Read the full stored bill text
Kim Reynolds
governor
Office of the Governor Chris Cournoyer
LT GOVERNOR
June 01, 2026
The Honorable Paul Pate
Secretary of State of Iowa
State Capitol
Des Moines, Iowa 50319
Dear Mr. Secretary,
I hereby transmit:
Senate File 2490, an Act relating to oil and gas production, including filing requirements,
the authority of the department of natural resources, confidential information, pooling
orders, negotiation of surface damage, imposition and distribution of a tax, and
jurisdiction.
The above Senate File is hereby approved on this date.
Kim\eynolds
Governor of Io
cc: Secretary of the Senate
Clerk of the House
STATE CAPITOL DES MOINES, IOWA 50319 515.281.5211 WWW.GOVERNOR.IOWA.GOV
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Senate File 2490
AN ACT
RELATING TO OIL AND GAS PRODUCTION, INCLUDING FILING
REQUIREMENTS, THE AUTHORITY OF THE DEPARTMENT OF NATURAL
RESOURCES, CONFIDENTIAL INFORMATION, POOLING ORDERS,
NEGOTIATION OF SURFACE DAMAGE, IMPOSITION AND DISTRIBUTION
OF A TAX, AND JURISDICTION, AND PROVIDING CIVIL PENALTIES.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
Section 1. Section 8.57A, Code 2026, is amended by adding
the following new subsection:
NEW SUBSECTION . 3A. A severance tax account is created in
the environment first fund. Moneys in the account in a fiscal
year shall be used as appropriated by the general assembly for
purposes of supporting water quality projects.
Senate File 2490, p. 2
Sec. 2. Section 22.7, Code 2026, is amended by adding the
following new subsection:
NEW SUBSECTION . 78. Records received, collected, or
created in the administration of severance tax for oil and gas
production pursuant to section 458A.29, subsection 3.
Sec. 3. Section 458A.2, Code 2026, is amended by adding the
following new subsections:
NEW SUBSECTION . 01. "Casing" means the practice of
providing structural integrity, stability for unstable geologic
formations, and formation isolation, allowing for pressure
control via blowout preventer equipment, and allowing for
flowback if applicable.
NEW SUBSECTION . 2A. "Correlative rights" means the
opportunity afforded to the owner of each property in a pool
to produce, so far as it is reasonably practicable to do so
without waste, a just and equitable share of the oil or gas, or
both, in the pool.
NEW SUBSECTION . 5A. "Exploratory well " means a well drilled
beyond the known producing limits of a pool.
NEW SUBSECTION . 20A. "(fell log" means a record of geologic
formations penetrated by the borehole with respect to both time
and depth during drilling operations.
Sec. 4. Section 458A.4, subsection 1, Code 2026, is amended
by adding the following new paragraph:
NEW PARAGRAPH . Ob. Every person acting as a principal or
agent for another or independently engaged in the production,
storage, transportation, except by railroad, refining,
reclaiming, treating, marketing, or processing of oil or gas,
or engaged in the exploration for or production of metallic
minerals to file the following with the department on or before
April 1 of each year:
(1) The name under which the business is being operated.
(2) The name and contact information of the person,
business, or businesses engaged in the activity.
(3) The plan of organization.
(4) For a corporation, the following filings apply:
(a) The law under which the corporation is chartered.
(b) The names and contact information for any person acting
as a trustee.
Senate File 2490, p. 3
(c) The names of the manager, agent, or executive.
(d) The names and contact information of all officers.
(5) The names and contact information of all owners if the
business is conducted under an assumed name.
