House Study Bill 184 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON GOVERNMENT OVERSIGHT BILL BY CHAIRPERSON KAUFMANN) A BILL FOR An Act requiring the approval of the general assembly of 1 certain petitions for franchise involving a request for the 2 right to exercise eminent domain, and including effective 3 date and retroactive applicability provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 2048YC (1) 86 rn/sc

H.F. _____ Section 1. Section 478.1, Code 2015, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 1A. A person seeking approval for a 3 franchise or extension of a franchise for a project described 4 in section 478.6A, subsection 1, must receive approval of the 5 general assembly as provided in section 478.6A. 6 Sec. 2. Section 478.2, subsection 3, paragraph b, 7 subparagraph (7), Code 2015, is amended to read as follows: 8 (7) A description of the process used by the utilities board 9 in making a decision on whether to approve a franchise or grant 10 the right to take property by eminent domain and, if applicable 11 to the project, a description of the process under section 12 478.6A for making the decision on whether to grant the right to 13 take property by eminent domain . 14 Sec. 3. Section 478.3, subsection 1, Code 2015, is amended 15 by adding the following new paragraph: 16 NEW PARAGRAPH . 0h. If the exercise of the right of 17 eminent domain is to be used, the number of miles to be 18 constructed and, if the construction involves the extension of 19 an existing line, the number of miles in length of the existing 20 transmission line. 21 Sec. 4. Section 478.3, subsection 2, paragraph b, Code 2015, 22 is amended to read as follows: 23 b. The utilities board may waive the proof required for 24 such allegations which are not applicable to a particular 25 proposed project. If the petition is subject to section 478.1, 26 subsection 1A, the utilities board shall submit reasons in 27 writing for any waiver granted pursuant to this paragraph “b” to 28 the general assembly, as provided in section 478.6A. 29 Sec. 5. Section 478.4, Code 2015, is amended to read as 30 follows: 31 478.4 Franchise —— hearing. 32 1. The utilities board shall consider the petition and 33 any objections filed to it in the manner provided. It shall 34 examine the proposed route or cause any engineer selected 35 -1- LSB 2048YC (1) 86 rn/sc 1/ 6

H.F. _____ by it to do so. If a hearing is held on the petition it may 1 hear testimony as may aid it in determining the propriety 2 of granting the franchise. It If the petition is subject 3 to section 478.1, subsection 1A, the testimony shall be 4 transcribed and submitted to the general assembly, as provided 5 in section 478.6A. Except as otherwise provided in subsection 6 2, the utilities board may grant the franchise in whole or in 7 part upon the terms, conditions, and restrictions, and with 8 the modifications as to location and route as may seem to it 9 just and proper. Before granting the franchise, the utilities 10 board shall make a finding that the proposed line or lines are 11 necessary to serve a public use and represents a reasonable 12 relationship to an overall plan of transmitting electricity in 13 the public interest. 14 2. If the petition is subject to section 478.1, subsection 15 1A, the utilities board may grant the franchise in part, 16 pursuant to subsection 1, and subject to the general assembly 17 granting the right to exercise eminent domain, as provided in 18 section 478.6A. 19 3. A franchise shall not become effective until the 20 petitioners shall pay, or file an agreement to pay, all 21 costs and expenses of the franchise proceeding, whether or 22 not objections are filed, including costs of inspections or 23 examinations of the route, hearing, salaries, publishing of 24 notice, and any other expenses reasonably attributable to 25 it. The funds received for the costs and the expenses of the 26 franchise proceeding shall be remitted to the treasurer of 27 state for deposit in the department of commerce revolving fund 28 created in section 546.12 as provided in section 476.10 . 29 Sec. 6. Section 478.5, Code 2015, is amended to read as 30 follows: 31 478.5 Notice —— objections filed. 32 Upon the filing of such petition, including a petition 33 subject to section 478.1, subsection 1A, the utilities board 34 shall cause a notice, addressed to the citizens of each county 35 -2- LSB 2048YC (1) 86 rn/sc 2/ 6

H.F. _____ through which the proposed line or lines will extend, to be 1 published in a newspaper located in each such county for 2 two consecutive weeks. Said notice shall contain a general 3 statement of the contents and purpose of the petition, a 4 general description of the lands and highways to be traversed 5 by the proposed line or lines, and shall state that any 6 objections thereto must be filed in writing with the board not 7 later than twenty days after the date of last publication of 8 the notice. Any person, company, city or corporation whose 9 rights may be affected, shall have the right to file written 10 objections to the proposed improvement or to the granting of 11 such franchise; such objections shall be filed with the board 12 not later than twenty days after the date of last publication 13 and shall state the grounds therefor. The board may allow 14 objections to be filed later in which event the applicant must 15 be given reasonable time to meet such late objections. 16 Sec. 7. Section 478.6, Code 2015, is amended to read as 17 follows: 18 478.6 Taking under eminent domain. 19 1. a. Upon the filing of objections or when a petition 20 involves the taking of property under the right of eminent 21 domain, including a petition subject to section 478.1, 22 subsection 1A, the utilities board shall set the matter 23 for hearing and fix a time and place for the hearing. The 24 hearing shall be not less than thirty days from the date of 25 last publication and, where a new proposed transmission line 26 exceeds one mile in length, shall be held in the county seat 27 of the county located at the midpoint of the proposed electric 28 transmission line. Written notice of the time and place of the 29 hearing shall be served by the board, by ordinary mail, on the 30 applicant, and those having filed objections. If no objections 31 are filed and the petition does not involve the taking of 32 property under the right of eminent domain, the board may grant 33 a franchise without a hearing; however, the board may conduct a 34 hearing if the board deems it necessary. 35 -3- LSB 2048YC (1) 86 rn/sc 3/ 6

