49–006 

109TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 109–588 

BLUNT RESERVOIR AND PIERRE CANAL LAND 

CONVEYANCE ACT OF 2005 

JULY 20, 2006.—Committed to the Committee of the Whole House on the State of 

the Union and ordered to be printed 

Mr. POMBO, from the Committee on Resources, 

submitted the following 

R E P O R T 

[To accompany H.R. 4301] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Resources, to whom was referred the bill 

(H.R. 4301) 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, having considered the same, report favorably thereon 

without amendment and recommend that the bill do pass. 

PURPOSE OF THE BILL

The purpose of H.R. 4301 is 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. 


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BACKGROUND AND NEED FOR LEGISLATION

As part of the Pick-Sloan Missouri Basin Program, the federal 

government planned numerous dams and reservoirs on the Upper 

Missouri River in South Dakota. The projects would provide irrigation water, flood control, and power generation. Two of the four 

completed reservoirs (Oahe and Sharpe) impounded over 220,500 

acres of state and tribal lands. 

In 1968, Congress authorized the Secretary of the Interior to construct, operate, and maintain the Initial Stage of the Oahe Unit 

(Unit), James Division, for irrigation, municipal and industrial 

water supplies, flood control, fish and wildlife conservation, and 

recreational activities. Known as the Oahe Irrigation Project, it 

was to consist of a pumping plant, a system of main canals (including the Pierre Canal), along with the Blunt Dam and Reservoir 

roughly 35 miles east of Pierre. 

The federal government was authorized to acquire 42,000 acres 

of land to construct and operate the Blunt Reservoir and Pierre 

Canal feature of the Unit. Between 1972–1977, approximately 

19,000 acres were acquired in Hughes and Sully Counties with an 

understanding that the willing sellers would be able to lease back 

the land until the Project was completed. Some lands were purchased from willing sellers, while others were acquired through 

condemnation. At the time, many landowners believed that they 

would be able to purchase the land back if it was not needed for 

the Project. Some local opposition to the Project surfaced in 1973 

and continued to build until a series of public meetings were held 

in 1977 to determine if the Project should continue. Later that 

year, Project construction was halted. All major construction contract activities ceased, and land acquisition was halted, though the 

Blunt Reservoir and Pierre Canal have remained authorized to 

date. 

The acquired lands have remained federal property since Project 

construction ended and the Bureau of Reclamation has administered them using preferential and nonpreferential leases. Preferential leaseholders are the original land owners (and their descendants) at the time of Project purchase, with holdings of approximately 13,700 acres. The non-preferential leaseholders consist 

of those who had not previously owned or controlled the land prior 

to Project purchase, with holdings of approximately 4,700 acres. 

Throughout the years, all of this land has remained off local property tax rolls. Most of the land is still used for agricultural purposes, while some is not in original condition and contains stockpiled materials, fences, access roads, detours, and other various 

items. 

In order to meet aspects of Section 602 of Public Law 105–277, 

known as the Cheyenne River Sioux Tribe, Lower Brule Sioux 

Tribe, and State of South Dakota Terrestrial Wildlife Habitat Restoration Act, the State developed a habitat mitigation plan for the 

previously mentioned 220,500 acres of lost wildlife habitat. This 

plan allows for the development of approximately 27,000 acres of 

wildlife habitat in the State. Transferring approximately 4,700 

acres of non-preferential lease lands in the Blunt Reservoir feature 

to the State Department of Game, Fish and Parks would constitute 

a step toward satisfying the habitat mitigation obligation. 


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The goals of H.R. 4301 are to: deauthorize the Blunt Reservoir 

feature; allow preferential leaseholders the first option to purchase 

the land they currently lease; and to convey to the State Department of Game, Fish, and Parks nonpreferential leased parcels, unleased parcels, and any parcels not purchased back for the purposes of mitigating lost wildlife habitat. Preferential leaseholders 

will have five years to purchase the land, via cash or 30 year financing. In order to encourage cash purchases, the legislation fixes 

the price at 10% below fair market value, as determined by Uniform Appraisal Standards. 

