Read the full stored bill text
House
File
2702
-
Introduced
HOUSE
FILE
2702
BY
COMMITTEE
ON
NATURAL
RESOURCES
(SUCCESSOR
TO
HSB
740)
A
BILL
FOR
An
Act
relating
to
the
production
of
oil
and
gas,
geologic
1
hydrogen,
hydrocarbons,
or
other
minerals,
including
2
establishing
certain
duties
required
of
oil
and
gas
3
operators,
requiring
notice
and
surface
use
agreement
4
offers,
and
providing
for
remedies.
5
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
6
TLSB
6881HV
(3)
91
sb/js
H.F.
2702
Section
1.
NEW
SECTION
.
557D.1
Short
title.
1
This
chapter
shall
be
known
and
may
be
cited
as
the
“
Iowa
2
Surface
Owners
Protection
Act
”.
3
Sec.
2.
NEW
SECTION
.
557D.2
Applicability.
4
This
chapter
applies
to
all
of
the
following:
5
1.
Real
property
and
its
improvements
on
which
oil
and
gas
6
operations
are
conducted.
7
2.
Oil
and
gas
operations
commenced
on
or
after
July
1,
8
2026,
except
for
all
of
the
following:
9
a.
Maintenance
and
ongoing
production
activities
related
10
to
an
oil
or
gas
well
producing
or
capable
of
producing
oil
or
11
gas
on
July
1,
2026,
for
which
the
operator
has
a
valid
permit
12
from
the
department
of
natural
resources,
except
for
all
of
the
13
following:
14
(1)
Reentries,
workovers,
and
other
oil
or
gas
operations
15
are
subject
to
this
chapter
if
the
activities
disturb
16
additional
surface.
17
(2)
The
duty
to
reclaim,
as
stated
in
section
557D.4,
18
subsection
3,
is
applicable
to
a
well
that
is
not
plugged
or
19
abandoned
on
July
1,
2026.
20
b.
Oil
and
gas
operations
conducted
within
the
scope
of
21
an
agreement,
entered
into
prior
to
July
1,
2026,
between
a
22
surface
owner
and
an
operator
that
sets
forth
the
rights
and
23
obligations
of
the
parties
with
respect
to
surface
activities
24
conducted
by
the
operator.
25
Sec.
3.
NEW
SECTION
.
557D.3
Definitions.
26
As
used
in
this
chapter,
unless
the
context
otherwise
27
requires:
28
1.
“Farm
tenant”
means
a
person
who
occupies
land
or
29
premises
belonging
to
another
in
subordination
to
the
owner’s
30
title
and
with
the
owner’s
assent,
express
or
implied.
31
2.
“Oil
and
gas
operations”
means
all
activities
affecting
32
a
surface
owner’s
land
that
are
associated
with
exploration,
33
drilling,
or
production
of
oil
and
gas,
geologic
hydrogen,
34
hydrocarbons,
or
other
minerals,
from
initial
exploration
35
-1-
LSB
6881HV
(3)
91
sb/js
1/
7
H.F.
2702
through
final
reclamation
of
the
affected
surface.
1
3.
“Operator”
means
a
person
with
the
legal
right
to
conduct
2
oil
and
gas
operations,
including
an
agent,
employee,
or
3
contractor
of
the
person.
4
4.
“Reclaim”
means
to
substantially
restore
the
surface
5
affected
by
oil
and
gas
operations
to
the
condition
that
6
existed
prior
to
the
oil
and
gas
operations,
or
as
otherwise
7
agreed
to
in
writing
by
the
operator
and
surface
owner.
8
5.
“Surface
owner”
means
a
person
who
holds
legal
or
9
equitable
title,
as
shown
in
the
records
of
the
county
clerk,
10
to
the
surface
of
the
real
property
on
which
the
operator
has
11
the
legal
right
to
conduct
oil
and
gas
operations.
12
6.
“Surface
use
and
compensation
agreement”
means
an
13
agreement
between
a
surface
owner
and
an
operator
specifying
14
the
rights
and
obligations
of
the
surface
owner
and
the
15
operator
concerning
oil
and
gas
operations.
16
Sec.
4.
NEW
SECTION
.
557D.4
Compensation
for
oil
and
gas
17
operations.
18
1.
