ARC 0068D

ARC 0068D

ECONOMIC DEVELOPMENT AUTHORITY[261]

Notice of Intended Action

Proposing rulemaking related to sustainable aviation fuel production tax credit program
and providing an opportunity for public comment

    The Economic Development Authority hereby proposes to adopt new Chapter 80, “Sustainable Aviation Fuel Production Tax Credit Program,” Iowa Administrative Code.

Legal Authority for Rulemaking

    This rulemaking is proposed under the authority provided in Iowa Code sections 15.530 through 15.535.

State or Federal Law Implemented

    This rulemaking implements, in whole or in part, Iowa Code sections 15.530 through 15.535.

Purpose and Summary

    The Authority proposes to adopt a new Chapter 80 to describe the policies and procedures applicable to the Sustainable Aviation Fuel Production Tax Credit Program created pursuant to Iowa Code sections 15.530 through 15.535 as enacted by 2025 Iowa Acts, Senate File 657. The program provides incentives to businesses that produce high-value sustainable aviation fuel from feedstock in Iowa.

Regulatory Analysis

    A Regulatory Analysis for this rulemaking was published in the Iowa Administrative Bulletin on December 10, 2025. A public hearing was held on the following date(s):

     ?   December 30, 2025

Fiscal Impact

     This rulemaking has no fiscal impact to the State of Iowa beyond that of the legislation it is intended to implement.

Jobs Impact

    After analysis and review of this rulemaking, no impact on jobs has been found.

Waivers

    Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Authority for a waiver of the discretionary provisions, if any, pursuant to 261—Chapter 199.

Public Comment

     Any interested person may submit written or oral comments concerning this proposed rulemaking, which must be received by the Authority no later than 4:30 p.m. on March 10, 2026. Comments should be directed to:

Public Hearing

     No public hearing is scheduled at this time. As provided in Iowa Code section 17A.4(1)“b,” an oral presentation regarding this rulemaking may be demanded by 25 interested persons, a governmental subdivision, the Administrative Rules Review Committee, an agency, or an association having 25 or more members.

Review by Administrative Rules Review Committee

    The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6).

    The following rulemaking action is proposed:

    ITEM 1.  Adopt the following new 261—Chapter 80:

CHAPTER 80

SUSTAINABLE AVIATION FUEL PRODUCTION TAX CREDIT PROGRAM

261—80.1(15) Purpose. The purpose of this chapter is to encourage development of the sustainable aviation fuel industry using the SAF program to incentivize new and existing businesses to produce high-value sustainable aviation fuel in Iowa from feedstock.

261—80.2(15) Definitions. As used in this chapter, unless the context otherwise requires:

    “Authority” means the economic development authority created in Iowa Code section 15.105.

    “Director” means the director of the authority.

    “Eligible business” means the same as the definition of “eligible taxpayer” in Iowa Code section 15.531(2).

    “Feedstock” means the same as defined in Iowa Code section 15.531(3) and includes carbon dioxide that is processed or refined in the state of Iowa and suitable for sustainable aviation fuel production without further enhancement.

    “Foreign adversary” means a foreign government or a foreign nongovernment person as determined in 15 CFR §7.4 or 15 CFR §791.4 at any time on or after March 4, 2024, and that is listed in 15 CFR §7.4(a) or 15 CFR §791.4(a) at any time on or after March 4, 2024.

    “Foreign adversary entity” means a foreign business subject to the jurisdiction of or organized under the laws of a foreign adversary or a foreign business owned, directed, or controlled by a foreign adversary.

    “Foreign business” means the same as defined in Iowa Code section 9I.1.

    “Renewable chemical program” means the renewable chemical production tax credit program administered pursuant to Iowa Code sections 15.315 through 15.322 and 261—Chapter 81.

    “SAF program” means the sustainable aviation fuel production tax credit program administered pursuant to Iowa Code sections 15.530 through 15.535 and this chapter.

    “Sustainable aviation fuel” means the same as defined in Iowa Code section 15.531(5).

    “Tax incentives” means the tax credits the authority awards to an eligible business as detailed in the agreement entered into pursuant to Iowa Code section 15.532(2).

261—80.3(15) Eligibility requirements. To be eligible to receive the sustainable aviation fuel production tax credit pursuant to the SAF program, a business shall meet all of the eligibility requirements in Iowa Code section 15.532. Additionally, a foreign business shall demonstrate that it is not associated with a foreign adversary or foreign adversary entity.

261—80.4(15) Application process and review.

    80.4(1) Applications for tax credits may be submitted to the authority electronically by an eligible business from February 15 to March 15 of each calendar year, beginning February 15, 2027. The authority may adjust the annual application period under extenuating circumstances.

    80.4(2) The application shall include the following information, including all information required by Iowa Code section 15.532(1)“e”:

    a.  The amount of sustainable aviation fuel produced in the state of Iowa from feedstock by the eligible business during the immediately previous calendar year, measured in gallons.

    b.  Documentation that sustainable aviation fuel achieves at least a 50 percent life cycle greenhouse gas emissions reduction as determined by either of the following:

    (1)  The method described in Iowa Code section 15.531(5)“a”; or

    (2)  The method described in Iowa Code section 15.531(5)“b.”

Acceptable documentation includes but is not limited to fuel testing conducted by the Iowa Central Fuel Testing Laboratory in Fort Dodge, Iowa.

    c.  The types and sources of feedstock used to produce sustainable aviation fuel, documented in sufficient detail to allow the authority to verify that such feedstock was processed or refined in the state of Iowa.

    d.  The city or county where the plant producing sustainable aviation fuel is located.

    e.  The date on which the eligible business organized, expanded or located in the state of Iowa.

    f.  Any other information reasonably required by the authority in order to establish and verify that the applicant is an eligible business and the amount of the tax credit under the SAF program.

    80.4(3) