House File 603 - Reprinted HOUSE FILE 603 BY COMMITTEE ON GOVERNMENT OVERSIGHT (SUCCESSOR TO HSB 184) (As Amended and Passed by the House March 28, 2017 ) A BILL FOR An Act relating to eminent domain and condemnation, including 1 the authority of acquiring agencies to use eminent domain, 2 the procedures required for the use of eminent domain, and 3 compensation paid to certain property owners and including 4 effective date and applicability provisions. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 HF 603 (3) 87 md/sc/rn/md

H.F. 603 DIVISION I 1 MERCHANT LINES 2 Section 1. Section 6A.21, subsection 1, Code 2017, is 3 amended by adding the following new paragraph: 4 NEW PARAGRAPH . 0a. “Aboveground merchant line” means 5 “merchant line” as defined in section 478.6A, subsection 1, 6 excluding those merchant lines that are underground. 7 Sec. 2. Section 6A.21, subsection 1, paragraph b, Code 2017, 8 is amended to read as follows: 9 b. “Private development purposes” means the construction of, 10 or improvement related to, recreational trails, recreational 11 development paid for primarily with private funds, aboveground 12 merchant lines, housing and residential development, or 13 commercial or industrial enterprise development. 14 Sec. 3. Section 6A.21, subsection 2, Code 2017, is amended 15 to read as follows: 16 2. The limitation on the definition of public use, 17 public purpose, or public improvement does not apply to the 18 establishment, relocation, or improvement of a road pursuant 19 to chapter 306 , or to the establishment of a railway under the 20 supervision of the department of transportation as provided in 21 section 327C.2 , or to an airport as defined in section 328.1 , 22 or to land acquired in order to replace or mitigate land used 23 in a road project when federal law requires replacement or 24 mitigation. This limitation also does not apply to utilities, 25 persons, companies, or corporations under the jurisdiction of 26 the Iowa utilities board in the department of commerce or to 27 any other utility conferred the right by statute to condemn 28 private property or to otherwise exercise the power of eminent 29 domain , except to the extent such purpose includes construction 30 of aboveground merchant lines . 31 Sec. 4. Section 6A.22, subsection 2, paragraph a, 32 subparagraph (2), Code 2017, is amended to read as follows: 33 (2) The acquisition of any interest in property necessary to 34 the function of a public or private utility to the extent such 35 -1- HF 603 (3) 87 md/sc/rn/md 1/ 7

H.F. 603 purpose does not include construction of aboveground merchant 1 lines , common carrier, or airport or airport system. 2 Sec. 5. EFFECTIVE UPON ENACTMENT. This division of this 3 Act, being deemed of immediate importance, takes effect upon 4 enactment. 5 Sec. 6. APPLICABILITY. This division of this Act applies to 6 projects or condemnation proceedings commenced on or after the 7 effective date of this division of this Act. 8 DIVISION II 9 LAKE DEVELOPMENT OR CREATION 10 Sec. 7. Section 6A.22, subsection 2, paragraph c, 11 subparagraph (1), subparagraph division (c), subparagraph 12 subdivision (i), Code 2017, is amended to read as follows: 13 (i) For purposes of this subparagraph (1), “number of acres 14 justified as necessary for a surface drinking water source” 15 means according to guidelines of the United States natural 16 resource conservation service and according to analyses of 17 surface drinking water capacity needs conducted by one or more 18 registered licensed professional engineers. 19 Sec. 8. Section 6A.22, subsection 2, paragraph c, 20 subparagraph (1), Code 2017, is amended by adding the following 21 new subparagraph division: 22 NEW SUBPARAGRAPH DIVISION . (d) For condemnation 23 proceedings for which the application pursuant to section 24 6B.3 was filed after January 1, 2013, for condemnation of 25 property located in a county with a population of greater 26 than nine thousand two hundred fifty but less than nine 27 thousand three hundred, according to the 2010 federal decennial 28 census, which property sought to be condemned was in whole or 29 in part described in a petition filed under section 6A.24, 30 subsection 2, after January 1, 2013, but before January 1, 31 2014, regardless of whether the petitioner was determined by a 32 court to not be a proper acquiring agency, the acquiring agency 33 shall not have the authority to condemn private property for 34 the development or creation of a lake as a surface drinking 35 -2- HF 603 (3) 87 md/sc/rn/md 2/ 7