Related to a February 8, 2006, Water and Power Subcommittee 

hearing on H.R. 4301, the State commissioned a study to evaluate 

the change in land values around the Blunt Reservoir and Pierre 

Canal feature lands. Between 2000, just after the Blunt Reservoir 

legislation was first introduced, and 2006, the State’s report concluded that agricultural land values have increased 88 percent 

around the Reservoir and canal feature lands. This substantial increase is consistent with concerns raised at that hearing. 

COMMITTEE ACTION

H.R. 4301 was introduced on November 10, 2005, by Congresswoman Stephanie Herseth (D–SD). The bill was referred to the 

Committee on Resources, and within the Committee to the Subcommittee on Water and Power. On February 8, 2006, the Subcommittee held a hearing on the bill. On June 21, 2006, the Full 

Resources Committee met to consider the bill. The Subcommittee 

on Water and Power was discharged from further consideration of 

the bill by unanimous consent. No amendments were offered and 

the bill was ordered favorably reported to the House of Representatives by unanimous consent. 

SECTION-BY-SECTION ANALYSIS

Section 1. Short title 

This section cites the short title of this bill as the ‘‘Blunt Reservoir and Pierre Canal Land Conveyance Act of 2005.’’

Section 2. Blunt Reservoir and Pierre Canal 

Subsection (a) defines key terms used in the Act. 

Subsection (b) deauthorizes the Blunt Reservoir feature of the 

Oahe Irrigation Project. 

Subsection (c) requires the State to accept land conveyed to it 

under the bill in ‘‘as is’’ condition, assume responsibility for any 

outstanding liabilities, and recognize any outstanding obligations 

associated with expired easements or other rights granted to either 

feature. The conveyances to the State shall also be subject to the 

reservations by the United States and the conditions specified in 

section 667b of title 16, United States Code, for transfer of property 

to State agencies for wildlife conservation purposes. The conveyances shall be subject to the reservation by the United States of all 

oil, gas, and mineral rights, to the condition that the property continue to be used for wildlife conservation 

Subsection (d) allows the preferential leaseholders an option to 

purchase the land they lease within 5 years of enactment. Any purchases shall be from the Commission, acting as an agent for the 


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Secretary. The leaseholders would have the option of paying cash 

and receiving a 10 percent discount on the land’s value, or paying 

by installment with a 10 percent down payment and the remainder 

paid over a 30-year period at 3 percent annual interest. If the preferential leaseholder fails to purchase a parcel within the 5-year period, that parcel would be conveyed to the State to assist in the implementation of the wildlife habitat mitigation plan. Proceeds of 

the sales shall be deposited as miscellaneous funds in the Treasury 

and made available, subject to appropriation, 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 Act. 

Subsection (e) directs the Secretary to convey to the South Dakota Department of Game, Fish, and Parks 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. The 

Commission would also be authorized, 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. This subsection also reserves to the United 

States a perpetual easement to the land to allow for a pipeline or 

other water conveyance structure over, under, across, or through 

the Pierre Canal Feature. 

Subsection (f) releases the United States from liability, except for 

damages from certain acts of negligence committed prior to the 

date of conveyance. 

Subsection (g) provides that during the interim period prior to 

the 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 parcel under the same lease terms as prior to enactment of this Act. 

Subsection (h) authorizes $750,000 to be appropriated to reimburse the Secretary for expenses incurred in implementing this 

Act, and such sums as are necessary to reimburse the Commission 

for expenses incurred implementing this Act. 

COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of rule XIII 

of the Rules of the House of Representatives, the Committee on Resources’ oversight findings and recommendations are reflected in 

the body of this report. 

CONSTITUTIONAL AUTHORITY STATEMENT

Article IV section 3, clause 2 of the Constitution of the United 

States grants Congress the authority to enact this bill. 

