SECTION 1. DEFINITIONS.

    In this Act:
            (1) Indian tribe.--The term ``Indian tribe'' means an 
        Indian tribe, band, nation, pueblo, or other organized group or 
        community, including any Alaska Native village or regional 
        corporation (as defined in or established pursuant to the 
        Alaska Native Claims Settlement Act (43 U.S.C. 1601 et seq.)), 
        that is recognized as eligible for the special programs and 
        services provided by the United States to Indians because of 
        their status as Indians.
            (2) Secretary.--The term ``Secretary'' means the Secretary 
        of the Interior.

SEC. 2. TRANSFER OF BUREAU OF LAND MANAGEMENT LAND.

    (a) Required Offer.--
            (1) In general.--Subject to valid existing rights and 
        except as otherwise provided in this Act, the Secretary shall 
        offer to transfer all right, title, and interest of the United 
        States in and to all land and interests in land administered by 
        the Bureau of Land Management to the State in which the land 
        and interests are located.
            (2) Land and interests included.--The land and interests in 
        land referred to in paragraph (1) include--
                    (A) the fee simple interest, if the United States 
                owns both the surface and mineral rights;
                    (B) the mineral rights, if the surface estate is 
                owned by a non-Federal person, including a State or 
                political subdivision of a State; and
                    (C) water rights related to the land or interest in 
                land.
            (3) Exclusion of mineral interests underlying indian 
        reservations.--Paragraph (1) does not apply with respect to the 
        mineral interests underlying a surface estate held by the 
        United States in trust for an Indian tribe.
    (b) Offer Within 2 Years.--The offer required by subsection (a) to 
be made to a State shall be made to the Governor of the State not later 
than 2 years after the date of enactment of this Act.
    (c) Acceptance of Offer.--
            (1) All or nothing.--A State may accept an offer under 
        subsection (a) in its entirety but may not accept the offer in 
        part.
                    (B) reject the offer in its entirety.
            (2) Acceptance by the governor.--Acceptance by a State of 
        an offer under subsection (a) may be made only by the Governor 
        of the State, in writing, to the Secretary.
    (d) Effective Date of Transfer.--Any transfer of land under this 
Act shall be effective with respect to a State on the date that is 10 
years after the date on which the offer to the State is accepted.
    (e) Surveys.--The Secretary is not required to conduct a survey of 
any land prior to transferring the land under this Act.
    (f) Retention of Ownership by the State.--
            (1) Restrictive covenant.--
                    (A) In general.--An instrument by which land or an 
                interest in land is transferred under this Act shall 
                contain a restrictive covenant stating that the State 
                shall not convey any ownership interest in the land or 
                interest in land to any person (including a political 
                subdivision of the State) unless the Governor of the 
                State submits to the Secretary, at least 90 days before 
                the date of conveyance, a certification that--
                            (i) the land or interest in land will be 
                        conveyed in connection with a transaction or 
                        series of transactions in which there will be 
                        conveyed to the State land or an interest in 
                        land that is of at least equal value to the 
                        State; and
                            (ii) the ownership of that land or interest 
                        in land by the State will be subject to the 
                        same restrictive covenant.
                    (B) Breach.--Not later than 90 days after the date 
                on which the Secretary receives a certification under 
                paragraph (1), the Attorney General, at the request of 
                the Secretary, may bring an action in the United States 
                district court for the district in which the land is 
                located to enjoin a conveyance in breach of the 
                restrictive covenant.

SEC. 3. LEASES, PERMITS, AND UNPATENTED MINING CLAIMS.

    (a) Valid Leases and Permits.--A State to which land is transferred 
under this Act shall honor valid existing leases and permits on the 
land for the term of the lease or permit and shall manage the leases 
and permits in accordance with the other terms and conditions of the 
leases and permits.
    (b) Mining Claims.--
            (1) In general.--Except for mining claims for which the 
        holder is entitled to a patent as provided in paragraph (2), 
        after the date on which land subject to a mining claim is 
        transferred to a State under this Act, the validity and 
        continued existence of the mining claim shall be determined 
        under the law of the State to which the land was transferred 
        and shall be administered in accordance with the law of that 
        State.
            (2) Issuance of patent.--The holder of a mining claim is 
        entitled to the issuance of a patent in the case of a mining 
        claim on land transferred to a State under this Act in the same 
manner and degree to which the holder would have been entitled to prior 
to the date of the transfer if, as of the date of the transfer--
                    (A) a patent application was filed with the 
                Secretary; and
                    (B) the holder fully complied with--
                            (i) all requirements under sections 2325 
                        and 2326 of the Revised Statutes (30 U.S.C. 29 
                        and 30) for vein or lode claims;
                            (ii) all requirements under sections 2329, 
                        2330, 2331, and 2333 of the Revised Statutes 
                        (30 U.S.C. 35, 36, 37) for placer claims; and
                    (C) all requirements applicable to the patent 
                application for mill site claims.
    (c) Rights-of-Way.--A State to which land is transferred under this 
Act shall respect a right-of-way granted by the United States on the 
land in accordance with the terms and conditions of the right-of-way.

SEC. 4. MANAGEMENT OF LAND TRANSFERRED UNDER THIS ACT.