An
operator
shall
compensate
the
surface
owner
for
all
of
19
the
following,
as
applicable,
caused
by
oil
and
gas
operations:
20
a.
For
damages
sustained
to
all
of
the
following:
21
(1)
Crops.
22
(2)
Crop
yields.
23
(3)
Soils.
24
(4)
Water.
25
(5)
Groundwater.
26
(6)
Any
land
improvement,
including
a
tile
drainage
system
27
or
soil
and
water
conservation
structure.
28
b.
Loss
of
agricultural
production
and
income.
29
c.
Reduction
in
land
value.
30
d.
Loss
of
use.
31
e.
Loss
of
access
to
the
surface
owner’s
land.
32
2.
An
operator
shall
compensate
a
farm
tenant
of
the
33
surface
owner
for
any
crop
damage
or
reduction
in
crop
yields
34
and
any
leasehold
improvements
damaged
as
a
result
of
the
35
-2-
LSB
6881HV
(3)
91
sb/js
2/
7
H.F.
2702
operator’s
oil
and
gas
operations.
The
compensation
shall
1
equal
the
amount
invested
in
the
crop
or
the
value
of
the
crop,
2
whichever
is
greater,
and
the
cost
of
repairing
and
replacing
3
the
improvements.
4
3.
An
operator
shall
reclaim
all
the
surface
affected
by
5
the
operator’s
oil
and
gas
operations
once
the
oil
and
gas
6
operations
are
completed
or
the
well
is
plugged
or
closed.
7
Sec.
5.
NEW
SECTION
.
557D.5
Notice
of
operations
——
8
proposed
surface
use
and
compensation
agreement.
9
1.
Prior
to
initial
entry
upon
the
land
for
an
activity
that
10
does
not
disturb
the
surface,
including
an
inspection,
staking,
11
survey,
measurement,
or
general
evaluation
of
a
proposed
route
12
or
site
for
oil
and
gas
operations,
the
operator
shall
provide
13
at
least
ten
business
days’
notice
by
certified
mail
or
hand
14
delivery
to
the
surface
owner.
15
2.
No
less
than
ninety
days
before
first
entering
the
16
surface
of
the
land
to
conduct
oil
and
gas
operations,
an
17
operator
shall,
by
certified
mail
or
hand
delivery,
give
the
18
surface
owner
notice
of
the
planned
oil
and
gas
operations.
19
The
notice
shall
include
all
of
the
following:
20
a.
Sufficient
disclosure
of
the
planned
oil
and
gas
21
operations
to
enable
the
surface
owner
to
evaluate
the
effect
22
of
the
operations
on
the
property.
23
b.
A
copy
of
the
provisions
of
this
chapter.
24
c.
The
name,
address,
telephone
number
and,
if
available,
25
facsimile
number,
and
electronic
mail
address
of
the
operator
26
and
the
operator’s
authorized
representative.
27
d.
A
proposed
surface
use
and
compensation
agreement
28
addressing,
at
a
minimum
and
to
the
extent
known,
all
of
the
29
following
issues:
30
(1)
The
placement,
specifications,
maintenance,
and
design
31
of
well
pads,
gathering
pipelines,
and
roads
to
be
constructed
32
for
oil
and
gas
operations.
33
(2)
Terms
of
ingress
and
egress
upon
the
surface
of
the
land
34
for
oil
and
gas
operations.
35
-3-
LSB
6881HV
(3)
91
sb/js
3/
7
H.F.
2702
(3)
Construction,
maintenance,
and
placement
of
all
pits
1
and
equipment
used
or
planned
for
oil
and
gas
operations.
2
(4)
Use
and
impoundment
of
water
on
the
surface
of
the
land.
3
(5)
Removal
and
restoration
of
plant
life.
4
(6)
Surface
water
drainage
changes.
5
(7)
Actions
to
limit
and
effectively
control
precipitation
6
runoff
and
erosion.
7
(8)
Control
and
management
of
noise,
weeds,
dust,
traffic,
8
trespass,
litter,
and
interference
with
the
surface
owner’s
9
use.
10
(9)
Interim
and
final
reclamation.
11
(10)
Actions
to
minimize
surface
damages
to
the
property.
12
(11)
Operator
indemnification
for
injury
to
persons
caused
13
by
the
operator.
