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 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 
                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.

            Passed the House of Representatives July 24, 2006.

            Attest:

                                                 KAREN L. HAAS,

                                                                 Clerk.

Summary: Blunt Reservoir and Pierre Canal Land Conveyance Act of 2006 - Deauthorizes the Blunt Reservoir feature of the Oahe Unit, James Division, authorized as part of the Pick-Sloan Missouri River Basin Program. Allows preferential leaseholders of parcels of the Blunt Reservoir and Pierre Canal features an option to purchase the land they lease from the Secretary of the Interior, acting through the Commissioner of Reclamation, or the Commission of Schools and Public Lands of South Dakota. Prescribes terms for such purchases, the option exercise period, and the basis for parcel valuation. Directs the Secretary to convey 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 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. Authorizes: (1) the state of South Dakota to accept certain conditions of conveyance, including that it receives the land conveyed in as is condition and accepts liability accruing as a result of ownership, operation, and maintenance of the features. And (2) 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. Directs the Secretary to transfer all archeological and cultural resource items collected from the Blunt Reservoir and Pierre Canal Features to the South Dakota State Historical Society. Authorizes appropriations.