(a) Prohibition.--Except as set forth in subsection (b), no application shall be accepted and no warrant, easement or other office right shall be granted for land, including an island, lying in the bed of a navigable river or stream declared by law to be a public highway.

(b) Exceptions.--Subsection (a) does not apply as follows:

(1) A warrant or other office right may be granted and an appraisal made on land intervening between former islands for which patents have been granted and the former mainland of a navigable river where the intervening lands form an obstruction to navigation and are without the ordinary low water lines of such navigable rivers, as shown by the certificate of the United States Secretary of Defense. A warrant or office right under this paragraph requires written approval of the department, following the submission of formal application and plans showing the manner in which the land within the flood water channel of the navigable river will be occupied and used and the extent to which the flood carrying capacity of the channel will be reduced and modified. Preference in granting a patent shall be given, with the approval of the Governor, to the owner of the land abutting the land intervening between the former island to which a patent has been granted and the former mainland of the navigable rivers. A patent, with the approval of the Governor, may be issued in accordance with any agreement entered into by all abutting landowners providing for an allotment of the land intervening between the former islands.

(2) An easement may be granted for a sewage treatment plant and intercepting sewer system and facility necessary and incidental to the plant under, across and in the bed of a navigable river or stream declared by law to be a public highway for the purpose of diverting sewage and industrial wastes from the river or stream to the sewage treatment plant if construction permits have been issued by the Sanitary Water Board, the department and the United States Secretary of Defense. The department shall, on application by a municipality authority or institution, make a grant to the municipality of the easement in the name of the Commonwealth, upon approval of the Governor and in a form approved by the Attorney General, without the payment of purchase money, interest or fees.

(3) The following apply:

(i) The department is authorized to have a survey and appraisal made under this chapter and issue a patent, upon the approval of the Governor, of so much of the bed of a river or stream below low water mark as is no longer useful for the ordinary purposes of navigation and is abandoned if the Federal Government:

(A) enters an agreement with the owners of land to be taken to promote sanitation, prevent floods or improve navigation or for other purposes; and

(B) authorizes the widening, straightening or improvement of the main channel of a navigable river or stream; and

(C) permits the abandonment and filling up of other parts of the river or stream which are no longer useful for the ordinary purposes of navigation.

(ii) Preference in granting a patent under this paragraph shall be given to an owner of land abutting the portion of the bed of a river or stream which (portion) is subject to patent. A patent, with the approval of the Governor, may issue in accordance with an agreement entered into by all abutting landowners providing for an allotment of the land abandoned and subject to patent.

(iii) Evidence that any part of a river or stream has ceased to be useful for the ordinary purposes of navigation and is the subject of warrant, survey and patent must include all of the following:

(A) A certified copy of any Federal statute in relation to the area.

(B) A copy of any agreement entered into between the United States and the owners of the land, accompanied by proper plans showing the land to be taken; the river or stream as widened, straightened or improved; and the portion of the river or stream which is to be abandoned. The copy of the agreement and plans must be certified under the hand and seal of the United States Secretary of Defense and filed in the office of the secretary.