14
(12)
An
offer
of
compensation
for
damages
to
the
surface
15
affected
by
oil
and
gas
operations.
16
3.
If
legal
title
and
equitable
title
are
not
held
by
the
17
same
person,
notice
shall
be
given
to
both
the
holder
of
legal
18
title
and
to
the
holder
of
equitable
title.
19
4.
a.
Upon
receipt
of
the
notice
required
by
subsection
2,
20
the
surface
owner
may
do
any
of
the
following:
21
(1)
Accept
the
proposed
surface
use
and
compensation
22
agreement.
23
(2)
Reject
the
proposed
surface
use
and
compensation
24
agreement.
Failure
to
accept
the
proposed
agreement
within
25
ninety
days
shall
be
deemed
to
be
a
rejection
by
the
surface
26
owner.
27
b.
If
the
proposed
agreement
is
rejected,
the
surface
owner
28
may
enter
into
negotiations
with
the
operator,
including,
if
29
the
parties
agree,
with
the
aid
of
mediation.
30
5.
The
operator
and
the
surface
owner
may
enter
into
a
31
mutually
acceptable
agreement
that
sets
forth
the
rights
32
and
obligations
of
the
parties
with
respect
to
the
surface
33
activities
conducted
by
the
operator.
34
6.
Notices
required
under
this
section
shall
be
deemed
to
35
-4-
LSB
6881HV
(3)
91
sb/js
4/
7
H.F.
2702
have
been
received
five
days
after
mailing
by
certified
mail
or
1
immediately
upon
hand
delivery.
2
Sec.
6.
NEW
SECTION
.
557D.6
Entry
without
agreement.
3
If,
after
ninety
days
from
when
a
surface
owner
received
4
notice
pursuant
to
section
557D.5,
subsection
2,
no
surface
use
5
and
compensation
agreement
has
been
entered
into,
the
operator
6
may
enter
the
surface
owner’s
property
and
conduct
oil
and
gas
7
operations.
The
operator
shall
pay
actual
damages
for
entry
8
and
use
of
the
surface
owner’s
property.
9
Sec.
7.
NEW
SECTION
.
557D.7
Damages.
10
In
an
action
brought
pursuant
to
this
chapter,
if
the
court
11
finds
that
compensation
is
owed
under
section
557D.4,
the
court
12
may
also
award
the
surface
owner
one
of
the
following:
13
1.
Attorney
fees
and
costs
if
any
of
the
following
occurred:
14
a.
The
operator
conducted
oil
and
gas
operations
without
15
providing
notice
as
required
by
section
557D.5,
subsection
2.
16
b.
The
operator
conducted
oil
and
gas
operations
without
a
17
surface
use
and
compensation
agreement
and
before
depositing
a
18
bond
or
other
surety
as
required
pursuant
to
section
458A.4,
19
subsection
1,
paragraph
“d”
.
20
c.
The
operator
conducted
oil
and
gas
operations
outside
21
the
scope
of
a
surface
use
and
compensation
agreement
and,
when
22
entering
into
the
agreement,
knew
or
should
have
known
that
oil
23
and
gas
operations
would
be
conducted
outside
the
scope
of
the
24
agreement.
25
d.
The
operator
failed
to
exercise
good
faith
in
complying
26
with
the
provisions
of
this
chapter
or
the
terms
of
a
surface
27
use
and
compensation
agreement.
28
2.
Attorney
fees,
costs,
and
treble
damages
if
the
court
29
finds,
by
clear
and
convincing
evidence,
that
any
of
the
30
following
occurred:
31
a.
The
operator
willfully
and
knowingly
entered
upon
the
32
premises
for
the
purpose
of
commencing
the
drilling
of
a
well
33
without
the
occurrence
of
any
of
the
following:
34
(1)
Giving
notice
as
required
by
section
557D.5,
subsection
35
-5-
LSB
6881HV
(3)
91
sb/js
5/
7
H.F.
2702
2.
1
(2)
Entering
a
surface
use
and
compensation
agreement
with
2
the
surface
owner
before
depositing
a
bond
or
other
surety
3
pursuant
to
section
458A.4,
subsection
1,
paragraph
“d”
.
4
b.