Sec. 5. Section 458A.4, subsection 1, paragraph b, Code
2026, is amended to read as follows:
b. The making and filing of all mechanical well logs and
the filing of directional surveys if taken, and the filing of
reports on well location, drilling^ and production, and the
filing free of charge of samples and core chips and of complete
cores less tested sections when requested in the department
within six months after the completion or abandonment of the
well , unless otherwise extended pursuant to section 458A.6A ;
Sec. 6. Section 458A.4, Code 2026, is amended by adding the
following new subsection:
NEW SUBSECTION . 4A. To allow for variances to any of the
department's rules, regulations, or orders. A variance shall
be granted in writing by the director without a hearing upon
written request of an owner or applicant. The owner or the
applicant requesting the variance shall demonstrate that it has
made a good faith effort to comply or is unable to comply with
the specific requirements contained in the rules, regulations,
or orders from which it seeks a variance, and that the
requested variance will not violate the basic intent of this
chapter. Upon proper submission to the director, the director
shall approve or deny the variance request within fourteen days
of receipt. The director shall report any variance granted at
the subsequent hearing or otherwise make public any variance
granted .
Sec. 7. NEW SECTION . 458A.6A Confidential information.
If an owner seeks to submit information that is listed
as confidential, the owner will confer with the department
prior to submitting the information to verify it qualifies
as confidential pursuant to the department's rules or
otherwise under law. If the information is determined to
be confidential, the owner will submit hard copies of the
information in nonredacted form but labeled confidential in a
conspicuous location on the document. Confidential information
shall be maintained as confidential and held without public
Senate File 2490, p. 4
access for a period of five years, unless otherwise extended
by the director for good cause. Confidential information may
include the following:
1. Monetary amounts, payment terms, drilling obligations,
or personal information listed on surface use agreements, oil
and gas leases, or rights-of-way agreements.
2. Information concerning ongoing commercial negotiations
regarding potential or planned routing and location of
off-lease midstream gathering systems or infrastructure.
3. Confidential geological or geophysical well records
pertaining to exploratory wells.
4. Information about a proposed transfer of permits and
assets .
5. Proprietary stimulation or completion chemicals that
qualify as trade secrets.
6. Personal medical information.
7. Commercial information that, if disclosed, would be
likely to cause substantial harm to the competitive position of
the person providing the information.
Sec. 8. Section 458A.7, subsections 3 and 4, Code 2026, are
amended to read as follows:
3. An order establishing spacing units for a pool shall
specify the size and shape of each unit and the location and
number of the permitted w e ll th e r e on wells in accordance with
a reasonably uniform spacing plan. Upon application, if the
director finds that a well drilled at the prescribed location
would not produce in paying quantities, or that surface
conditions would substantially add to the burden or hazard
of drilling such well, the director is authorized to enter
an order permitting -the a well to be drilled at a location
other than that prescribed by such spacing order; however, the
director shall include in the order suitable provisions to
prevent the production from the spacing unit of more than its
just and equitable share of the oil and gas in the pool.
4. An order establishing units for a pool shall cover all
lands determined or believed to be underlaid by the pool, and
may be modified by the director from time to time to include
additional areas determined to be underlaid by the pool. When
found necessary for the prevention of waste, or to avoid the
Senate File 2490 r p. 5
drilling of unnecessary wells or to protect correlative rights,
an order establishing spacing units in a pool may be modified
by the director to increase the size of spacing units in the
pool or any zone of the pool, or to permit the drilling of
additional wells within a spacing unit on a reasonable uniform
plan in the pool, or any zone of the pool. Orders of the
director may be appealed to the department within thirty days.
Sec. 9. Section 458A.7, Code 2026, is amended by adding the
following new subsection:
NEW SUBSECTION . 5. If the department is unable to determine
the existence of a pool and the appropriate acreage to be
embraced within a spacing unit and the shape thereof based
on the evidence introduced at hearing, the department may
establish an exploratory spacing unit for the purpose of
drilling one or more exploratory wells in order to establish
the existence of a pool and the appropriate size and shape of
the spacing unit to be applied for future development of the
pool. In establishing the size and shape of the exploratory
spacing unit, the department may consider the size and shape
of spacing units established by the department for the same
pool or formation in other areas, the size and shape of units
for similar development in other basins, reservoir modeling or
other preliminary data on the pool or formation, and any other
information the department deems relevant.
Sec. 10. Section 458A.8, Code 2026, is amended to read as
follows :
458A.8 Integration of fractional tracts.
