S.F. 506 Section 1. Section 478.4, Code 2015, is amended to read as 1 follows: 2 478.4 Franchise —— hearing. 3 The utilities board shall consider the petition and any 4 objections filed to it in the manner provided. It shall 5 examine the proposed route or cause any engineer selected 6 by it to do so. If a hearing is held on the petition it may 7 hear testimony as may aid it in determining the propriety of 8 granting the franchise. It may grant the franchise in whole or 9 in part upon the terms, conditions, and restrictions, and with 10 the modifications as to location and route as may seem to it 11 just and proper. Before granting the franchise, the utilities 12 board shall make a finding that the proposed line or lines are 13 necessary to serve a public use and represents a reasonable 14 relationship to an overall plan of transmitting electricity in 15 the public interest. In addition, if the petitioner is not 16 a public utility, as defined in section 476.1, subsection 3, 17 paragraph “a” , section 476.1A, or section 476.1B, or an electric 18 transmission owner providing electric service directly to a 19 public utility or to consumers located in this state, before 20 granting the franchise the utilities board shall make a finding 21 that the proposed line or lines are recommended in the most 22 recent annual report prepared pursuant to section 473.15. A 23 franchise shall not become effective until the petitioners 24 shall pay, or file an agreement to pay, all costs and expenses 25 of the franchise proceeding, whether or not objections are 26 filed, including costs of inspections or examinations of the 27 route, hearing, salaries, publishing of notice, and any other 28 expenses reasonably attributable to it. The funds received 29 for the costs and the expenses of the franchise proceeding 30 shall be remitted to the treasurer of state for deposit in the 31 department of commerce revolving fund created in section 546.12 32 as provided in section 476.10 . 33 Sec. 2. Section 478.6, Code 2015, is amended by adding the 34 following new unnumbered paragraph: 35 -1- LSB 2646SV (3) 86 rn/sc 1/ 9

S.F. 506 NEW UNNUMBERED PARAGRAPH . If the petitioner is not a 1 public utility, as defined in section 476.1, subsection 3, 2 paragraph “a” , section 476.1A, or section 476.1B, or an electric 3 transmission owner providing electric service directly to a 4 public utility or to consumers located in this state, before 5 the petitioner is vested with the power of condemnation the 6 utilities board shall require the petitioner to obtain through 7 voluntary easements seventy-five percent or more of the 8 land needed for the construction, erection, maintenance, and 9 operation of the transmission lines, wires, and cables. 10 Sec. 3. Section 478.15, Code 2015, is amended by adding the 11 following new unnumbered paragraph: 12 NEW UNNUMBERED PARAGRAPH . If a person, company, or 13 corporation having secured a franchise as provided in this 14 chapter is vested with the right of eminent domain, and the 15 person, company, or corporation is not a public utility as 16 defined in section 476.1, subsection 3, paragraph “a” , section 17 476.1A, or section 476.1B, or an electric transmission owner 18 providing electric service directly to a public utility or 19 to consumers located in this state, the board may order the 20 person, company, or corporation to pay reasonable attorney fees 21 to ensure a private owner of land access to legal counsel. 22 Upon the conclusion of eminent domain proceedings, the person, 23 company, or corporation shall pay all costs of the assessment 24 made by the commissioners and reasonable attorney fees and 25 costs, including the reasonable cost of one appraisal, incurred 26 by the private owner of land if the award of the commissioners 27 or the court on appeal exceeds one hundred percent of the 28 final offer of the person, company, or corporation prior to 29 condemnation, notwithstanding section 6B.33 or any other 30 provision to the contrary. 31 Sec. 4. Section 478.33, Code 2015, is amended to read as 32 follows: 33 478.33 Cancellation —— complaint procedures . 34 1. A person seeking to acquire an easement or other property 35 -2- LSB 2646SV (3) 86 rn/sc 2/ 9