COMPLIANCE WITH HOUSE RULE XIII

1. Cost of Legislation. Clause 3(d)(2) of rule XIII of the Rules of 

the House of Representatives requires an estimate and a comparison by the Committee of the costs which would be incurred in carrying out this bill. However, clause 3(d)(3)(B) of that rule provides 

that this requirement does not apply when the Committee has included in its report a timely submitted cost estimate of the bill preVerDate Aug 31 2005 22:47 Jul 21, 2006 Jkt 049006 PO 00000 Frm 00004 Fmt 6659 Sfmt 6602 E:\HR\OC\HR588.XXX HR588

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pared by the Director of the Congressional Budget Office under section 402 of the Congressional Budget Act of 1974. 

2. Congressional Budget Act. As required by clause 3(c)(2) of rule 

XIII of the Rules of the House of Representatives and section 

308(a) of the Congressional Budget Act of 1974, this bill does not 

contain any new budget authority, credit authority, or an increase 

or decrease in revenues or tax expenditures. According to the Congressional Budget Office, enactment of this bill would increase direct spending by about $300,000 in 2007, but also result in $1.1 

million in collections from asset sales, with a net reduction in direct spending of $800,000 over the 2007–2016 time period. 

3. General Performance Goals and Objectives. As required by 

clause 3(c)(4) of rule XIII, the general performance goal or objective 

of this bill is 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. 

4. Congressional Budget Office Cost Estimate. Under clause 

3(c)(3) of rule XIII of the Rules of the House of Representatives and 

section 403 of the Congressional Budget Act of 1974, the Committee has received the following cost estimate for this bill from the 

Director of the Congressional Budget Office: 

H.R. 4301—Blunt Reservoir and Pierre Canal Land Conveyance Act 

of 2005 

Summary: H.R. 4301 would direct the Secretary of the Interior 

to transfer title to the lands and facilities that make up the nonpreferential lease parcels and unleased parcels of the Blunt Reservoir and Pierre Canal in South Dakota to the state. During the 

five years following enactment, H.R. 4301 would allow any preferential leaseholder to purchase the parcel that is the subject of 

their lease for cash or on an installment basis. After five years, the 

bill would direct the Secretary to transfer any remaining parcels to 

South Dakota. H.R. 4301 would authorize the appropriation of 

$750,000 to implement those provisions. The bill also would authorize the appropriation of payments to South Dakota equal to the 

amount of any proceeds from sales to leaseholder. 

Assuming appropriation of the necessary amounts, CBO estimates that implementing H.R. 4301 would cost about $2 million in 

2007. CBO estimates that enacting H.R. 4301 would increase direct 

spending by about $300,000 in 2007. Enacting the bill would also 

lead to about $1.1 million in collections from asset sales. Thus, the 

net impact on direct spending over the 2007–2016 period would be 

a reduction of $0.8 million. 

H.R. 4301 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA). 

Accepting the land conveyance authorized in this bill would be voluntary on the part of South Dakota and any costs to the state 

would be incurred voluntarily. 


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Estimated cost to the Federal Government: Subject to the appropriation of the authorized amounts, CBO estimates that implementing H.R. 4301 would cost about $2 million in 2007. CBO estimates that enacting the bill would increase offsetting receipts by 

about $1.1 million in 2007 from land sales and would increase direct spending by about $300,000 in 2007 for loan subsidies for the 

installment purchases of certain land parcels in the affected area. 

The estimated budgetary impact of H.R. 4301 is shown in the following table. The costs of this legislation fall within budget function 300 (natural resources and environment). 