1. When two or more separately owned tracts are embraced
within a spacing unit, or when there are separately owned
interests in all or a part of the spacing unit, then the owners
and royalty owners of the tracts may pool their interests
for the development and operation of the spacing unit, in
the absence— of— voluntary pooling-/ — the departm e nt, — upon th e
application of any int e r e st e d p e rson, — s ha-11 enter an ord e r
pooling all int e r es ts -in th e s pae-i-ng-unit for th e d e v e lopm e nt
and operations of th e -unit. — Each pooling order s hall b e
mad e aft e r notic e and h e aring, — and s hall b e upon t-or-ms and
conditions that are — ju s t and r e asonabl e, — and that afford to
th e own e r of each tract or — int e r es t in the spacing unit th e
Senate File 2490, p. 6
opportunity to recow-r-or r e ceive/ without unnec e asa-ry exp e- ns e,
a just and e quitable shar e. — Op e rations incid e nt -to th e
dr-i-lling of a w e ll upon any portion of a spacing unit cov e r e d
by a pooling ord e r shall b e d ee m e d for all purpos e s to b e th e
conduct of the operations upon e ach s e parately owned tract in
th e drilling unit by th e s e veral owners— of the unit. — That
p er-t-ion of th e production allocat e d to e aeh trae-t- included in a
op aeing unit cov e r e d by a pooling- ord e r shall, wh e n produc e d,
b e d ee m e d for^a-1-1-- purposes— to- have be e n produc e d from the tract
by a well drill e d on it.
•2t - Each pooling order shall mak e provision for th e drilling
and op e ration of a we-1-1 on the spacing unit, — and for th e
payment of th e— r e asonable actual cost of the w e ll by th e own e r s
of inter-ests in th e s pacing unit, — plus a r e asonable charg e for
s- up e rvision .- In th e event of any dispute as to such costs,
th e d e partm e nt shall d e t e rmine th e proper costs. - If an owner
shall drill and op e rat e, — or pay the e xpenses of drilling and
operating th e w e ll for — the b e n e f-i-t of others, — th e n ,— t-he own e r
o o— dri-l-l-ing or op e rating shall, upon complying with th e t e rms
of— s e ction 458 A.10, — have a lien on the shar e of production
from th e spacing unit accruing to -the inteor-est of e ach of
th e oth-e-r— own e r s for th e payment of a proportionate s har e of
■the exp e ns es. — All th e- oil and gas subject to the lien shall
b e marketed and- sold and t-h e— pr-eceeds appli e d in payment of
th e e xp e ns e s -s -e cu-r e d by th e li e n as provid e d for in section
■45 8A.10.
2. In the absence of voluntary pooling pursuant to
subsection 1, and only if the producer has identified pools
of existing natural hydrogen within the spacing unit, the
director, upon the application by the owner or owners of not
less than twenty-five percent of the area of the spacing unit,
shall enter an order pooling all interests in the spacing unit
for the development and operation thereof. Any such pooling
order may authorize cost recovery and risk penalties against
nonconsenting owners for a specific well. Each such pooling
order shall be made after notice and hearing and with terms and
conditions that are just and reasonable. Operations incident
to the drilling of a well upon any portion of a spacing unit
covered by a pooling order shall be deemed for all purposes
Senate File 2490, p. 7
to be the conduct of such operations upon each separately
owned tract in the unit by the several owners thereof.
When producedr that portion of the production allocated or
applicable to each tract included in a unit covered by a
pooling order shall be deemed for all purposes to have been
produced from such tract by a well drilled thereon.
3. Each pooling order shall provide for the drilling and
operation of a well in the spacing unit r and for the payment of
the cost thereof, as provided in this subsection. The director
is specifically authorized to provide that the producer shall
be entitled to all production from the well that would be
received by the owner or owners, for whose benefit the well
was drilled or operated, after payment of royalty as provided
in the lease, if any, applicable to each tract or interest or
after payment of the royalty if required under subsection 4,
and obligations payable out of production, until the producers
have been paid the amount due under the terms of the pooling
order or order settling the dispute. In the event of any
disputed cost, the director shall determine the proper cost.
