N.Y. Envtl. Conserv. Law § 15-2317
If as a part of any project for the improvement of a district it is necessary to construct a reservoir on any part of the forest preserve, the department must, before making the final order, cause such lands to be accurately surveyed and the boundaries of the lands needed and the high flow line of the reservoir to be accurately fixed and thereafter, after due notice, to hold a public hearing as to whether such lands are required for such public use and, if so required, as to what will be a reasonable return to the state upon the value of the rights and property of the state so used and the services of the state as to such lands if such improvement is made. If it be determined that such lands are so required, such determination must be incorporated in the final order with a statement of the boundaries, the high flow line, the acreage and the amounts to be paid to the state for the lands and services. Such payments to the state and the cost of building such portions of the reservoir as are on state forest preserve lands shall be apportioned like other costs and expenses on the municipalities, other public corporations and properties benefited to the extent of the benefits received. If additional land is required it shall be acquired or taken in the name of the state and the entire reservoir shall be the property of the state, although paid for by the district and dedicated for the purposes for which constructed. Such reservoir shall always be operated by the department or other state authority for the benefit of the district. The reasonable return to the state shall be fixed for terms not exceeding ten years and may be changed at the beginning of any new term. The high flow line of a reservoir as referred to in title 23 of this article is hereby defined as the level of the water in the reservoir when the greatest flood reasonably to be expected is passing over the spillway of the dam with all outlet gates closed. Before any such state lands are flooded, the timber shall be removed therefrom and the construction thereof shall be approved by the Commissioner of Health as not creating or tending to create any unsanitary condition.
N.Y. Envtl. Conserv. Law § 15-2317