Senate File 506 - Introduced
SENATE FILE
BY COMMITTEE ON
GOVERNMENT OVERSIGHT
(SUCCESSOR TO SSB
1276)
A BILL FOR
1 An Act relating to the construction, erection, maintenance,
2 or operation of electric transmission lines and hazardous
3 liquid pipelines, and including effective date and
4 applicability provisions.
5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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PAG LIN
1 1 Section 1. Section 478.4, Code 2015, is amended to read as
1 2 follows:
1 3 478.4 Franchise ==== hearing.
1 4 The utilities board shall consider the petition and any
1 5 objections filed to it in the manner provided. It shall
1 6 examine the proposed route or cause any engineer selected
1 7 by it to do so. If a hearing is held on the petition it may
1 8 hear testimony as may aid it in determining the propriety of
1 9 granting the franchise. It may grant the franchise in whole or
1 10 in part upon the terms, conditions, and restrictions, and with
1 11 the modifications as to location and route as may seem to it
1 12 just and proper. Before granting the franchise, the utilities
1 13 board shall make a finding that the proposed line or lines are
1 14 necessary to serve a public use and represents a reasonable
1 15 relationship to an overall plan of transmitting electricity in
1 16 the public interest. In addition, if the petitioner is not
1 17 a public utility, as defined in section 476.1, subsection 3,
1 18 paragraph "a", section 476.1A, or section 476.1B, or an electric
1 19 transmission owner providing electric service directly to a
1 20 public utility or to consumers located in this state, before
1 21 granting the franchise the utilities board shall make a finding
1 22 that the proposed line or lines are recommended in the most
1 23 recent annual report prepared pursuant to section 473.15. A
1 24 franchise shall not become effective until the petitioners
1 25 shall pay, or file an agreement to pay, all costs and expenses
1 26 of the franchise proceeding, whether or not objections are
1 27 filed, including costs of inspections or examinations of the
1 28 route, hearing, salaries, publishing of notice, and any other
1 29 expenses reasonably attributable to it. The funds received
1 30 for the costs and the expenses of the franchise proceeding
1 31 shall be remitted to the treasurer of state for deposit in the
1 32 department of commerce revolving fund created in section 546.12
1 33 as provided in section 476.10.
1 34 Sec. 2. Section 478.6, Code 2015, is amended by adding the
1 35 following new unnumbered paragraph:
2 1 NEW UNNUMBERED PARAGRAPH If the petitioner is not a
2 2 public utility, as defined in section 476.1, subsection 3,
2 3 paragraph "a", section 476.1A, or section 476.1B, or an electric
2 4 transmission owner providing electric service directly to a
2 5 public utility or to consumers located in this state, before
2 6 the petitioner is vested with the power of condemnation the
2 7 utilities board shall require the petitioner to obtain through
2 8 voluntary easements seventy=five percent or more of the
2 9 land needed for the construction, erection, maintenance, and
2 10 operation of the transmission lines, wires, and cables.
2 11 Sec. 3. Section 478.15, Code 2015, is amended by adding the
2 12 following new unnumbered paragraph:
2 13 NEW UNNUMBERED PARAGRAPH If a person, company, or
2 14 corporation having secured a franchise as provided in this
2 15 chapter is vested with the right of eminent domain, and the
2 16 person, company, or corporation is not a public utility as
2 17 defined in section 476.1, subsection 3, paragraph "a", section
2 18 476.1A, or section 476.1B, or an electric transmission owner
2 19 providing electric service directly to a public utility or
2 20 to consumers located in this state, the board may order the
2 21 person, company, or corporation to pay reasonable attorney fees
2 22 to ensure a private owner of land access to legal counsel.
2 23 Upon the conclusion of eminent domain proceedings, the person,
2 24 company, or corporation shall pay all costs of the assessment
2 25 made by the commissioners and reasonable attorney fees and
2 26 costs, including the reasonable cost of one appraisal, incurred
2 27 by the private owner of land if the award of the commissioners
2 28 or the court on appeal exceeds one hundred percent of the
2 29 final offer of the person, company, or corporation prior to
2 30 condemnation, notwithstanding section 6B.33 or any other
2 31 provision to the contrary.
2 32 Sec. 4. Section 478.33, Code 2015, is amended to read as
2 33 follows:
2 34 478.33 Cancellation == complaint procedures.