The pooling order shall determine the interest of each owner
in the unit, and may provide that each owner who agrees with
the producer for the payment by the owner of the owner's share
of the costs, unless the owner has agreed otherwise, shall be
entitled to receive, subject to royalty or similar obligations,
the share of the production of the well applicable to the tract
of the nonconsenting owner. Each owner who does not agree
shall be entitled to receive from the producer the owner's
share of the production applicable to the owner's interest
after the producer has recovered the following, subject to the
provisions of subsection 4:
a. One hundred percent of the nonconsenting owner's share
of the cost of any newly acquired surface equipment beyond
the wellhead connections, including stock tanks, separators,
treaters, or pumping equipment and piping, plus one hundred
percent of the nonconsenting owner's share of the cost of
operating the well commencing with first production and
continuing until the nonconsenting owner's relinquished
interest reverts under other provisions in this section.
b. Up to two hundred percent of that portion of the costs
Senate File 2490, p. 8
and expenses of drilling, reworking, deepening or plugging
back, testing, and completing, after deducting any cash
contributions received, and up to two hundred percent of that
portion of the cost of newly acquired equipment in the well,
up to and including the wellhead connections, which would have
been chargeable to the nonconsenting owner if the owner had
participated therein, if the nonconsenting owner's tract or
interest is subject to a lease or other contract for oil and
gas development.
4. During the time the producer is recovering costs from
a nonconsenting owner as authorized in a pooling order issued
pursuant to subsection 2, a nonconsenting owner of a tract or
interest in a spacing unit that is not subject to a lease or
other contract for oil and gas development shall be entitled
to a cost-free royalty interest equal to twelve and one-half
percent .
5. Upon full payment of the recoverable costs as specified
in subsection 3, the following shall occur:
a. Within thirty days the producer shall notify the
nonconsenting owner to offer to the nonconsenting owner the
opportunity to participate under the pooling order as a working
interest owner. The notice shall state that the nonconsenting
owner may elect to participate in the pooling order or may
elect to continue receiving the royalty specified in subsection
4.
b. Within sixty days after receiving notice, the
nonconsenting owner shall inform the producer whether the
nonconsenting owner wishes to make an election to participate
under the pooling order as a working interest owner or continue
receiving the royalty specified in subsection 4.
c. If the nonconsenting owner fails to respond to the notice
within the time specified in paragraph "b" , the nonconsenting
owner shall be deemed to elect to continue receiving the
royalty specified in subsection 4.
d. Within five business days after receiving notice of
election from a nonconsenting owner or upon expiration of the
time specified in paragraph "b", the producer shall notify the
director regarding the nonconsenting owner's election or lack
thereof .
Senate File 2490, p. 9
6. An application for pooling shall provide at least the
following:
a, A certificate of service containing all persons that
have a royalty interest or are owners inside the drilling and
spacing unit.
b, The applicant's interest type in the drilling and spacing
unit .
c. The legal description of the lands and the department
docket number establishing the drilling and spacing unit sought
to be pooled.
d. A statement that two or more separately owned tracts or
separately owned interests in the drilling and spacing unit
have not voluntarily pooled their interests and any valid
pooling order for the drilling and spacing unit.
e. The American petroleum institute well number of the well
subject to the application, if requesting cost recovery or risk
penalties .
f. A list of all nonconsenting owners in the well that the
applicant is seeking cost recovery and risk penalties against
at the time of filing the application.
g, The cost recovery and risk penalties the applicant is
requesting, if any.
7. An applicant shall provide at hearing at least the
following:
a, A copy of the election letter, well proposal, and
authorization for expenditure sent to the owners in the
drilling and spacing unit.
b. The names and interests of all nonconsenting owners and
unleased nonconsenting owners in the well.
c. Evidence to justify the application of a risk penalty.
Sec. 11. NEW SECTION . 458A.26 Permission to enter site —
negotiation of surface damages.
1. Before entering a site that is subject to a pooling
order under section 458A.8, or that is within an exploratory
spacing unit, for purposes of an oil and gas operation, an
operator shall receive written permission from the surface
owner to enter the site. If the surface owner does not grant
written permission to the operator to enter the site, the
operator shall not enter the site for purposes of an oil and
Senate File 2490, p. 10
gas operation.
