[Congressional Record Volume 144, Number 138 (Tuesday, October 6, 1998)]
[Senate]
[Pages S11582-S11583]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DASCHLE:
  S. 2555. A bill to deauthorize the Blunt Reservoir feature of the 
Oahe Irrigation Project, South Dakota, and direct the Secretary of the 
Interior to convey certain parcels of land acquired for the reservoir 
to the Commission of Schools and Public Lands of the State of South 
Dakota, on the condition that the current preferential leaseholders 
shall have an option to purchase the parcels from the Commission; to 
the Committee on Energy and Natural Resources.


                 the blunt reservoir land transfer act

  Mr. DASCHLE. Mr. President, today, I am introducing legislation to 
restore to the original owners and operators, the Blunt Reservoir lands 
in Sully County, South Dakota. The time has come for Congress finally 
to return these lands to those who owned them and worked them before 
they were acquired for the Oahe project. It is clear the lands will 
never be used for their intended purpose and it makes no sense for the 
Bureau of Reclamation to continue to manage them with the expectation 
that someday this project ever will be constructed.
  The history of this project has been one of contention and debate 
within South Dakota and the federal government. One of the promises 
made to South Dakota when the Pick-Sloan dams were authorized was that 
we would be compensated for hosting the dams with the development of 
abundant irrigation. The centerpiece of that promise was the Oahe 
Irrigation project, which was to have expanded the agricultural 
potential of central South Dakota. In anticipation of constructing the 
Oahe Irrigation project, the Bureau of Reclamation acquired about 
25,000 acres of land in Sully County to be used as a reservoir to store 
water for the irrigation project and for a canal from Pierre to carry 
the water. Despite taking this initial step, the project became very 
controversial and, as a result, has never been built. Consequently, 
instead of constructing the Blunt Reservoir feature of the project, the 
Bureau of Reclamation has leased these lands to the original owners and 
operators on a preferential basis and to others on a non-preferential 
basis, while waiting to see if Congress and the Administration would 
ever provide the funding necessary to build the project.
  What has become clear during that time is that the Blunt Reservoir 
feature of the Oahe project never will be completed. It is senseless to 
continue to ask the Bureau of Reclamation to manage these lands. We 
should recognize this fact and take the steps necessary to return the 
lands to the county tax rolls by restoring them to their former owners 
and operators.
  Those who have sacrificed their lands to this ill-fated project 
should no longer be forced to live with the uncertainty of wondering if 
they will be forever renting the lands they once owned. One farmer 
whose family owned Blunt Reservoir land for four generations recently 
visited me in Washington and told me that under their current 
circumstances there is little incentive to invest in improving the 
land. Without the security of ownership, farmers feel more like hired 
hands than permanent stewards. At times like these, when the very act 
of

[[Page S11583]]

farming is a precarious pursuit, we should pursue every means of 
providing stability to our producers.
  That is why today I am introducing legislation to deauthorize the 
Blunt Reservoir feature of the Oahe Irrigation Project in South Dakota, 
and to transfer to the South Dakota School and Public Lands Commission 
the preferentially-leased lands. The Commission, in turn, will be 
required to offer the lands for sale to the original landowners or 
operators, or their heirs. The legislation also will transfer to the 
South Dakota Game, Fish and Parks Department the lands associated with 
this project that are currently leased on a non-preferential basis. The 
Department will use the lands to help mitigate the wildlife habitat 
that was inundated by the Pick-Sloan project.
  Under my legislation, the preferential lessees will be able to 
purchase the Blunt Reservoir lands they currently are leasing for cash, 
at a 10% discount from the assessed value, or for a contract-for-deed 
at the full assessed value. The land also could be purchased with a 
contract-for-deed if the purchaser makes a down payment of 20% of the 
value of the land, and pays the balance over 30 years at 3% interest 
per year. Existing preferential lessees would have 10 years from the 
date of enactment to decide to purchase the lands, during which time 
they could continue to lease the lands from the School and Public Lands 
Commission at the current lease rates. Money gained from the sale of 
these lands by the School and Public Lands Commission will support 
education in South Dakota, which has been adversely affected by the 
replacement of property tax revenue with the perennially inadequate 
federal payments-in-lieu-of-taxes for these lands and for the Pick-
Sloan project lands. It is my hope that in the near future, similar 
legislation can be developed for the lessees using the Pierre Canal 
lands that addresses their objectives to purchase the land and the 
objectives of those who hope to maintain the option of someday 
developing an irrigation project for the area.
  Thank you, Mr. President, for the opportunity to present this 
legislation to the Senate. I urge my colleagues to join me in 
supporting its enactment. I ask unanimous consent that the full text of 
the bill appear in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2555

