Except as provided in paragraph (2) of this subsection, a leaseholder may cultivate or remove shellfish planted on the leaseholder’s aquaculture or submerged land lease area in any manner the leaseholder considers proper. A person may not use a hydraulic escalator dredge to harvest shellfish in the Atlantic Coastal Bays. Each leaseholder shall keep accurate records concerning the seeding and planting of cultch and shellfish on and the harvesting and selling of shellfish from the leaseholder’s aquaculture, submerged land, or demonstration lease area. Each leaseholder shall report this information to the Department electronically or on forms specified by the Department. On or before January 31 of each year, a leaseholder shall provide to the Department a report documenting the use of the lease during the prior year. A leaseholder shall provide to the Department any other report that the Department may require. Failure to file a report may result in termination of the lease. Failure to actively use a lease may result in termination of the lease.