To direct the Secretary of the Interior to convey certain parcels of land acquired for the Blunt Reservoir and Pierre Canal features of the Oahe Unit, James Division, South Dakota, to the State of South Dakota for the purpose of mitigating lost wildlife habitat, on the condition that the current preferential leaseholders shall have an option to purchase the parcels, and for other purposes.

Summary: Blunt Reservoir and Pierre Canal Land Conveyance Act of 2002 - Deauthorizes the Blunt Reservoir feature of the Oahe Irrigation Project authorized as part of the Pick-Sloan Missouri River Basin Program.Allows preferential leaseholders (original landowners or descendants, or operators of the land at the time of purchase) of parcels of the Blunt Reservoir and Pierre Canal an option to purchase from the Commission of Schools and Public Lands of South Dakota the land they lease. Sets terms for such purchases. Directs the Secretary of the Interior to convey all preferential lease parcels not purchased by the leaseholder to the South Dakota Department of Game, Fish, and Parks, to be used for mitigating the wildlife habitat that was lost as a result of the development of the Pick-Sloan project.Directs the Secretary to convey to the Department the nonpreferential leased parcels and unleased parcels of the Blunt Reservoir and Pierre Canal, to be used for mitigating the wildlife habitat that was lost as a result of the development of the Pick-Sloan project.Requires the Governor of South Dakota, or a designee of the Governor (the "Governor"), to accept certain conditions of conveyance, including that: (1) the State receives the land conveyed in "as is" condition; (2) the State assumes responsibility for any liabilities accruing after the date of conveyance as a result of ownership, operation or maintenance of such land; (3) the Federal Government retains all oil, gas, and mineral rights; (4) the property shall continue to be used for wildlife conservation; and (5) title shall revert to the United States if the land is needed for national defense purposes.Authorizes the Governor to allow a person to exchange other land in South Dakota for a nonpreferential lease parcel or unleased parcel at Blunt Reservoir or Pierre Canal.Permits the United States a perpetual easement for a water conveyance structure over, under, across, or through the Pierre Canal Feature.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Blunt Reservoir and Pierre Canal 
Land Conveyance Act of 2002''.

SEC. 2. BLUNT RESERVOIR AND PIERRE CANAL.

    (a) Definitions.--In this section:
            (1) Blunt reservoir feature.--The term ``Blunt Reservoir 
        feature'' means the Blunt Reservoir feature of the Oahe Unit, 
        James Division, authorized by the Act of August 3, 1968 (82 
        Stat. 624), as part of the Pick-Sloan Missouri River Basin 
        Program.
            (2) Governor.--The term ``Governor'' means the Governor of 
        the State, or a designee of such Governor.
            (3) Nonpreferential lease parcel.--The term 
        ``nonpreferential lease parcel'' means a parcel of land that--
                    (A) was purchased by the Secretary for use in 
                connection with the Blunt Reservoir feature or the 
                Pierre Canal feature; and
                    (B) was considered to be a nonpreferential lease 
                parcel by the Secretary as of January 1, 2001, and is 
                reflected as such on the roster of leases of the Bureau 
                of Reclamation for 2001.
            (4) Pierre canal feature.--The term ``Pierre Canal 
        feature'' means the Pierre Canal feature of the Oahe Unit, 
        James Division, authorized by the Act of August 3, 1968 (82 
        Stat. 624), as part of the Pick-Sloan Missouri River Basin 
        Program.
            (5) Preferential leaseholder.--The term ``preferential 
        leaseholder'' means a person or descendant of a person that 
        held a lease on a preferential lease parcel as of January 1, 
        2001, and is reflected as such on the roster of leases of the 
        Bureau of Reclamation for 2001.
            (6) Preferential lease parcel.--The term ``preferential 
        lease parcel'' means a parcel of land that--
                    (A) was purchased by the Secretary for use in 
                connection with the Blunt Reservoir feature or the 
                Pierre Canal feature; and
                    (B) was considered to be a preferential lease 
                parcel by the Secretary as of January 1, 2001, and is 
                reflected as such on the roster of leases of the Bureau 
                of Reclamation for 2001.
            (7) Secretary.--The term ``Secretary'' means the Secretary 
        of the Interior, acting through the Commissioner of 
        Reclamation.
