SF 2067 (LSB 5117XS (15) 91)

SENATE FILE 2067

BY  KLIMESH

A BILL FOR

An Act relating to easements for hazardous liquid pipelines, including negotiation requirements, eminent domain authorization, and contract execution, and including effective date, applicability, and retroactive applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  479B.1A  Legislative intent.
   It is the goal of the general assembly that the right of eminent domain will not be granted for a hazardous liquid pipeline except when every other reasonably available alternative has been diligently exhausted. Further goals of the general assembly are to promote the production of energy, derived from crops grown and resources gathered within the state of Iowa, and elsewhere within the United States, to ensure long-term, economically competitive and diverse sources of energy for Iowans, for citizens of the United States, and for our customers abroad; to support agriculture in the state of Iowa, and the employment of Iowans in agricultural work and in affiliated industries; to encourage investment in Iowa agriculture, and in the facilities needed to process our produce and to deliver useful products to consumers; to provide reasonable conditions for the planning and construction of linear infrastructure projects that will serve the public convenience and necessity; and to vindicate and safeguard the property rights of all Iowans, including those who prefer not to accommodate the construction of a pipeline on their land, as well as those who would choose to convey an easement for valuable consideration in a voluntary transaction.
    Sec. 2.  Section 479B.2, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  6.  “Voluntary easement corridor” means land within the county where an informational meeting is held or within a distance of five miles on either side of a proposed pipeline route.
    Sec. 3.  Section 479B.4, subsections 5 and 6, Code 2026, are amended to read as follows:
   5.  a.  The notice shall set forth include the following:   
   (1)  The name of the applicant. 
   (2)  The applicant’s principal place of business. 
   (3)  The general description and purpose of the proposed project. 
   (4)  The general nature of the right-of-way desired. 
   (5)  A map showing the route or location of the proposed project. 
   (6)  That A statement that the landowner has a right to be present at the meeting and to file objections with the commission. 
   (7)  A designation of the time and place of the meeting.
   (8)  A copy of the template easement to be used for acquiring land for the project.
   (9)  A description of the methodology to be used in determining the value of the easement for initial offers.
   (10)  A statement of the policy for claiming damages.
   b.  The notice shall be served by certified mail with return receipt requested not less than thirty days previous to the time set for the meeting, and shall be published once in a newspaper of general circulation in the county. The publication shall be considered notice to landowners whose residence is not known and to each person in possession of or residing on the property provided a good faith effort to notify can be demonstrated by the pipeline company.
   6.  A pipeline company seeking rights under this chapter shall not negotiate or purchase an easement or other interest in land in a county known to be affected by the proposed project prior to the informational meeting.  Nothing in this subsection shall prohibit a company seeking rights under this chapter from holding a meeting to provide general information regarding a project to a community that does not include negotiating specific terms with specific landowners prior to the informational meeting required by this section.
    Sec. 4.  Section 479B.4, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  7.  Any person may file with the commission comments regarding the terms of the template easement or valuation methodology within fifteen days after it is filed under subsection 5. The company may file responses to such comments within thirty days after its filings pursuant to subsection 5. The commission shall issue an order accepting, rejecting, or requiring modification of the template easement and valuation methodology no more than sixty days after they are filed. This process shall not delay either the informational meetings or the company’s ability to negotiate with landowners, but no easement shall be finalized before the template easement is approved.
    Sec. 5.  Section 479B.16, Code 2026, is amended by adding the following new subsections:
   NEW SUBSECTION.  4.  a.  Following the public informational meeting held pursuant to section 479B.4 and proper publication of notice required by section 479B.4, subsection 5, paragraph “b”, a pipeline company may communicate with owners of record of any land within the voluntary easement corridor for the purpose of proposing voluntary transactions for the conveyance of easements for the project, without regard to whether such landowner received prior notice by mail. The pipeline company shall not be required to provide to such landowners prior individual notice of the proposed project before initiating communication.
   b.  Before entering into a voluntary agreement with a landowner who did not receive notice of the informational meeting by mail, the pipeline company shall provide such landowner copies of the informational meeting materials presented by the commission, the consumer advocate, and the company seeking rights under this chapter.