2. a. Before entering a site that is subject to a pooling
order under section 458A.8, or that is within an exploratory
spacing unit, with heavy equipment for the purpose of drilling,
an operator shall negotiate with the surface owner for the
payment of any damages that may be caused by the drilling
operation. If the parties agree and execute a written contract
for payment of damages, the operator may enter the site to
drill. If the parties do not reach an agreement for payment of
damages, the operator shall not enter the site to drill.
b. Before entering into a negotiation under paragraph "a",
the operator shall provide a written description of the opt-out
procedure described in paragraph "c".
c. A surface owner may decline further communication with
an operator concerning a possible agreement for the payment
of any damage that may be caused by the drilling operation
by providing verbal or written notice to the operator that
states that the surface owner does not wish to discuss the
matter further, and by submitting to the attorney general
notice through mail or electronic means stating the same. Upon
receipt of such notice from the surface owner, the attorney
general shall forward a copy to the operator.
d. After receipt of notice from the surface owner pursuant
to paragraph "c", the operator shall not initiate further
contact with the surface owner for purposes of an agreement
for the payment of any damages that may be caused by the
drilling operation, except that the operator shall continue to
provide the surface owner with notices otherwise required by
law. The surface owner may rescind such refusal by contacting
the operator and notifying the attorney general through mail
or electronic means. Unless the surface owner rescinds the
refusal, the surface owner's land shall be deemed unavailable
for an agreement.
e. An operator violating the contact prohibition in
paragraph is subject to a civil penalty of not less than ten
thousand dollars for each violation.
3. For purposes of this section, "oil and gas operation"
means the same as defined in section 458A.30.
Sec. 12. NEW SECTION . 458A.27 Imposition of tax — tax rate
Senate File 2490, p. 11
— valuation taxpayers.
1. For the privilege of severing or extracting oil or gas
from the lands within the state, there is levied a severance
tax on the value of the oil and gas extracted, which shall be in
addition to any other taxes imposed by law.
2. The severance tax shall be six percent of the fair market
value of the oil or gas upon extraction at the wellhead.
3. Expenses incurred by the producer prior to valuation are
not deductible from taxable value.
4. When ownership of oil or gas produced is shared, each
owner shall be responsible for payment of its proportionate
share of severance tax. A taxpayer paying severance tax on oil
or gas production may deduct the taxes paid from any royalty
or other amounts due or to become due to the interest owners of
such production, in proportion to the interest ownership, in
which case the person receiving the royalty or other payment
shall not be liable for severance tax.
5. The department of revenue may adopt rules pursuant to
chapter 17A to administer this section.
Sec. 13. NEW SECTION . 458A.28 Revenue distribution.
1. Revenues received from the severance tax collected
pursuant to section 458A.27 shall be distributed as follows:
a. (1) The severance tax revenues shall be distributed to
counties as follows:
(a) Nine and nine-tenths percent of severance tax revenue
each year shall be distributed to each county in the state in
proportion to the county's share of total state population
according to the most recent federal decennial census.
(b) Five percent of severance tax revenue each year shall be
distributed to the counties in which land is located from which
oil or gas is produced in proportion to each county's share of
the value of oil and gas production for that year.
(2) Distributions to counties under this paragraph shall be
used exclusively for any of the following purposes:
(a) To construct and maintain county roads.
(b) To offset county property tax collections. For
distributions used for purposes of this subparagraph division,
the county shall adopt a corresponding levy rate reduction.
b. Five percent of severance tax revenue each year shall be
Senate File 2490, p. 12
deposited in the road use tax fund established under section
312.1.
c. (1) Ten percent of severance tax revenue each year
shall be deposited in the severance tax account within the
environment first fund established under section 8.57A
for purposes of supporting the water quality initiative
administered by the division pursuant to section 466B.42,
including salaries, support, maintenance, and miscellaneous
purposes, including as provided in this paragraph,
notwithstanding section 8.57A, subsection 3.
(2) (a) The moneys deposited pursuant to this paragraph
shall be used to support demonstration projects in
subwatersheds as designated by the department of agriculture
and land stewardship that are part of high-priority watersheds
identified by the water resources coordinating council.
