Gov. Kim Reynolds has vetoed a bill aimed at curbing eminent domain use by carbon capture pipelines and other infrastructure projects, saying the legislation is written too broadly and could damage economic development in Iowa.
The veto, one of only a handful this year, deals a blow to the dozens of Republican lawmakers who supported the bill and to landowners who have shown up at the Iowa Capitol for years to call for greater restrictions on eminent domain.
In a veto message included with her rejection of House File 639, Reynolds said, “I’ve consistently said that if eminent domain is used, it must be rare, fair and a last resort.”
“But HF 639 isn’t just about eminent domain,” she said. “It goes much further — and in doing so, sets a troubling precedent that threatens Iowa’s energy reliability, economy and reputation as a place where businesses can invest with confidence.”
House Speaker Pat Grassley calls for special session to override veto
Lawmakers reacted swiftly to Reynolds’ veto, illustrating the deep divide among legislative Republicans over the issue.
House Speaker Pat Grassley, R-New Hartford, released a statement saying he has asked all members of the Iowa Legislature to sign a petition to reconvene for a special session to override Reynolds’ veto.
Overriding a veto requires a two-thirds vote of both the Iowa House and Senate.
“This veto is a major setback for Iowa,” Grassley said. “It is a setback not only for landowners who have been fighting across Iowa, but for the work the House of Representatives has put in for four years to get legislation like HF 639 passed. We will not stop fighting and stand firm on our commitment until landowners in Iowa are protected against eminent domain for private gain.”
House Speaker Pat Grassley, R-New Hartford, has called for a special session to override Gov. Kim Reynolds’ veto of a bill limiting the use of eminent domain for carbon-capture and other pipelines.
House Republican lawmakers have worked for years to pass legislation reining in eminent domain use, only to see their proposals fail to advance in the Senate.
Finally, this year, the GOP-led Senate debated late into the night as 13 Republican senators joined with most Democrats to pass House File 639 over the objection of 21 of their Republican colleagues.
Senate Majority Leader Jack Whitver, R-Grimes, said he supports Reynolds’ veto.
“Based on the votes on that bill in the Iowa Senate, a significant majority of our caucus supports a better policy to protect landowner rights,” Whitver said. “I expect that majority of our caucus would not be interested in any attempt to override her veto.”
Veto represents a win for proposed Summit Carbon Solutions pipeline
The veto is good news for Summit Carbon Solutions, which is proposing to build a $9 billion carbon capture pipeline that would span more than 2,500 miles across several states, including Iowa, and connect 57 ethanol plants and bury carbon dioxide from the plants deep underground.
Bruce Rastetter, Summit’s co-founder, is a prominent Republican Party donor. Rastetter has given Reynolds $175,000 since 2015 in donations and in-kind campaign contributions, according to reports filed with the Iowa Ethics and Campaign Disclosure Board.
The bill would have said hazardous liquid pipelines, including carbon capture pipelines, cannot receive eminent domain powers unless they qualify as common carriers, meaning they can prove they will sell the commodity to an unaffiliated buyer.
It also would have required pipeline companies to carry more insurance for their projects, allows more people to intervene in Iowa Utilities Commission proceedings and requires commission members to be present at more meetings.
“We can do better,” Reynolds wrote in her veto message. “And I’m committed to working with the Legislature to strengthen landowner protections, modernize permitting and respect private property.”
In the meantime, Reynolds said she would direct the Iowa Utilities Commission to implement two of the bill’s provisions: requiring all Iowa Utilities Commission members to be present at hearings on proposed public utility regulations, electric transmission lines and pipelines and at least one commissioner to be present at informational meetings held in counties along the project’s route.
Why was the bill so controversial?
Supporters of the bill, including landowners who are unwilling to sign agreements with Summit, say a private company should not be granted eminent domain powers for a private project that does not serve a public use.
Rep. Steven Holt, R-Denison, one of the bill’s main supporters in the Iowa House, said in a Facebook post that Reynolds “has chosen to ignore landowners, the vast majority of the Legislature, the Republican Party Platform and the Iowa Constitution.”
“I am profoundly disappointed over the governor’s decision to veto HF 639,” Holt wrote. “The Iowa Constitution is clear that the power of eminent domain can be used only for public use projects. The Republican Party of Iowa Platform strongly opposes eminent domain for economic development projects and the CO2 pipeline specifically.”
Opponents of the bill say pipelines like Summit’s are necessary to open new markets for low-carbon ethanol that can be used for sustainable fuel for industries like aviation and shipping.
The Republicans who opposed the law said they believe it will harm Iowa’s economy and land the state in a lawsuit for interfering with a project that has already received approval from the state.
Several of the bill’s requirements apply to hazardous liquid pipelines, which include not just carbon pipelines, but pipelines that transport crude oil, refined petroleum products, liquefied petroleum gases, anhydrous ammonia, liquid fertilizers, alcohols and coal slurries.
