In carrying out its responsibility for water resources planning, development, and management, the Department shall cooperate with federal, State, and local agencies in any water resources project or program affecting waters of the State. The Department shall administer available financial assistance for these projects or programs. In furtherance of the Department’s responsibility under this section, when local entities agree to pay all other nonfederal costs and operate and maintain structures installed using federal assistance authorized under the Watershed Protection and Flood Prevention Act, the Department shall consider the following:
(1) A contribution by the State of up to 50% of the nonfederal share of approved projects under PL 566;
(2) Using funds in programs or projects for flood control, recreation, fish and wildlife, water supply, and flow augmentation; and
(3) Limiting State participation to land acquisition for dams and impounded areas and construction of dams. Additional land beyond the flood pool level, access roads, and recreational facilities may not be part of the program or project.