S.F. _____ Section 1. Section 478.3, subsection 3, Code 2015, is 1 amended to read as follows: 2 3. a. For the purpose of this section chapter , the term 3 “public” when used in relation to public interest, public use, 4 or needs of the public shall not be interpreted to refer to and 5 be limited to consumers located in this state. 6 b. Paragraph “a” shall not apply to a transmission line, 7 wire, or cable that is capable of operating at an electric 8 voltage of thirty-four and one-half kilovolts or greater 9 and that primarily provides electricity through alternating 10 current and is used by rate-regulated electric utilities, 11 municipal electric utilities, rural electric cooperatives, or 12 electric transmission owners to provide electric service to the 13 aforementioned utilities or to the public for compensation. 14 Sec. 2. Section 478.4, Code 2015, is amended to read as 15 follows: 16 478.4 Franchise —— hearing. 17 1. The utilities board shall consider the petition and 18 any objections filed to it in the manner provided. It shall 19 examine the proposed route or cause any engineer selected 20 by it to do so. If a hearing is held on the petition it may 21 hear testimony as may aid it in determining the propriety of 22 granting the franchise. It may grant the franchise in whole or 23 in part upon the terms, conditions, and restrictions, and with 24 the modifications as to location and route as may seem to it 25 just and proper. Before granting the franchise, the utilities 26 board shall make a finding that the proposed line or lines are 27 necessary to serve a public use and represents a reasonable 28 relationship to an overall plan of transmitting electricity in 29 the public interest. A franchise shall not become effective 30 until the petitioners shall pay, or file an agreement to pay, 31 all costs and expenses of the franchise proceeding, whether 32 or not objections are filed, including costs of inspections 33 or examinations of the route, hearing, salaries, publishing 34 of notice, and any other expenses reasonably attributable to 35 -1- LSB 2646XC (5) 86 rn/sc 1/ 6

S.F. _____ it. The funds received for the costs and the expenses of the 1 franchise proceeding shall be remitted to the treasurer of 2 state for deposit in the department of commerce revolving fund 3 created in section 546.12 as provided in section 476.10 . 4 2. a. A finding of public use and public interest shall 5 not be made in regard to a petition for a franchise if the 6 petition sets forth that the exercise of the right of eminent 7 domain will be used and if the petition primarily involves 8 construction of a high-voltage direct current line and 9 the petition does not provide for the erection of electric 10 substations at intervals of less than fifty miles, which is 11 necessary to accommodate both the purchase and sale to persons 12 located in this state of electricity generated or transmitted 13 by the franchisee. 14 b. Paragraph “a” shall not apply to a transmission line, 15 wire, or cable that is capable of operating at an electric 16 voltage of thirty-four and one-half kilovolts or greater 17 and that primarily provides electricity through alternating 18 current and is used by rate-regulated electric utilities, 19 municipal electric utilities, rural electric cooperatives, or 20 electric transmission owners to provide electric service to the 21 aforementioned utilities or to the public for compensation. 22 Sec. 3. NEW SECTION . 478.34 Severability. 23 If any provision of this chapter or its application to any 24 person or circumstance is held invalid or otherwise rendered 25 ineffective by any entity, the invalidity or ineffectiveness 26 shall not affect other provisions or applications of this 27 chapter that can be given effect without the invalid or 28 ineffective provision or application, and to this end the 29 provisions of this chapter are severable. 30 Sec. 4. Section 479B.1, Code 2015, is amended to read as 31 follows: 32 479B.1 Purpose —— authority. 33 It is the purpose of the general assembly in enacting this 34 law to grant the utilities board the authority to implement 35 -2- LSB 2646XC (5) 86 rn/sc 2/ 6

S.F. _____ certain controls over hazardous liquid pipelines to protect 1 landowners and tenants from environmental or economic 2 damages which may result from the construction, operation, 3 or maintenance of a hazardous liquid pipeline or underground 4 storage facility within the state, to approve the location and 5 route of hazardous liquid pipelines, and to grant rights of 6 eminent domain where necessary unless the grant of such rights 7 is specifically prohibited . 8 Sec. 5. Section 479B.2, Code 2015, is amended by adding the 9 following new subsections: 10 NEW SUBSECTION . 2A. “Major oil pipeline” means a pipeline 11 that is larger than twelve inches in inside diameter. 12 NEW SUBSECTION . 2B. “Major oil pipeline company” means 13 a person engaged in or organized for the purpose of owning, 14 operating, or controlling major oil pipelines for the 15 transportation or transmission of any hazardous liquid. 16 Sec. 6. Section 479B.16, Code 2015, is amended to read as 17 follows: 18 479B.16 Eminent domain. 19 1. A pipeline company granted a pipeline permit shall 20 be vested with the right of eminent domain, to the extent 21 necessary and as prescribed and approved by the board, not 22 exceeding seventy-five feet in width for right-of-way and 23 not exceeding one acre in any one location in addition to 24 right-of-way for the location of pumps, pressure apparatus, 25 or other stations or equipment necessary to the proper 26 operation of its pipeline. The board may grant additional 27 eminent domain rights where the pipeline company has presented 28 sufficient evidence to adequately demonstrate that a greater 29 area is required for the proper construction, operation, and 30 maintenance of the pipeline or for the location of pumps, 31 pressure apparatus, or other stations or equipment necessary to 32 the proper operation of its pipeline. 33 2. A pipeline company granted a permit for underground 34 storage of hazardous liquid shall be vested with the right of 35 -3- LSB 2646XC (5) 86 rn/sc 3/ 6