“That’s a bill that’s just going to facilitate activists,” Senate President Amy Sinclair, R-Allerton, said June 5 on an episode of “Iowa Press” on Iowa PBS. “And there were so many problems with that and ultimately it will cost the state of Iowa money, both in economic impact as well as potential lawsuit, and I think we have to say those words out loud.”
Ethanol industry cheers Reynolds’ veto
Groups representing the ethanol industry issued a flood of statements thanking Reynolds for her veto.
Monte Shaw, executive director of the Iowa Renewable Fuels Association, said the group is “deeply grateful” to Reynolds for her veto.
“This is a classic example of why our system of government has checks and balances,” Shaw said in a statement. “Any thoughtful review of this bill would determine that it would lead to higher energy prices for Iowans, hamper future economic development, hold back job creation, and stifle new markets for Iowa farmers. IRFA thanks Gov. Reynolds for listening to Iowans, studying the actual legislation, and ignoring the rhetoric that was as inaccurate as it was loud.”
Jeff Broin, founder and CEO of POET, the world’s largest ethanol producer, said the bill “unjustly singles out CO2 projects and sends a dangerous message that Iowa is closed for business.”
“Thank you, Gov. Reynolds, for your steadfast support of family farms and bioethanol producers,” he said in a statement. “At a time when commodity prices are low, these CO2 investments will expand market access for Iowa corn, biofuels and bioproducts across the globe, increasing the value of every bushel of corn and every acre of Iowa cropland. This decision will bring benefits to Iowa farmers for generations to come.”
‘Betrayal of the people’: Republicans, Democrats, landowners criticize Reynolds’ veto
A range of Republican and Democratic lawmakers, political candidates and landowners criticized Reynolds’ veto.
“The governor has failed the state of Iowa,” said Rep. Bobby Kaufmann, R-Wilton. “She has soiled her legacy permanently.”
Kaufmann, who chairs the House Ways and Means Committee responsible for tax policy, called Reynolds’ action “unforgiveable” and said he would work to block her legislative agenda moving forward.
“I vow from this moment on to not allow a single bill that she produces to move forward,” he said. “I will work to kill every single piece of legislation that she initiates.”
David Pautsch, a Republican running against U.S. Rep. Mariannette Miller-Meeks in the 1st Congressional District, called it “a betrayal of the people.”
“The governor slow-walked this bill while lobbyists swarmed Terrace Hill,” he said in a statement. “In the end, she sided with powerful pipeline interests over Iowa farmers. It’s government-sanctioned theft — plain and simple.”
Senate Minority Leader Janice Weiner, D-Iowa City, said she was disappointed in Reynolds’ veto, “but unfortunately I cannot say I’m surprised.”
“There is simply no amount of political posturing or legislative stonewalling that can deny the fact that Iowans’ right to private property should never be infringed upon for private gain,” Weiner said.
House Minority Leader Brian Meyer, D-Des Moines, said “it’s no surprise that Gov. Reynolds has once again sided with her political donors rather than Iowa landowners.”
“Iowa House Democrats and Republicans worked together to protect property rights,” he said. “At the end of the day, there is only one group to blame for the failure of the eminent domain bill: Iowa Republican lawmakers.”
Mary Powell, a landowner in Shelby County, was one of several landowners to condemn Reynolds’ action.
“Gov. Reynolds’ veto of HF 639 let Iowans know that to her the Iowa motto was just empty words,” Powell said in a statement. “Gov. Reynolds chose to support the millionaires and billionaires at the expense of Iowans and their property rights.”
What would the eminent domain bill have done?
If the bill had become law, it would have placed several requirements on hazardous liquid pipelines and the Iowa Utilities Commission.
The bill’s provisions said:
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Hazardous liquid pipelines could not receive eminent domain powers unless they qualify as common carriers, meaning they can prove they will sell the commodity to an unaffiliated buyer.
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Pipeline companies must prove that their project is insured sufficiently to cover any losses or injury from the pipeline construction and any discharge. The company would have to either buy insurance for affected landowners or reimburse them for increased insurance premiums due to the pipeline’s presence.
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All Iowa Utilities Commission members must be present at hearings on proposed public utility regulations, electric transmission lines and pipelines and at least one commissioner must be present at informational meetings held in counties along the project’s route.
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The Iowa Utilities Commission could not renew any permit granted to a liquefied carbon dioxide pipeline and no CO2 pipeline would be allowed to operate longer than 25 years.
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State lawmakers, city and county officials and “any resident with a minimally plausible interest” would be allowed to intervene in Iowa Utilities Commission cases.
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The Iowa Utilities Commission could not file sanctions against intervenors unless the commission determines the intervenor was knowingly dishonest, committed a crime or caused injury to the commission.
(This story has been updated to add new information.)
Stephen Gruber-Miller covers the Iowa Statehouse and politics for the Register. He can be reached by email at sgrubermil@registermedia.com or by phone at 515-284-8169. Follow him on X at @sgrubermiller.
This article originally appeared on Des Moines Register: Kim Reynolds vetoes Iowa eminent domain, carbon capture pipeline bill