    (a) Wilderness.--Land transferred under this Act that has been 
designated by an Act of Congress as wilderness shall be managed by the 
State as wilderness in accordance with the requirements of the 
Wilderness Act (16 U.S.C. 1131 et seq.), the law that designated the 
land as wilderness, and any other Federal law that specifically 
provides for the management of the land, except that the State shall be 
substituted for the Secretary as the person with authority and 
responsibility to manage the land.
    (b) Military Uses.--
            (1) Continued use.--Land transferred under this Act that on 
        the date of transfer is subject to use for military purposes 
        shall continue to be subject to the same military uses.
            (2) Land subject to withdrawal.--
                    (A) In general.--In the case of land transferred to 
                a State under this Act that is subject to a withdrawal 
                from public use for military purposes, the State shall 
                respect the withdrawal and military use for the term of 
                the withdrawal and may not impose any fee or other 
                charge on the United States with respect to the 
                military purpose.
                    (B) Negotiation at end of term of withdrawal.--At 
                the end of the term of withdrawal, the Secretary of the 
                military department concerned, or the Secretary of 
                Defense, may negotiate with the Governor of the State 
                for the continued use of the land.
                    (C) Decontamination.--Land for which there is not a 
                continued military use shall be decontaminated by the 
                appropriate Secretary in accordance with the Act of 
                Congress that withdrew the land for military purposes 
                or the withdrawal order, if any.
    (c) Records.--
            (1) Holding by the secretary.--The Secretary shall continue 
        to hold all land records of the Secretary with respect to the 
        land transferred to a State under this Act.
            (2) Copies to the state.--The Secretary shall provide to 
        the State full copies of all applicable land records relating 
        to land transferred under this Act.
            (3) Availability to the public.--The Secretary shall make 
        such records available for public use as the Secretary 
        determines to be appropriate for public disclosure.
    (d) Indian Land.--The mineral interests described in section 
2(a)(3) shall be transferred from the administrative jurisdiction of 
the Bureau of Land Management and shall be held in trust for the Indian 
tribe for which the overlying surface estate is held in trust.
    (e) Continued Public Access.--A State to which land or an interest 
in land is transferred under this Act shall ensure that the public 
continues to have access to the land for the purposes of hunting, 
fishing, and other appropriate recreational activities, in accordance 
with applicable Federal and State laws and the principles of multiple 
use, to substantially the same extent as on the date of transfer.

SEC. 5. WATER RIGHTS.

    (a) In General.--The Secretary shall transfer to a State to which 
land is transferred under this Act all water rights of the United 
States associated with the land.
    (b) Certain Rights Not Affected.--A transfer of water rights under 
subsection (a) shall not be construed as--
            (1) affecting, impairing, diminishing, subordinating, or 
        enlarging--
                    (A) the rights of the United States or any State to 
                water under any international treaty, interstate 
                compact, or existing judicial decree;
                    (B) any obligation of the United States to Indians 
                or Indian tribes or any claim or right owned or held by 
                or for Indians or Indian tribes, including with respect 
                to any Indian water compact;
                    (C) any right to any quantity of water reserved or 
                used for governmental purposes or programs of the 
                United States at any time prior to the date of 
                enactment of this Act; or
                    (D) any license or permit issued before the date of 
                enactment of this Act; or
            (2) as a recognition, disclaimer, relinquishment, or 
        reduction of any water right of the United States reserved or 
        appropriated before the date of enactment of this Act.

SEC. 6. REDUCTION IN BUDGET AUTHORITY FOR THE BUREAU OF LAND 
              MANAGEMENT.

    (a) Cap on Obligations and Expenditures.--Beginning with the fiscal 
year in which this Act is enacted, not more than $800,000,000 may be 
obligated or expended in any fiscal year by the Bureau of Land 
Management in carrying out its duties, functions, and responsibilities 
under any provision of law.
    (b) Priority for Use of Fiscal Resources.--The Secretary shall give 
priority to expending amounts available to the Bureau of Land 
Management to land management activities and to carrying out this Act.
Output: Requires the Secretary of the Interior to offer to transfer all right, title, and interest of the United States (including fee simple interest and mineral and water rights) in lands administered by the Bureau of Land Management (BLM) to the State in which such land and interests are located.  (Excludes mineral interests underlying a surface estate held in trust by the United States for an Indian tribe which interests shall be transferred from the BLM administrative jurisdiction to be held in trust for the Indian tribe for which the overlying surface estate is held in trust.) 
Permits a State to accept an offer only in its entirety.  Makes such a land transfer effective ten years after a State accepts the offer.  Restricts conveyance of such lands by a State. 
(Sec. 3) Requires a State to honor valid existing leases and permits on such lands and to manage the land in accordance with other terms and conditions of such leases and permits. 
Provides that, except for mining claims for which the holder is entitled to a patent as provided by this Act and under specified conditions, after the date on which land subject to a mining claim is transferred to a State, the validity and continued existence of such claim shall be determined under the law of the State to which the land was transferred and shall be administered in accordance with such State law. 
Requires a State to which land is transferred to respect a right- of-way granted by the United States on the land in accordance with the terms and conditions of the right-of-way. 
(Sec. 4) Requires transferred land:  (1) that has been designated by an Act of Congress as wilderness to be managed by the State as wilderness in accordance with the requirements of Federal laws that specifically provide for its management; (2) that is, on the date of transfer, subject to use for military purposes to continue to be subject to the same military uses; and (3) to continue to provide for the public access provided on the date of transfer. 
Sets forth provisions relating to the transfer of water rights on the transferred land. 
Limits BLM obligations and expenditures to $800 million beginning with the fiscal year in which this Act is enacted. 
Requires the Secretary to give priority to expending amounts available to the BLM for land management activities and carrying out this Act.