   c.  In a pipeline company’s initial communication with a landowner, the company shall provide a written description of the opt-out procedure described in paragraph “d”.
   d.  A landowner may decline further communication with a pipeline company concerning a possible transaction for easement rights by providing verbal or written notice to the pipeline company that states the landowner does not wish to discuss the matter further, and by submitting to the commission notice through mail or by electronic means stating the same. Upon receipt of such notice from the landowner, the commission shall forward a copy to the pipeline company. Such notice may be given up to seven calendar days after the time a landowner is provided with a written easement offer.
   e.  After receipt of notice by the landowner pursuant to paragraph “d”, the pipeline company shall not initiate further contact with the landowner for the purpose of an easement transaction, except that the company may send one or more letters by certified mail to the landowner making an offer or soliciting further communication. A landowner may rescind such refusal by contacting the pipeline company and notifying the commission no later than seven calendar days after the notice of refusal. Unless the landowner rescinds the refusal, the landowner’s land shall be deemed unavailable for an easement agreement.
   NEW SUBSECTION.  5.  a.  This subsection shall apply only to a hazardous liquid pipeline for which a pipeline company requests authority to use eminent domain to acquire interests in land. 
   b.  For a hazardous liquid pipeline that is proposed to exceed twenty miles in length within the state, the pipeline company shall make a diligent effort to assemble a route consisting exclusively of easements within the voluntary easement corridor that are acquired through voluntary conveyances. A pipeline company shall not be eligible to request authority to use eminent domain except upon a showing to the commission that it has made such diligent effort. 
   c.  After initiating communication with a landowner pursuant to subsection 4, a pipeline company shall provide a landowner with a description of the proposed project and the easement rights the company seeks to acquire, and shall request permission to conduct a civil survey. If the permission for a civil survey is granted, the pipeline company shall conduct the civil survey within ninety business days.
   d.  If a civil survey conducted pursuant to paragraph “c” finds the land is not suitable for purposes of the project, the pipeline company shall promptly provide the landowner with written notice of this finding and shall file with the commission a copy of the notice. Otherwise, within ninety business days of the completion of the civil survey, the pipeline company may submit to the landowner a written offer for purchase of the easement. The pipeline company shall, before filing an application requesting eminent domain, submit such an offer to the owners of land that might be used to assemble a route not including the land for which eminent domain is requested. The offer shall include customary terms and conditions for the conveyance of easements, and shall also include all of the following:
   (1)  A statement of the requirements applicable under the laws of this state and rules adopted by the commission relating to the construction, operation, and maintenance of a hazardous liquid pipeline upon land subject to the proposed easement, including land restoration, tile repair, and damages.
   (2)  A statement that the landowner and the pipeline company may agree to different terms not contrary to Iowa law, but that such provisions shall be set forth expressly in a contract for conveyance of an easement.
   (3)  An offer of cash compensation for the easement, which may differ in amount from the compensation offered to other landowners for easements of similar dimensions on similar land.
   e.  The pipeline company shall seek to execute contracts for the voluntary conveyance of easements within one year of initial communication with the landowners within a particular county. If, however, after no less than six months, the company is unable to execute contracts for easements sufficient to assemble a route for the pipeline, the company shall file with the commission a notice setting forth all of the following:
   (1)  The parcels for which the company has failed to reach easement agreements and for which eminent domain is sought, or that would, if an easement were granted, provide an alternative to each eminent domain parcel, and the names of the owners of those parcels.
   (2)  A list of the contacts made relating to each parcel identified in subparagraph (1), including the date and method of each contact, and a brief description of any issues causing an impasse for that parcel. 
   (3)  Either a request for an extension for further negotiations or a statement that no agreement can be reached for that parcel.
   f.  All data in the filing made under paragraph “e” shall be held confidential and shall not be subject to disclosure in response to a request under chapter 22.
   g.  For any easement that the pipeline company seeks to acquire using eminent domain, the company shall file with the commission all of the following:
   (1)  Evidence establishing that the company diligently exhausted all alternatives to assemble a continuous route for the project exclusively by means of voluntarily conveyed easements, and that it was unable to do so for one or more of the following reasons:
   (a)  Inability to obtain voluntary agreements for continuous easements on adjoining parcels within a county where an informational meeting was held, or outside that county but within five miles of the center line of the proposed pipeline route in that county, due to rejection by landowners of offers based on a valuation methodology approved by the commission, or due to the refusal of landowners to engage in communications with the company pursuant to subsection 4, paragraph “d”.
