit corporation, if any town, village or city within which such a project is located, by resolution, within ninety days of notification by such corporation of its interest in acquiring such projects, objects to such acquisition.

5. Consistent with section eleven-b of the soil and water conservation districts law, the soil and water conservation committee in consultation with the commissioner of agriculture and markets is authorized to provide state assistance payments to county soil and water conservation districts, within amounts appropriated, for land acquisition projects for source water protection projects to support, expand or enhance drinking water quality protection, including but not limited to aquifers, watersheds, reservoirs, lakes, rivers and streams. Such committee shall give priority to projects which establish buffers from waters which serves as or are tributaries to drinking water supplies for such projects using state assistance pursuant to this section.

6. Real property acquired, developed, improved, restored or rehabilitated by or through a municipality or not-for-profit corporation with funds made available pursuant to this title shall not be sold, leased, exchanged, donated or otherwise disposed of or used for other than the public purposes of this title without the express authority of an act of the legislature, which shall provide for the substitution of other lands of equal environmental value and fair market value and reasonably equivalent usefulness and location to those to be discontinued, sold or disposed of, and such other requirements as shall be approved by the commissioner.

7. If the state acquires a real property interest in land purchased by a municipality or not-for-profit with funds made available pursuant to this title, the state shall pay the fair market value of such interest less the amount of funding provided by the state pursuant to this section.

8. To the fullest extent practicable, it is the policy of the state to promote an equitable regional distribution of funds, consistent with the purpose of this section.