H.F. 603 water source unless all of the following have been satisfied: 1 (i) Upon receipt by the acquiring agency of a petition, 2 signed by not less than twenty-five percent of the affected 3 property owners, the acquiring agency shall retain a certified 4 hydrologist to conduct a review and analysis of the proposed 5 development or creation of a lake. However, to be valid the 6 petition must be filed not later than ninety days following 7 the effective date of this division of this Act or ninety 8 days after the filing date of the application under section 9 6B.3, whichever is later. The certified hydrologist shall be 10 selected by a majority of a committee comprised of all affected 11 property owners and a representative of the acquiring agency. 12 The acquiring agency shall be responsible for paying the fees 13 and expenses of the certified hydrologist. For purposes of 14 this subparagraph (1), “certified hydrologist” means a person 15 certified by the American institute of hydrology. If a valid 16 petition is not filed within the prescribed ninety-day period, 17 the requirements of this subparagraph subdivision (i) shall be 18 deemed satisfied. 19 (ii) Upon receipt by the acquiring agency of a petition 20 signed by not less than twenty-five percent of the affected 21 property owners, the acquiring agency shall retain a licensed 22 professional engineer to conduct an additional independent 23 review and analysis of the determinations made under 24 subparagraph division (c), subparagraph subdivisions (i) and 25 (ii). However, to be valid the petition must be filed not 26 later than ninety days following the effective date of this 27 division of this Act or ninety days after the filing date of 28 the application under section 6B.3, whichever is later. The 29 licensed professional engineer shall be selected by a majority 30 of a committee comprised of all affected property owners and 31 a representative of the acquiring agency. The acquiring 32 agency shall be responsible for paying the fees and expenses 33 of the licensed professional engineer. If a valid petition 34 is not filed within the prescribed ninety-day period, the 35 -3- HF 603 (3) 87 md/sc/rn/md 3/ 7

H.F. 603 requirements of this subparagraph subdivision (ii) shall be 1 deemed satisfied. 2 (iii) The United States army corps of engineers has 3 performed an engineering review of the project and approved 4 all required permits and authorizations for completion of the 5 project. 6 (iv) The acquiring agency has acquired at least eighty 7 percent of the land area comprising the proposed water supply 8 pool through voluntary acquisitions or voluntary negotiation 9 and purchases. 10 Sec. 9. EFFECTIVE UPON ENACTMENT. This division of this 11 Act, being deemed of immediate importance, takes effect upon 12 enactment. 13 Sec. 10. APPLICABILITY. This division of this Act applies 14 to projects or condemnation proceedings pending or commenced on 15 or after the effective date of this division of this Act. 16 DIVISION III 17 RELOCATION OF BUSINESSES AND FARM OPERATIONS 18 Sec. 11. Section 6B.26, subsection 1, Code 2017, is amended 19 to read as follows: 20 1. A landowner shall not be dispossessed under condemnation 21 proceedings of the landowner’s residence, dwelling house, 22 outbuildings if the residence or dwelling house is also 23 acquired, business, farm operation, orchard, or garden, 24 until the damages thereto have been finally determined and 25 paid. However, if the property described in this subsection 26 is condemned for highway purposes by the state department of 27 transportation, the condemning authority may take possession 28 of the property either after the damages have been finally 29 determined and paid or one hundred eighty days after the 30 compensation commission has determined and filed its award, in 31 which event all of the appraisement of damages shall be paid 32 to the property owner before the dispossession can take place. 33 This subsection shall not apply to condemnation proceedings 34 for drainage or levee improvements, or for public school 35 -4- HF 603 (3) 87 md/sc/rn/md 4/ 7