   (b)  Technical or engineering infeasibility of construction in a specific location due to terrain, other natural features, or land conditions.
   (c)  Infeasibility of compliance with safety requirements relating to construction, operation, or maintenance of a pipeline, under applicable federal law or rules, in a specified location, due to terrain, other natural features or land conditions, presence of occupied or other man-made structures, or if the commission finds on engineering evidence that safety would otherwise be adversely impacted by a route using only voluntary easements and such safety would be materially improved by use of a route facilitated by eminent domain.
   (d)  Economic infeasibility of the pipeline due to excessive easement acquisition costs for alternative routes to avoid the use of eminent domain. For purposes of this subparagraph, economic infeasibility shall be shown by clear and convincing evidence.
   (2)  A statement setting forth why the company requires an easement on the specific parcel for which the company seeks eminent domain.
   h.  Deadlines established by subsection 4 and this subsection shall be subject to extension by the commission upon a showing of good cause.
    Sec. 6.  EFFECTIVE DATE.  This Act, being deemed of immediate importance, takes effect upon enactment.
    Sec. 7.  APPLICABILITY —— RETROACTIVE APPLICABILITY.
   1.  Except as provided in subsection 2, this Act applies to the construction of any hazardous liquid pipeline for which a petition is filed on or after the effective date of this Act.
   2.  a.  Except as provided in paragraph “b”, this Act applies retroactively to the construction of any hazardous liquid pipeline designed for the transportation of liquefied carbon dioxide for which a petition is filed under chapter 479B on or after January 1, 2024.
   b.  The portion of the section of this Act enacting section 479B.16, subsection 4, applies retroactively to the construction of pipelines designed for the transportation of liquefied carbon dioxide for which a petition was filed under chapter 479B on or after January 1, 2022.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to easements for hazardous liquid pipelines, including negotiation requirements, eminent domain authorization, and contract execution.
   The bill states as the goal of the general assembly that the right of eminent domain will not be granted for a hazardous liquid pipeline except when every other reasonably available alternative has been diligently exhausted. Further stated goals include promoting the production of energy, supporting agriculture in the state of Iowa and the employment of Iowans in agricultural work, encouraging investment in Iowa agriculture, providing reasonable conditions for the planning and construction of linear infrastructure projects, and vindicating and safeguarding the property rights of all Iowans.
   Under current law, a pipeline company seeking a permit for a new hazardous liquid pipeline must give notice of the informational meeting to each landowner affected by the proposed project and each person in possession of or residing on the property. The notice must contain certain information. The bill provides that, in addition to the currently required information, a copy of the template easement to be used for acquiring land for the project, a description of the methodology to be used in determining the value of the easement for initial offers, and a statement of the policy for claiming damages must be included in the notice.
   The bill allows any person to file comments with the commission regarding the template easement or valuation methodology within 15 days of the filing, and allows the pipeline company to respond to the comments within 30 days of the company’s filing.
   The bill requires the commission to issue an order accepting, rejecting, or requiring modification of the template easement or valuation methodology within 60 days of the filing. The bill provides that the process of evaluating the template easement and valuation methodology must not delay the informational meeting or the company’s ability to negotiate with landowners, but stipulates that no easement can be finalized until the template easement is approved.
   The bill allows a pipeline company to communicate for easement negotiations with landowners within the county where an informational meeting is held or within a five-mile corridor of a proposed pipeline following a public information meeting regardless of whether the landowner received prior notice by mail. The bill states individual notice to landowners prior to initiating communication is not required by a pipeline company. The bill requires the pipeline company to provide landowners who did not receive notice of the informational meeting by mail copies of the informational meeting materials presented by the commission, the consumer advocate, and the company.