By fiscal year, in millions of dollars— 

2007 2008 2009 2010 2011 

CHANGES IN SPENDING SUBJECT TO APPROPRIATION 

Payments to South Dakota: 

Estimated Authorization Level ......................................... 0 1.9 0 0 0 

Estimated Outlays ............................................................ 0 1.9 0 0 0 

CHANGES IN DIRECT SPENDING 

Collections from Land Sales: 

Estimated Budget Authority ............................................. ¥1.1 0 0 0 0 

Estimated Outlays ............................................................ ¥1.1 0 0 0 0 

Loan Subsidy Cost: 

Estimated Budget Authority ............................................. 0.3 0 0 0 0 

Estimated Outlays ............................................................ 0.2 0.1 0 0 0 

Total: 

Estimated Budget Authority .................................... ¥0.8 0 0 0 0 

Estimated Outlays ................................................... ¥0.9 0.1 0 0 0 

Basis of estimate 

Spending subject to appropriation 

H.R. 4301 would direct the Secretary of the Interior to transfer 

title to the lands and facilities that make up the nonpreferential 

lease parcels and unleashed parcels of the Blunt Reservoir and 

Pierre Canal to South Dakota. During the five years following enactment, H.R. 4301 would allow any preferential leaseholder to 

purchase the parcel that is the subject of their lease. After such 

time has expired, the bill would direct the Secretary to transfer any 

remaining preferential lease parcels to the state. H.R. 4301 would 

authorize the appropriation of $750,000 to implement those provisions. 

The bill also would authorize the appropriation of federal proceeds to South Dakota from sales to leaseholders. We estimate that 

by selling parcels to preferential leaseholders, the federal government would collect nearly $1.1 million in 2007. Thus, subsequent 

appropriations of that amount to South Dakota would cost $1.1 

million in 2007. 

Direct spending 

To purchase their leased lands under the bill, preferential leaseholders would pay the value of such lands appraied for agricultural 

purposes only (i.e., not including recreational value). The bill would 

allow leaseholders to pay 10 percent less than the appraised value 

if they pay up front in a lump sum. The bill also would allow those 

leaseholders whose parcels are valued above $10,000 to pay in installments over 30 years with an annual interest rate of 3 percent. 

Based on information from the Bureau of Reclamation, we expect 


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that over the five-year period, leaseholders would purchase about 

14 parcels valued at less than $10,000 each. We estimate that the 

government would receive about $100,000 in 2007 from such sales. 

Because of the favorable loan terms under the bill, we expect that leaseholders with parcels valued above $10,000 would purchase those parcels on an installment basis. Based on information 

from the Bureau of Reclamation, CBO estimates that the government would collect about $1 million from the sale of those morevaluable leases in 2007. 

The Federal Credit Reform Act of 1990 requires that agencies 

record the subsidy cost of financing arrangements in the year the 

assets are sold if payment is deferred for more than 90 days. In effect, H.R. 4301 would allow the Secretary to issue direct loans to 

the leaseholders with parcels valued about $10,000. Based on the 

experience of similar loan programs within the Department of Agriculture, CBO expects that very few purchasers would default on 

their payments. Because the purchasers would pay annual interest 

of 3 percent, an amount below the interest rate paid by the Treasury, CBO estimates that the loans under H.R. 4301 would have a 

subsidy cost of about $300,000, or 30 percent of the purchase price. 

Under credit reform procedures, this cost would be recorded in 

2007. 

Intergovernmental and private-sector impact: H.R. 4301 contains 

no intergovernmental or private-sector mandates as defined in 

UMRA. Accepting the land conveyance authorized in this bill would 

be voluntary on the part of South Dakota and any costs to the state 

would be incurred voluntarily. 

Estimate prepared by: Federal Costs: Julie Middleton; Impact on 

state, local, and tribal governments: Lisa Ramirez-Branum; Impact 

on the private sector: Craig Cammarata. 

Estimate approved by: Peter H. Fontaine, Deputy Assistant Director for Budget Analysis. 

COMPLIANCE WITH PUBLIC LAW 104–4

This bill contains no unfunded mandates. 

PREEMPTION OF STATE, LOCAL OR TRIBAL LAW

This bill is not intended to preempt any State, local or tribal law. 

CHANGES IN EXISTING LAW

If enacted, this bill would make no changes in existing law. 

Æ 


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