2 35 1. A person seeking to acquire an easement or other property
3 1 interest for the construction, maintenance or operation of an
3 2 electric transmission line shall:
3 3 1. a. Allow the landowner or a person serving in a
3 4 fiduciary capacity in the landowner's behalf to cancel any
3 5 agreement granting an easement or other interest by certified
3 6 mail with return requested to the company's principal place
3 7 of business if received by the company within seven days,
3 8 excluding Saturday and Sunday, of the date of the contract
3 9 and inform the landowner or such fiduciary in writing of the
3 10 right to cancel prior to the signing of the agreement by the
3 11 landowner or such fiduciary.
3 12 2. b. Provide the landowner or a person serving in a
3 13 fiduciary capacity in the landowner's behalf with a form in
3 14 duplicate for the notice of cancellation.
3 15 3. c. Not record any agreement until after the period for
3 16 cancellation has expired.
3 17 4. d. Not include in the agreement any waiver of the right
3 18 to cancel in accordance with this section. The landowner or
3 19 a person serving in a fiduciary capacity in the landowner's
3 20 behalf may exercise the right of cancellation only once for
3 21 each transmission line project.
3 22 2. Any complaint that a petitioner that is not a public
3 23 utility, as defined in section 476.1, subsection 3, paragraph
3 24 "a", section 476.1A, or section 476.1B, or an electric
3 25 transmission owner providing electric service directly to a
3 26 public utility or to consumers located in this state, has
3 27 violated this section shall be subject to the investigation
3 28 provisions of section 476.3, subsection 1.
3 29 Sec. 5. Section 479B.9, Code 2015, is amended to read as
3 30 follows:
3 31 479B.9 Final order ==== condition.
3 32 The board may grant a permit in whole or in part upon
3 33 terms, conditions, and restrictions as to location and route
3 34 as it determines to be just and proper. A permit shall not be
3 35 granted to a pipeline company unless the board determines that
4 1 the proposed services will promote the public convenience and
4 2 necessity. In addition, if the pipeline company is seeking
4 3 a permit for a pipeline for crude oil, before granting the
4 4 franchise the board shall make a finding that the proposed
4 5 line or lines are recommended in the most recent annual report
4 6 prepared pursuant to section 473.15.
4 7 Sec. 6. Section 479B.13, Code 2015, is amended to read as
4 8 follows:
4 9 479B.13 Financial condition of permittee == bond.
4 10 Before a permit is granted under this chapter the applicant
4 11 must satisfy the board that the applicant has property within
4 12 this state other than pipelines or underground storage
4 13 facilities, subject to execution of a value in excess of two
4 14 hundred fifty thousand dollars, or the applicant must file
4 15 and maintain with the board a surety bond in the penal sum of
4 16 two hundred fifty thousand dollars with surety approved by
4 17 the board, conditioned that the applicant will pay any and
4 18 all damages legally recovered against it growing out of the
4 19 construction, maintenance, or operation of its pipeline or
4 20 underground storage facilities in this state. If the applicant
4 21 is seeking a permit for a pipeline for crude oil, the value of
4 22 the property or amount of the surety bond shall be five hundred
4 23 thousand dollars or more for each county through which the
4 24 proposed pipeline would be built, as determined by the board.
4 25 When the pipeline company deposits with the board security
4 26 satisfactory to the board as a guaranty for the payment of the
4 27 damages, or furnishes to the board satisfactory proofs of its
4 28 solvency and financial ability to pay the damages, the pipeline
4 29 company is relieved of the provisions requiring bond.
4 30 Sec. 7. Section 479B.16, Code 2015, is amended to read as
4 31 follows:
4 32 479B.16 Eminent domain.
4 33 1. A pipeline company granted a pipeline permit shall
4 34 be vested with the right of eminent domain, to the extent
4 35 necessary and as prescribed and approved by the board, not
5 1 exceeding seventy=five feet in width for right=of=way and
5 2 not exceeding one acre in any one location in addition to
5 3 right=of=way for the location of pumps, pressure apparatus,
5 4 or other stations or equipment necessary to the proper
5 5 operation of its pipeline. The board may grant additional
5 6 eminent domain rights where the pipeline company has presented
5 7 sufficient evidence to adequately demonstrate that a greater
5 8 area is required for the proper construction, operation, and
5 9 maintenance of the pipeline or for the location of pumps,
5 10 pressure apparatus, or other stations or equipment necessary to
5 11 the proper operation of its pipeline.