The
operator
willfully
and
knowingly
violated
the
surface
5
use
and
compensation
agreement.
6
Sec.
8.
NEW
SECTION
.
557D.8
Remedies
not
exclusive.
7
The
remedies
provided
by
this
chapter
are
not
exclusive
and
8
do
not
preclude
a
person
from
seeking
other
remedies
allowed
9
by
law.
10
EXPLANATION
11
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
12
the
explanation’s
substance
by
the
members
of
the
general
assembly.
13
This
bill
relates
to
the
production
of
oil
and
gas,
14
geologic
hydrogen,
hydrocarbons,
or
other
minerals,
including
15
establishing
certain
duties
required
of
oil
and
gas
operators,
16
requiring
notice
and
surface
use
agreement
offers,
and
17
providing
for
remedies.
The
bill
is
known
as
and
may
be
cited
18
as
the
Iowa
surface
owners
protection
Act.
19
The
bill
applies
to
real
property
and
improvements
on
20
which
oil
and
gas
operations
are
conducted
and
to
oil
and
gas
21
operations
commenced
on
or
after
July
1,
2026,
with
exceptions
22
for
certain
maintenance
and
ongoing
production
activities
at
23
wells
producing
or
capable
of
producing
on
that
date
if
the
24
operator
holds
a
valid
permit,
and
for
operations
conducted
25
within
the
scope
of
agreements
entered
into
before
July
1,
26
2026.
27
The
bill
defines
terms
relating
to
oil
and
gas
operations
28
and
describes
oil
and
gas
operations
to
include
activities
from
29
initial
exploration
through
final
reclamation
of
the
affected
30
surface.
31
The
bill
requires
an
operator
to
compensate
a
surface
owner
32
for
certain
damages
or
losses
resulting
from
oil
and
gas
33
operations.
The
bill
also
requires
an
operator
to
compensate
34
a
farm
tenant
for
crop
damage
or
reduced
crop
yields
and
35
-6-
LSB
6881HV
(3)
91
sb/js
6/
7
H.F.
2702
for
damage
to
leasehold
improvements.
The
bill
requires
1
an
operator
to
reclaim
the
surface
affected
by
oil
and
gas
2
operations
once
operations
are
completed
or
a
well
is
plugged
3
or
closed.
4
The
bill
requires
the
operator
to
provide
at
least
10
5
business
days’
notice
before
beginning
an
activity
that
does
6
not
disturb
the
surface.
At
least
90
days
before
entering
the
7
surface
to
conduct
oil
and
gas
operations,
the
bill
requires
8
the
operator
to
provide
the
surface
owner
with
notice
that
9
includes
information
about
the
planned
operations,
a
copy
10
of
the
Iowa
surface
owners
protection
Act,
operator
contact
11
information,
and
a
proposed
surface
use
and
compensation
12
agreement.
The
bill
requires
the
proposed
agreement
to
address
13
certain
subjects
relating
to
the
oil
and
gas
operations.
If
14
legal
and
equitable
title
are
held
by
different
persons,
the
15
bill
directs
both
persons
to
receive
notice.
16
The
bill
allows
the
surface
owner
to
accept
or
reject
the
17
proposed
agreement.
Failure
to
accept
the
proposed
agreement
18
within
90
days
is
deemed
a
rejection.
If
rejected,
the
surface
19
owner
may
negotiate,
including
through
mediation
if
the
parties
20
agree.
The
bill
allows
the
parties
to
enter
into
a
mutually
21
acceptable
surface
use
and
compensation
agreement
governing
22
surface
activities.
23
If
no
agreement
is
reached
within
90
days
after
the
surface
24
owner
receives
notice,
the
bill
allows
the
operator
to
enter
25
the
property
and
conduct
operations,
but
must
pay
actual
26
damages
for
entry
and
use
of
the
surface.
27
The
bill
provides
remedies
in
court
actions.
If
28
compensation
is
owed,
the
court
may
award
attorney
fees,
29
costs,
and,
in
some
circumstances,
treble
damages
for
certain
30
violations
by
the
operator.
The
bill
also
provides
that
the
31
remedies
in
the
chapter
are
not
exclusive
of
other
remedies
32
allowed
by
law.
33
-7-
LSB
6881HV
(3)
91
sb/js
7/
7