            (8) State.--The term ``State'' means the State of South 
        Dakota, including a successor in interest of the State.
            (9) Unleased parcel.--The term ``unleased parcel'' means a 
        parcel of land that--
                    (A) was purchased by the Secretary for use in 
                connection with the Blunt Reservoir feature or the 
                Pierre Canal feature; and
                    (B) is not under lease as of the date of enactment 
                of this Act.
    (b) Deauthorization.--The Blunt Reservoir feature is deauthorized.
    (c) Acceptance of Land and Obligations.--
            (1) In general.--As a condition of each conveyance under 
        subsections (d)(5) and (e), respectively, the Governor shall 
        agree--
                    (A) that the State shall accept in ``as is'' 
                condition, the portions of the Blunt Reservoir feature 
                and the Pierre Canal feature that pass into State 
                ownership;
                    (B) that the State shall assume any liability 
                accruing after the date of conveyance as a result of 
                the ownership, operation, or maintenance of the 
                features referred to in subparagraph (A), including 
                liability associated with certain outstanding 
                obligations associated with expired easements, or any 
                other right granted in, on, over, or across either 
                feature; and
                    (C) to act as the agent for the Secretary in 
                administering the purchase option extended to 
                preferential leaseholders under subsection (d).
            (2) Responsibilities of the state.--An outstanding 
        obligation described in paragraph (1)(B) shall inure to the 
        benefit of, and be binding upon, the State.
            (3) Oil, gas, mineral and other outstanding rights.--A 
        conveyance to the State under subsection (d)(5) or (e) or a 
        sale to a preferential leaseholder under subsection (d) shall 
        be made subject to--
                    (A) oil, gas, and other mineral rights reserved of 
                record, as of the date of enactment of this Act, by or 
                in favor of a third party; and
                    (B) any permit, license, lease, right-of-use, or 
                right-of-way of record in, on, over, or across a 
                feature referred to in paragraph (1)(A) that is 
                outstanding as to a third party as of the date of 
                enactment of this Act.
            (4) Additional conditions of conveyance to state.--A 
        conveyance to the State under subsection (d)(5) or (e) shall be 
        subject to the reservations by the United States and the 
        conditions specified in section 1 of the Act of May 19, 1948 
        (chapter 310; 62 Stat. 240; 16 U.S.C. 667b), for the transfer 
        of property to State agencies for wildlife conservation 
        purposes.
    (d) Purchase Option.--
            (1) In general.--A preferential leaseholder shall have an 
        option to purchase from the Governor, acting as an agent for 
        the Secretary, the preferential lease parcel that is the 
        subject of the lease.
            (2) Terms.--
                    (A) In general.--Except as provided in subparagraph 
                (B), a preferential leaseholder may elect to purchase a 
                parcel on 1 of the following terms:
                            (i) Cash purchase for the amount that is 
                        equal to--
                                    (I) the value of the parcel 
                                determined under paragraph (4); minus
                                    (II) 10 percent of that value.
                            (ii) Installment purchase, with 10 percent 
                        of the value of the parcel determined under 
                        paragraph (4) to be paid on the date of 
                        purchase and the remainder to be paid over not 
                        more than 30 years at 3 percent annual 
                        interest.
                    (B) Value under $10,000.--If the value of the 
                parcel is under $10,000, the purchase shall be made on 
                a cash basis in accordance with subparagraph (A)(i).
            (3) Option exercise period.--
                    (A) In general.--A preferential leaseholder shall 
                have until the date that is 5 years after enactment of 
                this Act to exercise the option under paragraph (1).
                    (B) Continuation of leases.--Until the date 
                specified in subparagraph (A), a preferential 
                leaseholder shall be entitled to continue to lease from 
                the Secretary the parcel leased by the preferential 
                leaseholder under the same terms and conditions as 
                under the lease, as in effect as of the date of 
                enactment of this Act.
            (4) Valuation.--
                    (A) In general.--The value of a preferential lease 
                parcel shall be its fair market value for agricultural 
                purposes determined by an independent appraisal, 
                exclusive of the value of private improvements made by 
                the leaseholders while the land was federally owned 
                before the date of the enactment of this Act, in 
                conformance with the Uniform Appraisal Standards for 
                Federal Land Acquisition.