5 12 2. A pipeline company granted a permit for underground
5 13 storage of hazardous liquid shall be vested with the right of
5 14 eminent domain to the extent necessary and as prescribed and
5 15 approved by the board in order to appropriate for its use for
5 16 the underground storage of hazardous liquid any subsurface
5 17 stratum or formation in any land which the board shall have
5 18 found to be suitable and in the public interest for the
5 19 underground storage of hazardous liquid, and may appropriate
5 20 other interests in property, as may be required adequately to
5 21 examine, prepare, maintain, and operate the underground storage
5 22 facilities.
5 23 3. If the pipeline company is seeking a permit for a
5 24 pipeline for crude oil, before the pipeline company shall be
5 25 vested with the power of condemnation the board shall require
5 26 the pipeline company to obtain through voluntary easements
5 27 seventy=five percent or more of the land needed for the
5 28 construction, operation, and maintenance of the pipeline and
5 29 stations or equipment for the proper operation of the pipeline.
5 30 4. If a pipeline company vested with the right of eminent
5 31 domain is constructing a pipeline for crude oil, the board may
5 32 order the pipeline company to pay reasonable attorney fees to
5 33 ensure a private owner of land access to legal counsel. Upon
5 34 the conclusion of eminent domain proceedings, the pipeline
5 35 company shall pay all costs of the assessment made by the
6 1 commissioners and reasonable attorney fees and costs, including
6 2 the reasonable cost of one appraisal, incurred by the private
6 3 owner of land if the award of the commissioners or the court on
6 4 appeal exceeds one hundred percent of the final offer of the
6 5 pipeline company prior to condemnation, notwithstanding section
6 6 6B.33 and section 479B.30, subsection 6, or any other provision
6 7 to the contrary.
6 8 5. This chapter does not authorize the construction of
6 9 a pipeline longitudinally on, over, or under any railroad
6 10 right=of=way or public highway, or at other than an approximate
6 11 right angle to a railroad track or public highway without
6 12 the consent of the railroad company, the state department of
6 13 transportation, or the county board of supervisors, and this
6 14 chapter does not authorize or give the right of condemnation or
6 15 eminent domain for such purposes.
6 16 Sec. 8. Section 479B.24, Code 2015, is amended to read as
6 17 follows:
6 18 479B.24 Cancellation == complaint procedures.
6 19 1. A pipeline company seeking to acquire an easement or
6 20 other property interest for the construction, maintenance, or
6 21 operation of a pipeline or underground storage facility shall
6 22 do all of the following:
6 23 1. a. Allow the landowner or a person serving in a
6 24 fiduciary capacity on the landowner's behalf to cancel an
6 25 agreement granting an easement or other interest by restricted
6 26 certified mail to the pipeline company's principal place of
6 27 business if received by the pipeline company within seven days,
6 28 excluding Saturday and Sunday, of the date of the agreement
6 29 and inform the landowner or the fiduciary in writing of the
6 30 right to cancel prior to the signing of the agreement by the
6 31 landowner or the fiduciary.
6 32 2. b. Provide the landowner or a person serving in a
6 33 fiduciary capacity in the landowner's behalf with a form in
6 34 duplicate for the notice of cancellation.
6 35 3. c. Not record an agreement until after the period for
7 1 cancellation has expired.
7 2 4. d. Not include in the agreement a waiver of the right
7 3 to cancel in accordance with this section. The landowner or
7 4 a person serving in a fiduciary capacity in the landowner's
7 5 behalf may exercise the right of cancellation only once for
7 6 each pipeline project.
7 7 2. Any complaint that a pipeline company that is seeking a
7 8 permit for a pipeline for crude oil has violated this section
7 9 shall be subject to the investigation provisions of section
7 10 476.3, subsection 1.
7 11 Sec. 9. Section 479B.30, subsection 6, Code 2015, is amended
7 12 to read as follows:
7 13 6. The pipeline company shall pay all costs of the
7 14 assessment made by the commissioners and reasonable attorney
7 15 fees and costs incurred by the landowner as determined by the
7 16 commissioners if the award of the commissioners exceeds one
7 17 hundred ten percent of the final offer of the pipeline company
7 18 prior to the determination of damages; if the award does not
7 19 exceed one hundred ten percent, the landowners shall pay the
7 20 fees and costs incurred by the pipeline company. The pipeline
7 21 company shall file with the sheriff an affidavit setting forth
7 22 the most recent offer made to the landowner. Commissioners
7 23 shall receive a per diem of fifty dollars and actual and
7 24 necessary expenses incurred in the performance of their
7 25 official duties. The pipeline company shall also pay all costs
7 26 occasioned by the appeal, including reasonable attorney fees
7 27 to be taxed by the court, unless on the trial of the appeal the
7 28 same or a lesser amount of damages is awarded than was allowed
7 29 by the commission from which the appeal was taken.