H.F. 603 purposes. For the purposes of this subsection , “outbuildings” 1 means structures and improvements located in proximity to the 2 landowner’s residence. 3 Sec. 12. NEW SECTION . 316.6A Replacement property payment 4 to certain businesses and farm operations. 5 1. In addition to payments otherwise authorized by this 6 chapter, the displacing agency shall make a payment to a 7 displaced person who is displaced from the person’s place of 8 business or farm operation if the displaced person owned the 9 real property on which the business was conducted or where the 10 farm operation was located for at least one year prior to the 11 date of initiation of negotiations for the acquisition of the 12 real property and if the displaced person purchases comparable 13 replacement real property to conduct the displaced person’s 14 business or farm operation within eighteen months following the 15 date the displaced person vacates the real property or receives 16 payment from the displacing agency under another provision of 17 this chapter, whichever is later. The additional payment shall 18 include the following amounts: 19 a. An amount that when added to the acquisition cost of 20 the real property acquired by the displacing agency, excluding 21 any dwelling on the property, equals the reasonable cost of 22 comparable real property for the displaced person’s business 23 or farm operation, as determined by an appraiser selected by 24 the displacing agency. In the absence of available replacement 25 real property, the amount of the payment under this paragraph 26 shall be the difference between the acquisition cost of the 27 real property acquired by the displacing agency and the sum 28 of the estimated cost of comparable land and the estimated 29 cost of constructing comparable improvements on the land 30 necessary for the displaced person to conduct the person’s 31 business or farm operation. If the displaced person disagrees 32 with the amount determined by the appraiser selected by the 33 displacing agency, the displaced person may, at the expense 34 of the displacing agency, select an independent appraiser to 35 -5- HF 603 (3) 87 md/sc/rn/md 5/ 7

H.F. 603 determine the amounts required under this paragraph. If the 1 amount determined by the appraiser selected by the displaced 2 person and the amount determined by the appraiser selected by 3 the displacing agency are not equal and the displacing agency 4 and the displaced person cannot agree on an appropriate amount, 5 the amount under this paragraph shall be the average of such 6 amounts determined by the appraisers. 7 b. An amount that compensates the displaced person for 8 any increased interest costs and other debt service costs 9 that the displaced person is required to pay for financing 10 the acquisition of comparable replacement real property. The 11 amount shall be paid only if the real property acquired by 12 the displacing agency was encumbered by a bona fide mortgage 13 or land contract creating a valid lien on the real property, 14 excluding the dwelling, or on the dwelling, for not less than 15 one year immediately prior to the initiation of negotiations 16 for the acquisition of the real property. 17 c. The amount of actual, reasonable, and necessary expenses 18 incurred by the displaced person for evidence of title, 19 recording fees, and other costs incident to the purchase of 20 comparable replacement real property, but not including prepaid 21 expenses. 22 2. In addition to payments otherwise authorized by this 23 chapter, the displacing agency shall make a payment to a 24 displaced person or a person who is displaced from the person’s 25 place of business or farm operation as an indirect result of 26 the acquisition of real property by the displacing agency 27 if the person in whole or in part owns the business or farm 28 operation, the person leased the real property upon which the 29 business was conducted or where the farm operation was located 30 for at least one year prior to the date of initiation of 31 negotiations for the acquisition of the real property, and the 32 person leases or purchases comparable replacement real property 33 to conduct the displaced person’s business or farm operation 34 within eighteen months of the date the person vacates the 35 -6- HF 603 (3) 87 md/sc/rn/md 6/ 7

H.F. 603 real property or receives payment from the displacing agency 1 under another provision of this chapter, whichever is later. 2 The displacing agency shall determine whether a displacement 3 described in this subsection has occurred. The additional 4 payment shall include the following amounts: 5 a. If the person leases comparable real property, the 6 difference between the average monthly amount of the lease of 7 the comparable real property and the average monthly amount 8 of the lease for the real property acquired by the displacing 9 agency, multiplied by forty-two. 10 b. If the person purchases comparable real property to 11 conduct the person’s business or operate the person’s farm, an 12 amount calculated consistent with the provisions of subsection 13 1, paragraphs “a” and “c” . 14 3. All determinations to carry out this section shall be 15 made in accordance with administrative rules adopted by the 16 department. 17 Sec. 13. EFFECTIVE UPON ENACTMENT. This division of this 18 Act, being deemed of immediate importance, takes effect upon 19 enactment. 20 Sec. 14. APPLICABILITY. This division of this Act applies 21 to programs or projects or condemnation proceedings pending or 22 commenced on or after the effective date of this division of 23 this Act. 24 -7- HF 603 (3) 87 md/sc/rn/md 7/ 7