(b) The moneys deposited pursuant to this paragraph shall be
used to support demonstration projects in watersheds generally,
including regional watersheds, as designated by the division,
and high-priority watersheds identified by the water resources
coordinating council.
(3) In supporting projects in watersheds and subwatersheds
as provided in subparagraph (2), all of the following apply:
(a) The demonstration projects must utilize water quality
practices as described in the Iowa nutrient reduction strategy
as defined in section 455B.171.
(b) The division shall implement demonstration projects
as provided in subparagraph division (a) by providing
for participation by persons who hold a legal interest in
agricultural land used in farming. To every extent practical,
the division shall provide for collaborative participation by
such persons who hold a legal interest in agricultural land
located within the same subwatershed.
(c) The division shall implement demonstration projects on
a cost-share basis as determined by the division. Except for
edge-of-f ield practices, the state's share of the amount shall
not exceed fifty percent of the estimated cost of establishing
the practice as determined by the division or fifty percent
of the actual cost of establishing the practice, whichever is
less .
Senate File 2490, p. 13
(d) The demonstration projects shall be used to educate
other persons about the feasibility and value of establishing
similar water quality practices. The division shall promote
field day events for purposes of allowing interested persons to
establish water quality practices on such persons' agricultural
land.
(e) The division shall conduct water quality evaluations
within supported subwatersheds. Within a reasonable period
after accumulating information from such evaluations, the
division shall create an aggregated database of water quality
practices. Any information identifying a person holding a
legal interest in agricultural land or specific agricultural
land shall be a confidential record.
(4) The moneys deposited pursuant to this paragraph shall
be used to support education and outreach in a manner that
encourages persons who hold a legal interest in agricultural
land used for farming to implement water quality practices,
including the establishment of such practices in watersheds
generally, and not limited to subwatersheds or high-priority
watersheds.
(5) The moneys deposited pursuant to this paragraph may be
used to contract with persons to coordinate the implementation
of efforts provided in this paragraph.
(6) The moneys deposited pursuant to this paragraph may be
used by the department of agriculture and land stewardship to
support urban soil and water conservation efforts, which may
include but are not limited to management practices related to
bioretention, landscaping, the use of permeable or pervious
pavement, and soil quality restoration. The moneys shall be
allocated on a cost-share basis as provided in chapter 161A.
(7) Notwithstanding any other provision of law to the
contrary, the department of agriculture and land stewardship
may use moneys deposited pursuant to this paragraph to carry
out the provisions of this paragraph on a cost-share basis
in combination with other moneys available to the department
of agriculture and land stewardship from a state or federal
source.
(8) Not more than ten percent of the moneys deposited
pursuant to this paragraph may be used for costs of
Senate File 2490, p. 14
administration and implementation of the water quality
initiative administered by the division.
d. Seventy and one-tenth percent of severance tax revenue
each year shall be deposited in the taxpayer relief fund
established under section 8.57E.
e. Distributions to the counties and to the funds under
this subsection shall be made quarterly in an amount equal
to one-fourth of the estimate of annual total severance tax
revenues estimated for the current fiscal year by the revenue
estimating committee. The share for producing counties shall
be calculated using county production data from the prior
fiscal year's severance tax returns.
2. By September 15 of each year, the department of
revenue shall report actual earnings for the months of
the preceding fiscal year for which estimates were used in
computing distributions. The department of revenue shall make
adjustments to distributions during the current fiscal year in
an amount equal to the difference between revenues earned and
actual distributions for the preceding fiscal year.
3. For purposes of this section, "di vision " means the
division of soil conservation and water quality created within
the department of agriculture and land stewardship pursuant to
section 159.5.
Sec. 14. NEW SECTION . 458A.29 Administration
confidentiality .
1. The department of revenue shall annually value and
assess oil or gas production for taxation, in appropriate unit
measures, at the fair market value of the product, after the
mining is completed or the oil or gas is extracted at the
wellhead .
