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HF 2786

A bill for an act modifying the sales or use tax refund for biodiesel production.

2025-2026 Regular Session

The bill increases biodiesel refund from 4 to 5 cents per gallon and extends the program's end date to January 1, 2031.

Read first time, attached to SF 2503.
#biofuels #processingandproduction #salestaxes #taxrefunds #usetaxes
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WeVote Research Nonpartisan
Bill Summary · HF 2786

Summary of Bill HF 2786 (2025-2026) – Iowa

Purpose

HF 2786 proposes to modify the sales or use tax refund for biodiesel production in Iowa. Specifically, it increases the per-gallon refund rate and extends the expiration date for the refund program.

Key Provisions

  • Refund rate increase:

    • Current designated rate: 4 cents per gallon of biodiesel produced in Iowa.
    • New designated rate under the bill: 5 cents per gallon.

  • Calculation of the refund:

    • The refund amount is calculated by multiplying the designated rate by the total number of gallons of biodiesel produced by the biodiesel producer in Iowa during each quarter of the calendar year.
    • This means the refund is computed on a quarterly basis using the producer’s quarterly production.

  • Expiration/repeal date:

    • Under current law, the biodiesel refund is repealed January 1, 2028.
    • HF 2786 proposes to repeal (i.e., end) the refund on January 1, 2031 instead of 2028, effectively extending the program by about three years.

Who is Affected

  • Biodiesel producers in Iowa:

    • Eligible to receive the sales or use tax refund for biodiesel produced in-state.
    • The refund per gallon increases from 4 cents to 5 cents, improving the financial benefit of production.

  • State tax administration:

    • Requires adjustment to reflect the higher refund rate and the extended sunset date, including quarterly calculation and reporting of biodiesel production by producers.

Administrative and Timeline Details

  • Effective scope and timing:

    • The design of the refund remains based on quarterly production in Iowa.
    • The increase to 5 cents per gallon applies to biodiesel produced in the state during each quarter, and refunds would continue under the new expiration date.

  • Repeal date:

    • The program would now terminate on January 1, 2031, rather than January 1, 2028 under the prior framework.

Potential Impacts

  • Economic impact for producers:

    • Increased refund rate (from 4¢ to 5¢ per gallon) may improve after-tax economics or cash flow for Iowa biodiesel producers, potentially supporting production levels domestically.

  • Budgetary considerations:

    • The state would commit more public funds per gallon refunded due to the higher rate, and would extend the program duration to 2031, affecting long-term budgeting for the tax refund program.

This summary outlines the bill’s main intent, substantive changes, affected parties, and key procedural/temporal aspects. If you’d like, I can compare HF 2786 to the current law or to the companion SF 2275 to highlight alignment or differences.

Compiled from official sources — confirm details with the bill’s official record.

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