[Senate Report 107-253]
[From the U.S. Government Publishing Office]
Calendar No. 570
107th Congress Report
SENATE
2d Session 107-253
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BLUNT RESERVOIR AND PIERRE CANAL LAND CONVEYANCE ACT
_______
September 9, 2002.--Ordered to be printed
_______
Mr. Bingaman, from the Committee on Energy and Natural Resources,
submitted the following
R E P O R T
[To accompany S. 1028]
The Committee on Energy and Natural Resources, to which was
referred the bill (S. 1028) 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, reports favorably thereon
with an amendment and recommends that the bill, as amended, do
pass.
The amendment is as follows:
Strike out all after the enacting clause and insert in lieu
thereof the following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Blunt Reservoir and Pierre Canal
Land Conveyance Act of 2002''.
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 condition of each conveyance under
subsections (d)(5) and (e), respectively, the State shall 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 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 1 of the following terms:
(i) Cash purchase for the amount that is
equal to--
(I) the value of the parcel
determined under paragraph (4);
(II) 10 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,
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 aproperty 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 of 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 enactment of this Act, the Secretary
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) 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 for expenses incurred
implementing this Act, not to exceed 10 percent of the cost of each
transaction conducted under this Act.
PURPOSE
The purpose of S. 1028 is to authorize the conveyance of
approximately 17,000 acres of Federal land in South Dakota
administered by the Bureau of Reclamation that were never used
for the proposed Blunt Reservoir. The lands would be conveyed
back to the original land owners or their descendants, or to
the State of South Dakota for the mitigation of lost wildlife
habitat.
BACKGROUND AND NEED
S. 1028 is the product of more than three years of
discussion with local landowners, the South Dakota Water
Congress, the Bureau of Reclamation, local legislators,
representatives of South Dakota sportsmen groups, and other
affected citizens.
The Oahe Unit was originally approved as part of an overall
plan or water development in the Missouri River Basin that was
incorporated in the Floor Control Act of 1944. The initial
stage of the project included a system of main canals, such as
the Pierre Canal, running east from the Oahe Reservoir, and the
establishment of regulating reservoirs, including the Blunt Dam
and Reservoir, located approximately 35 miles east of Pierre,
South Dakota.
A total of 17,878 acres of land was acquired from willing
sellers for the proposed Blunt Reservoir feature during the
1970's. Additional land was acquired for the Pierre Canal
feature.
After the growth of opposition to the project, construction
on the Oahe unit was halted on September 30, 1977. Congress did
not provide funds for the project in the fiscal year 1978.
In response to this situation, the Bureau of Reclamation
gave to those persons who had willingly sold their lands to the
project, and their descendants, the right to lease those lands
and use them as they had in the past until they were needed by
the Federal Government for project purposes. Since 1978, the
Bureau of Reclamation has administered these lands on a
preference lease basis for original landowners or their
descendants and on a non-preferential basis for lands under
lease to persons who had not previously owned or controlled the
land.
Currently, the Bureau of Reclamation administers
approximately 13,000 acres as preferential leases and
approximately 4,300 acres as non-preferential leases in Blunt
Reservoir. The Bureau also administers approximately 1,100
acres of preferential leases and additional acreage of non-
preferential leases in the Pierre Canal feature. The lands are
not in their original condition. Various stockpiled materials,
fences, access roads, road detours, and other items left by the
Bureau remain on the land.
The Oahe project was a part of the overall Pick-Sloan
Missouri Basin program, which included four major dams across
the Missouri River that caused the loss of approximately
221,000 acres of fertile, wooded bottomland that was productive
wildlife habitat.
Under the provisions of the Wildlife Coordination Act of
1958, the State of South Dakota has developed a plan to
mitigate a part of this lost wildlife habitat. The transfer of
the 4,304 acres of non-preferential lease lands in the Blunt
Reservoir feature to the South Dakota Department of Game, Fish
and Parks would satisfy, in part, this habitat mitigation
obligation.