                    (B) Fair market value.--Any dispute over the fair 
                market value of a property under subparagraph (A) shall 
                be resolved in accordance with section 2201.4 of title 
                43, Code of Federal Regulations.
            (5) Conveyance to the state.--
                    (A) In general.--If a preferential leaseholder 
                fails to purchase a parcel within the period specified 
                in paragraph (3)(A), the Secretary shall convey the 
                parcel to the State of South Dakota Department of Game, 
                Fish, and Parks.
                    (B) Wildlife habitat mitigation.--Land conveyed 
                under subparagraph (A) shall be used by the South 
                Dakota Department of Game, Fish, and Parks for the 
                purpose of mitigating the wildlife habitat that was 
                lost as a result of the development of the Pick-Sloan 
                project.
            (6) Use of proceeds.--Proceeds of sales of land under this 
        Act shall be deposited as miscellaneous funds in the Treasury 
        and such funds shall be made available, subject to 
        appropriations, to the State for the establishment of a trust 
        fund to pay the county taxes on the lands received by the State 
        Department of Game, Fish, and Parks under this Act.
    (e) Conveyance of Nonpreferential Lease Parcels and Unleased 
Parcels.--
            (1) Conveyance by secretary to state.--
                    (A) In general.--Not later than 1 year after the 
                date of enactment of this Act, the Secretary shall 
                convey to the South Dakota Department of Game, Fish, 
                and Parks the nonpreferential lease parcels and 
                unleased parcels of the Blunt Reservoir and Pierre 
                Canal.
                    (B) Wildlife habitat mitigation.--Land conveyed 
                under subparagraph (A) shall be used by the South 
                Dakota Department of Game, Fish, and Parks for the 
                purpose of mitigating the wildlife habitat that was 
                lost as a result of the development of the Pick-Sloan 
                project.
            (2) Land exchanges for nonpreferential lease parcels and 
        unleased parcels.--
                    (A) In general.--The Governor may allow a person to 
                exchange land that the person owns elsewhere in the 
                State for a nonpreferential lease parcel or unleased 
                parcel at Blunt Reservoir or Pierre Canal, as the case 
                may be.
                    (B) Priority.--The right to exchange 
                nonpreferential lease parcels or unleased parcels shall 
                be granted in the following order or priority:
                            (i) Exchanges with current lessees for 
                        nonpreferential lease parcels.
                            (ii) Exchanges with adjoining and adjacent 
                        landowners for unleased parcels and 
                        nonpreferential lease parcels not exchanged by 
                        current lessees.
                    (C) Easement for water conveyance structure.--As a 
                condition of the exchange of land of the Pierre Canal 
                feature under this paragraph, the United States 
                reserves a perpetual easement to the land to allow for 
                the right to design, construct, operate, maintain, 
                repair, and replace a pipeline or other water 
                conveyance structure over, under, across, or through 
                the Pierre Canal feature.
    (f) Release From Liability.--
            (1) In general.--Effective on the date of conveyance of any 
        parcel under this Act, the United States shall not be held 
        liable by any court for damages of any kind arising out of any 
        act, omission, or occurrence relating to the parcel, except for 
        damages for acts of negligence committed by the United States 
        or by an employee, agent, or contractor of the United States, 
        before the date of conveyance.
            (2) No additional liability.--Nothing in this section adds 
        to any liability that the United States may have under chapter 
        171 of title 28, United States Code (commonly known as the 
        ``Federal Tort Claims Act'').
    (g) Requirements Concerning Conveyance of Lease Parcels.--
            (1) Interim requirements.--During the period beginning on 
        the date of enactment of this Act and ending on the date of 
        conveyance of the parcel, the Secretary shall continue to lease 
        each preferential lease parcel or nonpreferential lease parcel 
        to be conveyed under this section under the terms and 
        conditions applicable to the parcel on the date of enactment of 
        this Act.
            (2) Provision of parcel descriptions.--Not later than 180 
        days after the date of enactment of this Act, the Secretary 
        shall provide the State a full legal description of all 
        preferential lease parcels and nonpreferential lease parcels 
        that may be conveyed under this section.
    (h) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this Act $750,000 to reimburse the Secretary 
for expenses incurred in implementing this Act, and such sums as are 
necessary to reimburse the Governor for expenses incurred implementing 
this Act, not to exceed 10 percent of the cost of each transaction 
conducted under this Act.