7 30 Sec. 10. EFFECTIVE UPON ENACTMENT. This Act, being deemed
7 31 of immediate importance, takes effect upon enactment.
7 32 Sec. 11. APPLICABILITY.
7 33 1. The sections of this Act amending sections 478.4, 478.6,
7 34 478.15, and 478.33 are applicable to petitions for franchise
7 35 filed on or after November 1, 2014, that have not been acted
8 1 upon by the utilities board on the effective date of this Act
8 2 and to petitions for franchise filed on or after the effective
8 3 date of this Act.
8 4 2. The sections of this Act amending sections 479B.9,
8 5 479B.13, 479B.16, 479B.24, and 479B.30 are applicable to
8 6 applications for permits filed on or after November 1, 2014,
8 7 that have not been acted upon by the utilities board on the
8 8 effective date of this Act and to applications for permits
8 9 filed on or after the effective date of this Act.
8 10 EXPLANATION
8 11 The inclusion of this explanation does not constitute agreement with
8 12 the explanation's substance by the members of the general assembly.
8 13 This bill relates to the construction, erection,
8 14 maintenance, or operation of electric transmission lines and
8 15 hazardous liquid pipelines.
8 16 The bill primarily applies to petitioners for an electric
8 17 transmission franchise that are not a public utility as
8 18 defined in Code section 476.1 furnishing gas or electricity
8 19 to the public for compensation, a rural electric cooperative,
8 20 or a municipal utility, and to applicants for a permit to
8 21 construct a pipeline for crude oil. In both cases, in order
8 22 to obtain a franchise or a permit the Iowa utilities board
8 23 is required to make a finding that the proposed transmission
8 24 line or crude oil pipeline is recommended in the most recent
8 25 annual report prepared by the economic development authority
8 26 pursuant to Code section 473.15. That report assesses the
8 27 progress of state agencies in implementing energy management
8 28 improvements, alternative and renewable energy systems, and
8 29 life cycle cost analyses under Code chapter 470, and on the use
8 30 of renewable fuels. The report also provides an assessment of
8 31 the economic and environmental impact of the progress made by
8 32 state agencies related to energy management and alternative and
8 33 renewable energy, along with recommendations on technological
8 34 opportunities and policies necessary for continued improvement
8 35 in these areas.
9 1 The bill provides that in order to be granted eminent
9 2 domain authority (power of condemnation), an applicant for a
9 3 franchise (electric transmission lines) or permit (hazardous
9 4 liquid pipelines) must obtain through voluntary easements 75
9 5 percent or more of the land needed, and that if an applicant
9 6 is vested with the right of eminent domain, the board may
9 7 order the applicant to pay reasonable attorney fees to ensure
9 8 a private owner of land access to legal counsel, and upon
9 9 conclusion of the eminent domain proceedings to pay all costs
9 10 of the assessment, attorney fees and costs, and the cost of one
9 11 appraisal if the award exceeds 100 percent of the final offer
9 12 made by the applicant.
9 13 Further, in the event of a complaint that an applicant has
9 14 violated provisions permitting an owner of land to cancel any
9 15 agreement granting an easement or other interest, the applicant
9 16 will be subject to the investigation provisions in current law
9 17 that can lead to a formal proceeding by the Iowa utilities
9 18 board.
9 19 Additionally, with reference to an application for a permit
9 20 for a crude oil pipeline, the surety bond requirement is
9 21 increased from $250,000 to $500,000.
9 22 Finally, with reference to any applicant under Code
9 23 chapter 479B (hazardous liquid pipelines), the bill deletes a
9 24 requirement that a landowner shall pay commissioner assessment
9 25 costs and reasonable attorney fees and other costs in a
9 26 proceeding in response to a petition for the determination of
9 27 construction damages if costs awarded to the landowner do not
9 28 exceed 110 percent.
9 29 The bill takes effect upon enactment and is retroactively
9 30 applicable to November 1, 2014, for petitions for franchise
9 31 under Code chapter 478 and applications for permits under
9 32 Code chapter 479B that have not been acted upon by the Iowa
9 33 utilities board on the effective date of the bill and to
9 34 petitions and permits filed on or after the bill's effective
9 35 date.
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