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. DEAUTHORIZATION OF THE BLUNT RESERVOIR FEATURE OF 
                   THE OAHE IRRIGATION PROJECT, SOUTH DAKOTA; 
                   CONVEYANCE.

       (a) Definitions.--In this section:
       (1) Blunt reservoir feature.--The term ``Blunt Reservoir 
     feature'' means the Blunt Reservoir feature of the Oahe 
     Irrigation Project authorized by section 9 of the Act of 
     December 22, 1944 (58 Stat. 891, chapter 665), 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 of South 
     Dakota.
       (3) Preferential leaseholder.--The term ``preferential 
     leaseholder'' means a leaseholder of a parcel of land who 
     is--
       (A) the person from whom the Secretary purchased the parcel 
     for use in connection with the Blunt Reservoir feature;
       (B) the original operator of the parcel at the time of 
     acquisition; or
       (C) a descendant of a person described in subparagraph (A) 
     or (B).
       (4) 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; and
       (B) is under lease to a preferential leaseholder as of the 
     date of enactment of this Act.
       (5) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior, acting through the Commissioner of 
     Reclamation.
       (b) Deauthorization.--The Blunt Reservoir feature is 
     deauthorized.
       (c) Conveyance.--The Secretary shall convey all of the 
     preferential lease parcels to the Commission, without 
     consideration, on the condition that the Commission honor the 
     purchase option provided to preferential leaseholders under 
     subsection (d).
       (d) Purchase Option.--
       (1) In general.--A preferential leaseholder shall have an 
     option to purchase from the Commission the preferential lease 
     parcel that is the subject of the lease.
       (2) Terms.--A preferential leaseholder may elect to 
     purchase a parcel on 1 of the following terms:
       (A) Cash purchase for the amount that is equal to--
       (i) the value of the parcel determined under paragraph (4); 
     minus
       (ii) 10 percent of that value.
       (B) Installment purchase, with 20 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 30 years 
     at 3 percent annual interest.
       (3) Option exercise period.--
       (A) In general.--A preferential leaseholder shall have 
     until the date that is 10 years after the date of the 
     conveyance under subsection (c) 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 Commission, under the 
     same terms and conditions as under the lease as in effect as 
     of the date of conveyance, the parcel leased by the 
     preferential leaseholder.
       (4) Valuation.--
       (A) In general.--The value of a preferential lease parcel 
     shall be determined to be, at the election of the 
     preferential leaseholder--
       (i) the amount that is equal to 110 percent of the amount 
     that is equal to--

       (I) the number of acres of the preferential lease parcel; 
     multiplied by
       (II) the amount of the per-acre assessment of adjacent 
     parcels made by the Director of Equalization of the county in 
     which the preferential lease parcel is situated; or

       (ii) the amount of a valuation of the preferential lease 
     parcel for agricultural use made by an independent appraiser.
       (B) Cost of appraisal.--If a preferential leaseholder 
     elects to use the method of valuation described in 
     subparagraph (A)(ii), the cost of the valuation shall be paid 
     by the preferential leaseholder.
       (e) Conveyance of Nonpreferentially Leased Parcels.--The 
     Secretary shall convey to the South Dakota Department of 
     Game, Fish, and Parks the Blunt Reservoir parcels that are 
     leased on a nonpreferential basis. These lands 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.
                                 ______