A bill to direct the Secretary of the Interior to convey certain parcels of land acquired for the Blunt Reservoir and Pierre Canal features of the initial stage of the Oahe Unit, James Division, South Dakota, to the Commission of Schools and Public Lands and the Department of Game, Fish, and Parks of 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 from the Commission, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Blunt Reservoir and Pierre Canal 
Land Conveyance Act of 2006''.

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) Commission.--The term ``Commission'' means the Commission 
    of Schools and Public Lands of the State.
        (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 term of each conveyance under subsections 
    (d)(5) and (e), respectively, the State may agree to accept--
            (A) in ``as is'' condition, the portions of the Blunt 
        Reservoir feature and the Pierre Canal feature that pass into 
        State ownership;
            (B) 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) the responsibility that the Commission will 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), 
    as amended (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 Secretary or the Commission, 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 one 
        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) ten 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 less 25 percent, 
        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 offer to 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 the bill.
    (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 offer to 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.--With the concurrence of the South Dakota 
        Department of Game, Fish, and Parks, the South Dakota 
        Commission of Schools and Public Lands 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 the enactment of this Act, the Secretary, in 
    consultation with the Commission, 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) Curation of Archeological Collections.--The Secretary, in 
consultation with the State, shall transfer, without cost to the State, 
all archeological and cultural resource items collected from the Blunt 
Reservoir feature and Pierre Canal feature to the South Dakota State 
Historical Society.
    (i) 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 Commission and the State Department of Game, 
Fish, and Parks for expenses incurred implementing this Act, not to 
exceed 10 percent of the cost of each transaction conducted under this 
Act.

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.

Summary: Blunt Reservoir and Pierre Canal Land Conveyance Act of 2006 - Deauthorizes the Blunt Reservoir feature of the Oahe Irrigation Project authorized as part of the Pick-Sloan Missouri River Basin Program. Allows preferential leaseholders of parcels of the Blunt Reservoir and Pierre Canal an option to purchase such parcels from the Secretary of the Interior or the Commission of Schools and Public Lands of South Dakota for five years after this Act's enactment and for the fair market value for agricultural purposes less 25, exclusive of the value of improvements made while the land was federally owned. Directs the Secretary to offer to convey to the South Dakota Department of Game, Fish, and Parks all preferential lease parcels not purchased by the leaseholder, and 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. Authorizes the Commission, with the Department's concurrence, 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. Requires priority to be granted to: (1) exchanges with current lessees for nonpreferential lease parcels. And (2) exchanges with adjoining and adjacent landowners for unleased parcels and nonpreferential lease parcels not exchanged by current lessees. Conditions the exchange of land of the Pierre Canal Feature on US reservation of a perpetual easement to the land to allow it to design, construct, operate, maintain, repair, and replace a pipeline or other water conveyance structure over, under, across, or through the Pierre Canal feature. Shields the United States from liability for damages arising out of any act, omission, or occurrence relating to parcels conveyed under this Act, except for acts of negligence committed before the date of conveyance. Directs the Secretary: (1) to continue, until the conveyance date, to lease each parcel to be conveyed according to the terms and conditions applicable on the date of enactment of this Act. And (2) to provide South Dakota with a full legal description of all parcels that may be conveyed. Directs the Secretary to transfer all archeological and cultural resource items collected from the Blunt Reservoir Feature and Pierre Canal Feature to the South Dakota State Historical Society. Authorizes appropriations to reimburse the Secretary, the Commission, and the Department for expenses incurred in implementing this Act, not to exceed 10 of the cost of each transaction.