2. Annually, on or before June 1, or as soon thereafter
as the fair market value is determined under subsection 1,
the department of revenue shall certify the valuation of the
product to the county assessor of the county from which the oil
or gas was produced, and such valuation shall be entered upon
the assessment rolls of the county.
3. Records received, collected, or created in the
administration of the severance tax shall be confidential as
follows :
Senate File 2490, p. 15
a. All taxpayer returns and return information shall be
confidential and, except as authorized below, no current or
former official, officer, employee, or agent of the state or
any political subdivision thereof shall disclose any such
information obtained in the course of service as an official,
officer, employee, or agent. Taxpayer returns and return
information shall include without limitation all statements,
reports, summaries, and all other data and documents under
audit or provided by the taxpayer in accordance with the
provisions of this chapter regarding severance tax.
b. Without written authorization from the taxpayer, no
current or former official, officer, employee, or agent of
the state or any political subdivision thereof shall release
taxpayer returns and return information pertaining to taxes
imposed by this chapter, except for any of the following
reasons :
(1) Information may be released to employees of the
department of revenue and employees of the department of
justice for official purposes.
(2) Upon prior notice to the taxpayer, information may
be released by the department of revenue, upon written
application, to any other governmental entity if the entity
shows sufficient reason to obtain the information for official
business, subject to execution of a confidentiality agreement.
(3) Information shall be admissible in court or
administrative proceedings related to the severance tax or
other taxes on oil or gas production or on income of producers
or owners, or royalties.
c. Units of production reported by the taxpayer and the
taxpayer's taxable value are not confidential and may be
released.
4. Violations of this section shall be subject to the same
prohibitions and penalties that apply to other violations of
confidentiality requirements applicable to data and records
in the custody of the department of revenue for purposes of
carrying out its duties.
Sec. 15. NEW SECTION . 458A.30 Exclusive jurisdiction and
express preemption.
1. For purposes of this section:
Senate File 2490 r p. 16
a. '‘'Commercially reasonable" means a condition that would
allow a reasonably prudent operator to fully, effectively, and
economically exploit, develop, produce, process, and transport
oil and gas, as determined based on the objective standard of
a reasonably prudent operator and not on an individualized
assessment of an actual operator's capacity to act.
b. '‘'Oil and gas operation" means an activity associated
with the exploration, development, production, processing,
and transportation of oil and gas, including drilling,
testing, geological sampling, boring, excavation, hydraulic
fracture stimulation, completion, maintenance, reworking,
recompletion, disposal, plugging and abandonment, secondary and
tertiary recovery, geophysical surveys related to oil and gas
development, and remediation activities.
2. An oil and gas operation is subject to the exclusive
jurisdiction of this state. Except as provided in subsection
3, a county, city, or other political subdivision shall not
enact or enforce an ordinance or other measure, or an amendment
or revision of an ordinance or other measure, that bans,
limits, or otherwise regulates an oil and gas operation within
the boundaries or jurisdiction of the respective county, city,
or political subdivision.
3. The authority of a county, city, or other political
subdivision to regulate an oil and gas operation is expressly
preempted, except that a county or city may enact, amend, or
enforce an ordinance or other measure if the ordinance or other
measure does all of the following:
a. Only regulates activity related to an oil and gas
operation that occurs at or above the surface of the ground
and concerns governing fire and emergency response, traffic,
lights, or noise, or imposes notice or reasonable setback
requirements.
b. (1) Is commercially reasonable.
(2) An ordinance or other measure is considered prima facie
to be commercially reasonable if the ordinance or other measure
has been in effect for at least five years and has allowed the
oil and gas operations at issue to continue during that period.
c. Does not prohibit or effectively prohibit an oil and gas
operation conducted by a reasonably prudent operator.
Senate File 2490, p. 17
d. Is not otherwise preempted by state or federal law.
Sec. 16. REPEAL. Section 458A.6, Code 2026, is repealed.
AMY SINCLAIR PAT GRASSLE
President of the Senate Speaker of the House
I hereby certify that this bill originated in the Senate and
is known as Senate File 2490, Ninety-first General Assembly.
W. CHARLES SMITHSON
Approved 2026
Secretary of the Senate
KIM REYNOLDS
Governor