S.F. 506 interest for the construction, maintenance or operation of an 1 electric transmission line shall: 2 1. a. Allow the landowner or a person serving in a 3 fiduciary capacity in the landowner’s behalf to cancel any 4 agreement granting an easement or other interest by certified 5 mail with return requested to the company’s principal place 6 of business if received by the company within seven days, 7 excluding Saturday and Sunday, of the date of the contract 8 and inform the landowner or such fiduciary in writing of the 9 right to cancel prior to the signing of the agreement by the 10 landowner or such fiduciary. 11 2. b. Provide the landowner or a person serving in a 12 fiduciary capacity in the landowner’s behalf with a form in 13 duplicate for the notice of cancellation. 14 3. c. Not record any agreement until after the period for 15 cancellation has expired. 16 4. d. Not include in the agreement any waiver of the right 17 to cancel in accordance with this section . The landowner or 18 a person serving in a fiduciary capacity in the landowner’s 19 behalf may exercise the right of cancellation only once for 20 each transmission line project. 21 2. Any complaint that a petitioner that is not a public 22 utility, as defined in section 476.1, subsection 3, paragraph 23 “a” , section 476.1A, or section 476.1B, or an electric 24 transmission owner providing electric service directly to a 25 public utility or to consumers located in this state, has 26 violated this section shall be subject to the investigation 27 provisions of section 476.3, subsection 1. 28 Sec. 5. Section 479B.9, Code 2015, is amended to read as 29 follows: 30 479B.9 Final order —— condition. 31 The board may grant a permit in whole or in part upon 32 terms, conditions, and restrictions as to location and route 33 as it determines to be just and proper. A permit shall not be 34 granted to a pipeline company unless the board determines that 35 -3- LSB 2646SV (3) 86 rn/sc 3/ 9

S.F. 506 the proposed services will promote the public convenience and 1 necessity. In addition, if the pipeline company is seeking 2 a permit for a pipeline for crude oil, before granting the 3 franchise the board shall make a finding that the proposed 4 line or lines are recommended in the most recent annual report 5 prepared pursuant to section 473.15. 6 Sec. 6. Section 479B.13, Code 2015, is amended to read as 7 follows: 8 479B.13 Financial condition of permittee —— bond. 9 Before a permit is granted under this chapter the applicant 10 must satisfy the board that the applicant has property within 11 this state other than pipelines or underground storage 12 facilities, subject to execution of a value in excess of two 13 hundred fifty thousand dollars, or the applicant must file 14 and maintain with the board a surety bond in the penal sum of 15 two hundred fifty thousand dollars with surety approved by 16 the board, conditioned that the applicant will pay any and 17 all damages legally recovered against it growing out of the 18 construction, maintenance, or operation of its pipeline or 19 underground storage facilities in this state. If the applicant 20 is seeking a permit for a pipeline for crude oil, the value of 21 the property or amount of the surety bond shall be five hundred 22 thousand dollars or more for each county through which the 23 proposed pipeline would be built, as determined by the board. 24 When the pipeline company deposits with the board security 25 satisfactory to the board as a guaranty for the payment of the 26 damages, or furnishes to the board satisfactory proofs of its 27 solvency and financial ability to pay the damages, the pipeline 28 company is relieved of the provisions requiring bond. 29 Sec. 7. Section 479B.16, Code 2015, is amended to read as 30 follows: 31 479B.16 Eminent domain. 32 1. A pipeline company granted a pipeline permit shall 33 be vested with the right of eminent domain, to the extent 34 necessary and as prescribed and approved by the board, not 35 -4- LSB 2646SV (3) 86 rn/sc 4/ 9