S.F. _____ eminent domain to the extent necessary and as prescribed and 1 approved by the board in order to appropriate for its use for 2 the underground storage of hazardous liquid any subsurface 3 stratum or formation in any land which the board shall have 4 found to be suitable and in the public interest for the 5 underground storage of hazardous liquid, and may appropriate 6 other interests in property, as may be required adequately to 7 examine, prepare, maintain, and operate the underground storage 8 facilities. 9 3. This chapter does not authorize the construction of 10 a pipeline longitudinally on, over, or under any railroad 11 right-of-way or public highway, or at other than an approximate 12 right angle to a railroad track or public highway without 13 the consent of the railroad company, the state department of 14 transportation, or the county board of supervisors, and this 15 chapter does not authorize or give the right of condemnation or 16 eminent domain for such purposes. 17 4. A major oil pipeline company as defined in section 479B.2 18 that has not received a permit under this chapter on or before 19 January 12, 2015, shall not be granted, or otherwise vested 20 with, the right of eminent domain. 21 Sec. 7. EFFECTIVE UPON ENACTMENT. This Act, being deemed of 22 immediate importance, takes effect upon enactment. 23 Sec. 8. APPLICABILITY. The sections of this Act amending 24 sections 478.3 and 478.4 are applicable to petitions for 25 franchise filed on or after November 1, 2014, that have not 26 been acted upon by the board on the effective date of this Act 27 and to petitions for franchise filed on or after the effective 28 date of this Act. 29 EXPLANATION 30 The inclusion of this explanation does not constitute agreement with 31 the explanation’s substance by the members of the general assembly. 32 This bill relates to the construction, erection, 33 maintenance, or operation of electric transmission lines and 34 hazardous liquid pipelines. 35 -4- LSB 2646XC (5) 86 rn/sc 4/ 6

S.F. _____ In determining whether to grant a petition for a franchise to 1 construct, erect, maintain, or operate an electric transmission 2 line, the Iowa utilities board is required to find that, among 3 other requirements, the proposed line or lines are necessary 4 to serve a public use and represent a reasonable relationship 5 to an overall plan of transmitting electricity in the public 6 interest. The bill provides that a finding of public use and 7 public interest shall not be made in the event a petition for 8 a franchise primarily involves construction of a high-voltage 9 direct current line and the petition does not provide for the 10 erection of electric substations at intervals of less than 50 11 miles, which is necessary to accommodate both the purchase and 12 sale to persons located in Iowa of electricity generated or 13 transmitted by the franchisee. 14 Additionally, current Code section 478.3, specifying 15 franchise petition requirements, provides that for the 16 purposes of that Code section, the term “public” shall not be 17 interpreted to be limited to consumers located in Iowa. The 18 bill modifies this provision to instead specify that the term 19 “public” as used in Code chapter 478 in reference to public 20 use, interest, and needs shall refer to and be limited to 21 consumers located in this state. 22 With reference to both the restriction against a finding 23 of public use and public interest for the high-voltage 24 direct current line and the limitation of the term “public” 25 to consumers located in Iowa, the bill provides that these 26 provisions shall not apply to a transmission line, wire, or 27 cable that is capable of operating at an electric voltage 28 of 34 and one-half kilovolts or greater that primarily 29 provides electricity through alternating current and is 30 used by rate-regulated electric utilities, municipal 31 electric utilities, rural electric cooperatives, or electric 32 transmission owners to provide electric service to the 33 aforementioned utilities or to the public for compensation. 34 Further, the bill provides that if any provision of Code 35 -5- LSB 2646XC (5) 86 rn/sc 5/ 6

S.F. _____ chapter 478 or its application to any person or circumstance is 1 held invalid or otherwise rendered ineffective by any entity, 2 the invalidity or ineffectiveness shall not affect other 3 provisions or applications of the Code chapter that can be 4 given effect without the invalid or ineffective provision or 5 application, and to this end the provisions of the Code chapter 6 are severable. 7 With relation to hazardous liquid pipelines, the bill adds 8 two new definitions to Code section 479B.2. The bill defines 9 a “major oil pipeline” to mean a pipeline that is larger than 10 12 inches in inside diameter. The bill defines a “major oil 11 pipeline company” to mean a person engaged in or organized 12 for the purpose of owning, operating, or controlling major 13 oil pipelines for the transportation or transmission of any 14 hazardous liquid. The bill provides that a major oil pipeline 15 company that has not received a permit under Code chapter 479B 16 to construct, maintain, or operate a major oil pipeline on or 17 before January 12, 2015, shall not be granted, or otherwise 18 vested with, the right of eminent domain. 19 The bill takes effect upon enactment. The provisions of 20 the bill relating to petitions for a franchise to construct, 21 erect, maintain, or operate an electric transmission line 22 apply to petitions for franchise filed on or after November 1, 23 2014, that have not been acted upon by the board on the bill’s 24 effective date and to petitions for franchise filed on or after 25 that date. 26 -6- LSB 2646XC (5) 86 rn/sc 6/ 6