LEGISLATIVE HISTORY
S. 1028 was introduced by Senators Daschle and Johnson on
June 13, 2001. The Subcommittee on Public Lands and Forests
held a hearing on S. 1028 on November 27, 2001. At the business
meeting on July 31, 2002, the Committee on Energy and Natural
Resources ordered S.1028, as amended, favorably reported.
COMMITTEE RECOMMENDATION
The Committee on Energy and Natural Resources, in open
business session on July 31, 2002, by a voice vote of a quorum
present, recommends that the Senate pass S. 1028, if amended as
described herein.
COMMITTEE AMENDMENT
During its consideration of S. 1028, the Committee adopted
an amendment in the nature of a substitute which changes the
structure of land conveyances in S. 1028 and removes direct
spending provisions. As introduced, S. 1028 conveyed Federally
owned land to the State of South Dakota for no consideration,
on the condition that the State offer the land to preferential
leaseholders. The State would have kept the proceeds from any
such sales.
Under the substitute amendment, the Federal Government will
keep the lands leased to preferential leaseholders while the
State Schools Commission attempts to sell them as an agent for
the Federal Government. If the lands are sold, the money will
return to the U.S. Treasury. The amendment authorizes the State
of South Dakota to establish a trust fund to pay the county
taxes on the lands received by the State Department of Game,
Fish and Parks under the bill, subject to appropriation.
The amendment does not substantially change the provisions
concerning lands leased to nonpreferential leaseholders, with
one exception. The conveyance of these lands to the State shall
be subject to the conditions specified in section 667b of title
16, United States Code, for transfer of property to state
agencies for wildlife conservation purposes.
The substitute amendment also makes a number of other
changes, including removing the findings and ensuring that the
land subject to sale is appraised at fair market value for
agricultural purposes.
The amendment is explained in detail in the section-by-
section analysis, below.
SECTION-BY-SECTION ANALYSIS
Section 1 entitles the Act the ``Blunt Reservoir and Pierre
Canal Land Conveyance Act of 2002.''
Section 2 (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 of South Dakota to accept
land conveyed to it under the bill in ``as in'' condition,
assume responsibility for any outstanding liabilities, and
recognize any outstanding rights of third parties. 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 and in the event it is no longer used for
such purposes or in the event it is needed for national defense
purposes title shall revert to the United States.
Subsection (d) allows the preferential leaseholders
(original landowners or descendants, oroperators of the land at
the time of purchase) an option to purchase the land they lease within
5 years of enactment. Any purchases shall be from the South Dakota
Commission of Schools and Public Lands (``Commission''), acting as an
agent for the Secretary of the Interior. The leaseholders would have
the option of paying cash and receiving a 10 percent discount on the
land's value, or receiving a 30-year mortgage at 3 percent annual
interest.
The value of a preferential lease parcel shall be its fair
market value for agricultural purposes, as determined by an
independent appraisal, 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. If the preferential leaseholder fails to
purchase a parcel within the 5-year period, that parcel would
be conveyed to the South Dakota Department of Game, Fish, and
Parks 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 bill.
Subsection (e) directs the Secretary of the Interior 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 expiration of their purchase option after five
years, the preferential leaseholders would be entitled to
continue to lease from the Secretary of the Interior under the
same terms and conditions applicable on the date of enactment.
Within 180 days of enactment, the Secretary shall provide the
State a full legal description of all preferential lease
parcels and nonpreferential lease parcels that may be conveyed
under this section.
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, not to
exceed 10 percent of the cost of each transaction conducted
under this Act.
COST AND BUDGETARY CONSIDERATIONS
The Congressional Budget Office cost estimate report had
not been received at the time the report was filed. When the
report becomes available, the Chairman will request that it be
printed in the Congressional Record for the advice of the
Senate.
REGULATORY IMPACT EVALUATION
In compliance with paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the Committee makes the following
evaluation of the regulatory impact which would be incurred in
carrying out S. 1028. The bill is not a regulatory measure in
the sense of imposing Government-established standards or
significant economic responsibilities on private individuals
and businesses.
No personal information would be collected in administering
the program. Therefore, there would be no impact on personal
privacy.
Little, if any, additional paperwork would result from the
enactment of S. 1028, as ordered reported.