   The bill requires a pipeline company to provide a written description of the opt-out procedure during the initial communication between the company and the landowner. The bill requires the pipeline company to provide landowners who did not receive notice of the informational meeting by mail copies of the informational meeting materials presented by the commission, the consumer advocate, and the company. The opt-out procedure allows a landowner to decline further communication with the company. To initiate this opt-out procedure, the landowner must inform the pipeline company through verbal or written notice and send the Iowa utilities commission (commission) a communication through mail or by electronic means indicating the landowner’s intent to opt out. The bill requires the notice to be sent within seven days from the time the landowner is provided with a written easement offer. The bill directs the commission to forward the communication from the landowner to the company. Once the pipeline company has received notice by the landowner of the landowner’s intent to opt out, the bill prohibits the pipeline company from initiating any further contact with the landowner for the purpose of an easement transaction, except that the company may send one or more letters by certified mail to the landowner making an offer or soliciting further communication. The opt out may be rescinded by the landowner by notifying the pipeline company and the commission and must be received within seven calendar days after the notice of refusal. The bill provides that unless the landowner rescinds the refusal, the landowner’s land is deemed unavailable for an easement agreement.
   The bill provides that certain requirements are only applicable to a hazardous liquid pipeline for which a pipeline company requests authority to use eminent domain to acquire interests in land.
   The bill requires a pipeline company proposing a hazardous liquid pipeline exceeding 20 miles in length within the state of Iowa to make a diligent effort to assemble a route made exclusively of voluntary easements. A company will not be eligible to request the authority of eminent domain unless a diligent effort is shown to the commission. 
   The bill requires a pipeline company to provide to the landowner a description of the proposed project and the easement rights the company seeks to acquire, and request permission to conduct a civil survey after initiating communication with a landowner to acquire an easement.
   If a civil survey is conducted and the land is found unsuitable for the pipeline, the bill requires the company to provide the landowner written notice of the finding and file a copy of the notice with the commission. Otherwise, the bill allows the company to submit to the landowner a written offer for purchase of an easement within 90 business days after completion of the civil survey. The bill directs that before filing an application requesting eminent domain, the pipeline company must submit such offer to the owner of the land that might be used to assemble a route not including that land for which eminent domain is requested. The bill requires any offer to include customary terms and conditions of conveyance of easements, along with a statement of relevant requirements under state law and commission rules, a statement that the landowner and the pipeline company may agree to different terms that will be expressly stated in the contract, and an offer of cash compensation, which may differ from those offered to other landowners.
   The bill requires a pipeline company to seek execution of contracts for voluntary easements within one year of the initial communication with the landowners within a particular county. If after no less than six months the company has been unable to execute sufficient easement contracts to assemble a route, the bill directs the company to file with the commission a notice that must include the parcels for which no agreement was reached and for which eminent domain is sought, or that would, if an easement were granted, provide an alternative to each eminent domain parcel, the names of the owners of the parcels, a list of contacts made relating to each previously identified parcel that includes the date and method of each contact and a brief description of the issues causing an impasses for that parcel, and either a request for extension to further negotiate or a statement that no agreement can be reached for each parcel. The bill directs this data to be held confidential and such data is not subject to disclosure in response to a request under Code chapter 22.
   For any easement the pipeline company seeks to acquire using eminent domain, the bill requires the company to file with the commission evidence establishing that the company diligently exhausted all alternatives to assemble a continuous route for the project exclusively through voluntarily conveyed easements and a statement setting forth why the company requires an easement on the specific parcel for which the company seeks eminent domain.
   The bill allows the commission to extend deadlines established in the bill upon a showing of good cause.
   The bill takes effect upon enactment. The bill applies retroactively to the construction of any hazardous liquid pipeline designed for the transportation of liquefied carbon dioxide for which a petition is filed under Code chapter 479B on or after January 1, 2024, except that the provisions of new Code section 479B.16(4) apply retroactively to the construction of pipelines designed for the transportation of liquefied carbon dioxide for which a petition was filed under Code chapter 479B on or after January 1, 2022. Otherwise, the bill applies to the construction of any hazardous liquid pipeline for which a petition is filed on or after the effective date of the bill.