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Senate passes bill limiting forced pooling, setting severance tax for hydrogen exploration
Summary
The Iowa Senate passed Senate File 2490 to restrict forced pooling for subsurface hydrogen exploration, require consenting landowners (with a 25% threshold for pooled orders), add protections and cost-recovery rules for landowners, and impose a severance tax with specified revenue splits.
Senator Bussello (Senator from Polk) opened the floor debate on Senate File 2490, calling it “an important bill that is necessary and much needed for Iowa landowners, Iowa communities, and the state of Iowa.” He repeatedly stressed that “There’s no eminent domain in this bill,” and described several protections for surface and subsurface owners, including a requirement that pooling and exploration can occur only with consenting landowners or if at least 25% of landowners in a spacing unit consent to seek a forced pooling order from the Department of Natural Resources.
Several senators raised objections before the final vote. Senator Petersen said she would oppose the bill, citing confidentiality provisions and the decision to route revenue to the taxpayer relief fund rather than the general fund: “I’m not gonna be supporting it today.” Senator Zimmer argued the Iowa Geological Survey appears excluded from the bill’s confidentiality regime and warned that a five-year moratorium on data release was contrary to existing administrative rules: “They are totally cut out of this completely.” Senator Kornbach urged delay for broader public discussion and said revenue should go to the general fund, citing the state’s large projected deficits. Senator Blake explained mineral-law background and said he would vote yes despite concerns.
The bill also specifies cost-recovery and royalty-sharing rules the sponsor described on the floor: consenting companies may recover 100% of their costs before royalty payments; for nonconsenting owners companies must recover 200% of costs before distributing 12.5% proportional shares to landowners. The sponsor outlined a severance tax distribution plan that would send 10% to water-quality efforts, 70.1% to the taxpayer relief fund, 5% to producing counties, with the remainder distributed across all 99 counties.
On final passage the Senate recorded 32 ayes and 15 nays; the presiding officer declared the bill passed and unanimous consent was granted to immediately message Senate File 2490 to the House.
Provenance: topicintro SEG 009; topfinish SEG 689.