EXECUTIVE COMMUNICATIONS
The pertinent legislative report received by the Committee
from the Department of the Interior setting forth Executive
agency recommendations relating to S. 1028 is set forth below:
U.S. Department of the Interior,
Office of the Secretary,
Washington, DC, August 8, 2002.
Hon. Jeff Bingaman,
Chairman, Committee on Energy and Natural Resources,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: This letter responds to your request for
the views of the Department of the Interior on S. 1028, the
``Blunt Reservoir and Pierre Canal Land Conveyance Act of
2001.'' This confirms testimony of Larry Todd, Director of
Operations for the U.S. Bureau of Reclamation, on November 27,
2001 before the Subcommittee on Forests and Public Lands
Management.
S. 1028 directs the Secretary of the Interior (Secretary)
to convey certain parcels of land acquired for the Blunt
Reservoir and Pierre Canal--features of the Oahe Irrigation
Project in South Dakota--to the Commission of Schools and
Public Lands of the State of South Dakota (Commission) for the
purpose of mitigating lost wildlife habitat, on the condition
that current preferential leaseholders (the original owners of
the acquired lands or their descendants) have the option to
purchase the parcels from the Commission.
The basic concept of S. 1028, to allow original landowners
to regain title to lands that Reclamation purchased in
anticipation of a project that was never built, is
straightforward and equitable. Further, the sponsors of S. 1028
have addressed a number of the technical issues, related to
liability, land descriptions, and reimbursement of Federal
implementation costs, that were raised in the past. However,
the Department has concerns with the bill, in particular that
it fails to adequately protect taxpayers' interests, as it
directs Reclamation to convey the lands to the State without
any consideration of the initial taxpayer investment they
represent, and cannot support the bill in its current form.
Background
In preparation for building the Blunt Reservoir and the
Pierre Canal, Reclamation purchased approximately 19,200 acres
of land between 1972 and 1977. In many cases, Reclamation
leased the land back to the seller. Currently, Reclamation is
leasing some 13,000 acres of Blunt Reservoir lands to 19
preferential leaseholders and about 1,100 acres of Pierre Canal
lands to 29 preferential leaseholders. Although not reflected
in title documents, the sellers expected they would be able to
purchase their lands back if they were not needed for the
project.
Nearly three decades later, construction has not commenced
for the Blunt Reservoir, although some earth-moving has been
done for the Pierre Canal. Reclamation supports the conclusion
that it is unlikely this project will be built, and, therefore,
Reclamation no longer needs to hold title to the acquired
lands. Under S. 1028, Reclamation's interest in the more than
14,000 acres currently leased by preferential leaseholders (the
original landowners or their descendants) would be conveyed to
the South Dakota Commission of Schools and Public Lands, on
condition that the original landowners have the option to
purchase it back. If a preferential leaseholder declines to
purchase the land, the Commission is to convey the parcel to
the South Dakota Department of Game, Fish, and Parks for
wildlife habitat mitigation. Reclamation's interest in the
5,000 acres currently unleased or leased to other parties would
be conveyed to the State of South Dakota Department of Game,
Fish, and Parks to be used in mitigation of wildlife habitat
lost as a result of Pick-Sloan development.
Valuation and payment
S. 1028, as introduced, directs Reclamation to transfer
land holdings worth up to $4-$6 million to the South Dakota
State Commission of Schools and Public Lands without any
payment from the State. The Administration opposes such
transfers of significant Reclamation Project assets to non-
Federal entities without compensation. In general, such
transfers should be for fair market value of the property. S.
1028 would be subject to the Pay-As-You-Go requirements of the
Omnibus Budget Act of 1990.
We would like to express our appreciation for the work done
by the sponsors to address a number of technical issues that
have been raised in the past. We are aware that an amended bill
was presented to the Committee for mark up and we are
optimistic that our concerns are being met.
The Office of Management and Budget advises that there is
no objection to the presentation of this report from the
standpoint of the Administration's program.
Sincerely,
John W. Keys III,
Commissioner, Bureau of Reclamation.
CHANGES IN EXISTING LAW
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, the Committee notes that no
changes in existing law are made by the bill S. 1028, as
ordered reported.