N.J. Stat. Ann. § 58:5-19

If the commission decides to construct any reservoir which may intercept or interfere with the flow of waters that may be part of the feeder of any canal or which may be claimed by any canal corporation, the commission may acquire from the canal corporation the necessary water rights for the reservoir by agreement with the canal corporation; and if it shall prove impossible to make such agreement, the commission may acquire by condemnation the necessary water flowage or other rights from the canal corporation.