H.F. _____ b. Where a petition seeks the use of the right of eminent 1 domain over specific parcels of real property, the board shall 2 prescribe the notice to be served upon the owners of record and 3 parties in possession of the property over which the use of the 4 right of eminent domain is sought. The notice shall include 5 the statement of individual rights required pursuant to section 6 6B.2A, subsection 1 . 7 2. When the board grants a franchise to any person, company, 8 or corporation for the construction, erection, maintenance, 9 and operation of transmission lines, wires, and cables for 10 the transmission of electricity, such person, company, or 11 corporation shall be vested with the power of condemnation 12 to such extent as the board , or the general assembly if the 13 petition is subject to section 478.1, subsection 1A, may 14 approve and find necessary for public use. 15 Sec. 8. NEW SECTION . 478.6A Taking under eminent domain —— 16 legislative approval. 17 1. If the proposed project for which a petition is filed 18 under section 478.3 involves a proposal to construct an 19 electric transmission line exceeding three hundred miles in 20 length or to construct an extension of an existing line that 21 would result in the total length of the line exceeding three 22 hundred miles, and the petition indicates that the right to 23 exercise eminent domain will be used, the utilities board shall 24 determine whether the exercise of eminent domain involves the 25 taking of twenty percent or more of the property necessary for 26 the construction of the proposed transmission line project. If 27 the utilities board so finds, the authority of the utilities 28 board under this chapter in providing notice, conducting a 29 hearing, and granting a franchise shall be confined to all 30 aspects of the petition other than the granting of the exercise 31 of the right of eminent domain. 32 2. Granting of the power of eminent domain for petitions 33 described in subsection 1 shall be subject to the approval of a 34 constitutional majority of each house of the general assembly 35 -4- LSB 2048YC (1) 86 rn/sc 4/ 6

H.F. _____ during a regular or special session of the general assembly, 1 after having been introduced and referred to the senate 2 and house standing committees on commerce as a concurrent 3 resolution of necessity finding a public use to be served by 4 the project. If such approval is obtained, a request for the 5 right to exercise eminent domain shall be deemed to be granted 6 by the utilities board. 7 3. If granting of the power of eminent domain is approved 8 by a constitutional majority of each house of the general 9 assembly, the utilities board shall issue the franchise in 10 the manner of section 478.7, and such franchise shall be 11 subject to regulations and restrictions as the general assembly 12 prescribes, and to rules, not inconsistent with statutes, as 13 the board may establish. 14 Sec. 9. Section 478.13, Code 2015, is amended by adding the 15 following new subsection: 16 NEW SUBSECTION . 6. If a petition for an extension of a 17 franchise includes a project as described in section 478.6A, 18 subsection 1, the petition shall be subject to the provisions 19 of section 478.6A. 20 Sec. 10. EFFECTIVE UPON ENACTMENT. This Act, being deemed 21 of immediate importance, takes effect upon enactment. 22 Sec. 11. RETROACTIVE APPLICABILITY. This Act applies 23 retroactively to November 1, 2014, for petitions for a 24 franchise under chapter 478 received by the board on or after 25 that date. 26 EXPLANATION 27 The inclusion of this explanation does not constitute agreement with 28 the explanation’s substance by the members of the general assembly. 29 This bill requires the approval of the general assembly of 30 certain petitions for franchise involving a request for the 31 right to exercise eminent domain. 32 Currently, Code chapter 478 contains general notice and 33 hearing provisions regarding petitions to erect, maintain, 34 and operate electric transmission lines for the transmission, 35 -5- LSB 2048YC (1) 86 rn/sc 5/ 6

H.F. _____ distribution, or sale of electric current, including petitions 1 involving a request for the granting of the right to take 2 property by eminent domain. The Iowa utilities board is 3 authorized to grant a petition involving the right to exercise 4 eminent domain to such extent that the board may approve and 5 find necessary for public use. 6 The bill restricts utilities board authority to aspects of a 7 petition for a franchise other than approval of the right to 8 exercise eminent domain if the petition involves a proposal to 9 construct an electric transmission line exceeding 300 miles 10 in length, or to extend an existing line that would result 11 in total length of the line exceeding 300 miles, and involves 12 the taking of 20 percent or more of the property necessary 13 for the construction of the transmission line under the right 14 of eminent domain. Instead, the bill provides that granting 15 of the right to exercise eminent domain for such petitions 16 shall be subject to the approval of a constitutional majority 17 of both houses of the general assembly during a regular or 18 special session of a general assembly, after introduction and 19 referral to the standing committees on commerce as a concurrent 20 resolution. If such approval is obtained, the bill provides 21 that a request for the power of eminent domain shall be deemed 22 to be granted by the board. The bill provides that these 23 provisions also apply to petitions for an extension of a 24 franchise. 25 The bill makes corresponding changes to specified provisions 26 in Code chapter 478. The bill takes effect upon enactment and 27 applies retroactively to petitions for a franchise received by 28 the board on or after November 1, 2014. 29 -6- LSB 2048YC (1) 86 rn/sc 6/ 6