Central South Dakota Water Supply System Act of 1985

Central South Dakota Water Supply System Act of 1985 - Authorizes the Secretary of the Interior to construct, operate, and maintain in two stages the Central South Dakota Water Supply System (CENDAK unit) of the Pick-Sloan Missouri basin program to provide irrigation water to 474,000 acres of land in South Dakota. Describes stage one as the Oahe pumping plant and its canal system (to irrigate approximately 300,000 acres), and stage two as the Lake Oahe pumping plant and canal system (to irrigate about 174,000 acres). Requires the Secretary to certify the irrigability of stage two lands prior to construction, or to complete necessary stage two features if construction of certain facilities is undertaken by non-Federal entities, subject to State requirements. States that the project will include measures to mitigate for project-caused impacts on wildlife habitat and water quality.

Requires the CENDAK unit to be integrated physically and financially with other Federal works constructed under a plan approved by the Flood Control Act.

Directs that facilities constructed and acquired for use in the previous Oahe water supply unit shall be salvaged and utilized and included in the CENDAK unit costs as far as is feasible. Authorizes the Secretary to sell, exchange, or otherwise dispose of lands acquired for the previous Oahe unit in order to develop and maintain the CENDAK unit, provided that the Secretary reconvey to former landowners at no less than market value any lands deemed unsuitable for the CENDAK unit.

Directs the Secretary to make appropriate allocations of project costs to irrigation, municipal and industrial water supply, fish and wildlife, and recreation. Prohibits private lands from being acquired for mitigation purposes until optimum utilization for fish and wildlife has been made of Federal and State lands in South Dakota.

Directs the Secretary to contract with electric power cooperatives to secure power supplies for the CENDAK unit.

Provides that repayment and water service contracts for the return of construction costs allocated to irrigation shall require that, as a prerequisite to water service, water users enter into agreements to: (1) participate in an irrigation management system; (2) participate in a program to provide habitat replacement for losses resulting from irrigation; and (3) establish and implement a program for mitigation of any net losses of wildlife due to the use of grassland for irrigated crops.

Determines interest rates for the unpaid balance of capital costs of the CENDAK unit. Authorizes the Secretary to transfer to water users' organization(s) the care, operation, and maintenance of the works herein authorized.

Authorizes appropriations.