to in subparagraph (A), including liability asso-
ciated with certain outstanding obligations asso-
ciated with expired easements, or any other 
right granted in, on, over, or across either fea-
ture; and 
(C) the responsibility that the Commission 
will act as the agent for the Secretary in ad-
ministering 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
OUT-
STANDING
RIGHTS.—A conveyance to the State 
under subsection (d)(5) or (e) or a sale to a pref-
erential leaseholder under subsection (d) shall be 
made subject to—
(A) oil, gas, and other mineral rights re-
served 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 sub-
section (d)(5) or (e) shall be subject to the reserva-
tions by the United States and the conditions speci-
fied in section 1 of the Act of May 19, 1948 (chap-
ter 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 Sec-
retary, the preferential lease parcel that is the sub-
ject 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 deter-
mined under paragraph (4); minus
(II) ten percent of that value. 
(ii) Installment purchase, with 10 per-
cent 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 lease-
holder shall have until the date that is 5 years 
after enactment of this Act to exercise the op-
tion under paragraph (1). 
(B) CONTINUATION OF LEASES.—Until the 
date specified in subparagraph (A), a pref-
erential 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 pref-
erential lease parcel shall be its fair market 
value for agricultural purposes determined by 
an independent appraisal less 25 percent, exclu-
sive 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 Ap-
praisal 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 accord-
ance with section 2201.4 of title 43, Code of 
Federal Regulations. 
(5) CONVEYANCE TO THE STATE.—
(A) IN GENERAL.—If a preferential lease-
holder fails to purchase a parcel within the pe-
riod specified in paragraph (3)(A), the Sec-
retary 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 miti-
gating the wildlife habitat that was lost as a re-
sult of the development of the Pick-Sloan 
project. 
(6) USE OF PROCEEDS.—Proceeds of sales of 
land under this Act shall be deposited as miscella-
neous 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 Sec-
retary shall convey to the South Dakota De-
partment of Game, Fish, and Parks the non-
preferential 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 miti-
gating the wildlife habitat that was lost as a re-
sult 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 per-
son to exchange land that the person owns else-
where 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 pri-
ority: 
(i) Exchanges with current lessees for 
nonpreferential lease parcels. 
(ii) Exchanges with adjoining and ad-
jacent 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 per-
petual 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 con-
veyance of any parcel under this Act, the United 
States shall not be held liable by any court for dam-
ages 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 ‘‘Fed-
eral Tort Claims Act’’). 
(g) REQUIREMENTS CONCERNING CONVEYANCE OF 
LEASE PARCELS.—
(1) INTERIM REQUIREMENTS.—During the pe-
riod 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 pref-
erential 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 enact-
ment of this Act, the Secretary, in consultation with 
the Commission, shall provide the State a full legal 
description of all preferential lease parcels and non-
preferential lease parcels that may be conveyed 
under this section. 
(h) CURATION OF ARCHEOLOGICAL COLLECTIONS.—
The Secretary, in consultation with the State, shall trans-
fer, without cost to the State, all archeological and cul-
tural 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 in-
curred in implementing this Act, and such sums as are 
necessary to reimburse the Commission and the State De-
partment 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:
Clerk.