S.F. 506 exceeding seventy-five feet in width for right-of-way and 1 not exceeding one acre in any one location in addition to 2 right-of-way for the location of pumps, pressure apparatus, 3 or other stations or equipment necessary to the proper 4 operation of its pipeline. The board may grant additional 5 eminent domain rights where the pipeline company has presented 6 sufficient evidence to adequately demonstrate that a greater 7 area is required for the proper construction, operation, and 8 maintenance of the pipeline or for the location of pumps, 9 pressure apparatus, or other stations or equipment necessary to 10 the proper operation of its pipeline. 11 2. A pipeline company granted a permit for underground 12 storage of hazardous liquid shall be vested with the right of 13 eminent domain to the extent necessary and as prescribed and 14 approved by the board in order to appropriate for its use for 15 the underground storage of hazardous liquid any subsurface 16 stratum or formation in any land which the board shall have 17 found to be suitable and in the public interest for the 18 underground storage of hazardous liquid, and may appropriate 19 other interests in property, as may be required adequately to 20 examine, prepare, maintain, and operate the underground storage 21 facilities. 22 3. If the pipeline company is seeking a permit for a 23 pipeline for crude oil, before the pipeline company shall be 24 vested with the power of condemnation the board shall require 25 the pipeline company to obtain through voluntary easements 26 seventy-five percent or more of the land needed for the 27 construction, operation, and maintenance of the pipeline and 28 stations or equipment for the proper operation of the pipeline. 29 4. If a pipeline company vested with the right of eminent 30 domain is constructing a pipeline for crude oil, the board may 31 order the pipeline company to pay reasonable attorney fees to 32 ensure a private owner of land access to legal counsel. Upon 33 the conclusion of eminent domain proceedings, the pipeline 34 company shall pay all costs of the assessment made by the 35 -5- LSB 2646SV (3) 86 rn/sc 5/ 9

S.F. 506 commissioners and reasonable attorney fees and costs, including 1 the reasonable cost of one appraisal, incurred by the private 2 owner of land if the award of the commissioners or the court on 3 appeal exceeds one hundred percent of the final offer of the 4 pipeline company prior to condemnation, notwithstanding section 5 6B.33 and section 479B.30, subsection 6, or any other provision 6 to the contrary. 7 5. This chapter does not authorize the construction of 8 a pipeline longitudinally on, over, or under any railroad 9 right-of-way or public highway, or at other than an approximate 10 right angle to a railroad track or public highway without 11 the consent of the railroad company, the state department of 12 transportation, or the county board of supervisors, and this 13 chapter does not authorize or give the right of condemnation or 14 eminent domain for such purposes. 15 Sec. 8. Section 479B.24, Code 2015, is amended to read as 16 follows: 17 479B.24 Cancellation —— complaint procedures . 18 1. A pipeline company seeking to acquire an easement or 19 other property interest for the construction, maintenance, or 20 operation of a pipeline or underground storage facility shall 21 do all of the following: 22 1. a. Allow the landowner or a person serving in a 23 fiduciary capacity on the landowner’s behalf to cancel an 24 agreement granting an easement or other interest by restricted 25 certified mail to the pipeline company’s principal place of 26 business if received by the pipeline company within seven days, 27 excluding Saturday and Sunday, of the date of the agreement 28 and inform the landowner or the fiduciary in writing of the 29 right to cancel prior to the signing of the agreement by the 30 landowner or the fiduciary. 31 2. b. Provide the landowner or a person serving in a 32 fiduciary capacity in the landowner’s behalf with a form in 33 duplicate for the notice of cancellation. 34 3. c. Not record an agreement until after the period for 35 -6- LSB 2646SV (3) 86 rn/sc 6/ 9

S.F. 506 cancellation has expired. 1 4. d. Not include in the agreement a waiver of the right 2 to cancel in accordance with this section . The landowner or 3 a person serving in a fiduciary capacity in the landowner’s 4 behalf may exercise the right of cancellation only once for 5 each pipeline project. 6 2. Any complaint that a pipeline company that is seeking a 7 permit for a pipeline for crude oil has violated this section 8 shall be subject to the investigation provisions of section 9 476.3, subsection 1. 10 Sec. 9. Section 479B.30, subsection 6, Code 2015, is amended 11 to read as follows: 12 6. The pipeline company shall pay all costs of the 13 assessment made by the commissioners and reasonable attorney 14 fees and costs incurred by the landowner as determined by the 15 commissioners if the award of the commissioners exceeds one 16 hundred ten percent of the final offer of the pipeline company 17 prior to the determination of damages ; if the award does not 18 exceed one hundred ten percent, the landowners shall pay the 19 fees and costs incurred by the pipeline company . The pipeline 20 company shall file with the sheriff an affidavit setting forth 21 the most recent offer made to the landowner. Commissioners 22 shall receive a per diem of fifty dollars and actual and 23 necessary expenses incurred in the performance of their 24 official duties. The pipeline company shall also pay all costs 25 occasioned by the appeal, including reasonable attorney fees 26 to be taxed by the court, unless on the trial of the appeal the 27 same or a lesser amount of damages is awarded than was allowed 28 by the commission from which the appeal was taken. 29 Sec. 10. EFFECTIVE UPON ENACTMENT. This Act, being deemed 30 of immediate importance, takes effect upon enactment. 31 Sec. 11. APPLICABILITY. 32 1. The sections of this Act amending sections 478.4, 478.6, 33 478.15, and 478.33 are applicable to petitions for franchise 34 filed on or after November 1, 2014, that have not been acted 35 -7- LSB 2646SV (3) 86 rn/sc 7/ 9

S.F. 506 upon by the utilities board on the effective date of this Act 1 and to petitions for franchise filed on or after the effective 2 date of this Act. 3 2. The sections of this Act amending sections 479B.9, 4 479B.13, 479B.16, 479B.24, and 479B.30 are applicable to 5 applications for permits filed on or after November 1, 2014, 6 that have not been acted upon by the utilities board on the 7 effective date of this Act and to applications for permits 8 filed on or after the effective date of this Act. 9 EXPLANATION 10 The inclusion of this explanation does not constitute agreement with 11 the explanation’s substance by the members of the general assembly. 12 This bill relates to the construction, erection, 13 maintenance, or operation of electric transmission lines and 14 hazardous liquid pipelines. 15 The bill primarily applies to petitioners for an electric 16 transmission franchise that are not a public utility as 17 defined in Code section 476.1 furnishing gas or electricity 18 to the public for compensation, a rural electric cooperative, 19 or a municipal utility, and to applicants for a permit to 20 construct a pipeline for crude oil. In both cases, in order 21 to obtain a franchise or a permit the Iowa utilities board 22 is required to make a finding that the proposed transmission 23 line or crude oil pipeline is recommended in the most recent 24 annual report prepared by the economic development authority 25 pursuant to Code section 473.15. That report assesses the 26 progress of state agencies in implementing energy management 27 improvements, alternative and renewable energy systems, and 28 life cycle cost analyses under Code chapter 470, and on the use 29 of renewable fuels. The report also provides an assessment of 30 the economic and environmental impact of the progress made by 31 state agencies related to energy management and alternative and 32 renewable energy, along with recommendations on technological 33 opportunities and policies necessary for continued improvement 34 in these areas. 35 -8- LSB 2646SV (3) 86 rn/sc 8/ 9

S.F. 506 The bill provides that in order to be granted eminent 1 domain authority (power of condemnation), an applicant for a 2 franchise (electric transmission lines) or permit (hazardous 3 liquid pipelines) must obtain through voluntary easements 75 4 percent or more of the land needed, and that if an applicant 5 is vested with the right of eminent domain, the board may 6 order the applicant to pay reasonable attorney fees to ensure 7 a private owner of land access to legal counsel, and upon 8 conclusion of the eminent domain proceedings to pay all costs 9 of the assessment, attorney fees and costs, and the cost of one 10 appraisal if the award exceeds 100 percent of the final offer 11 made by the applicant. 12 Further, in the event of a complaint that an applicant has 13 violated provisions permitting an owner of land to cancel any 14 agreement granting an easement or other interest, the applicant 15 will be subject to the investigation provisions in current law 16 that can lead to a formal proceeding by the Iowa utilities 17 board. 18 Additionally, with reference to an application for a permit 19 for a crude oil pipeline, the surety bond requirement is 20 increased from $250,000 to $500,000. 21 Finally, with reference to any applicant under Code 22 chapter 479B (hazardous liquid pipelines), the bill deletes a 23 requirement that a landowner shall pay commissioner assessment 24 costs and reasonable attorney fees and other costs in a 25 proceeding in response to a petition for the determination of 26 construction damages if costs awarded to the landowner do not 27 exceed 110 percent. 28 The bill takes effect upon enactment and is retroactively 29 applicable to November 1, 2014, for petitions for franchise 30 under Code chapter 478 and applications for permits under 31 Code chapter 479B that have not been acted upon by the Iowa 32 utilities board on the effective date of the bill and to 33 petitions and permits filed on or after the bill’s effective 34 date. 35 -9- LSB 2646SV (3) 86 rn/sc 9/ 9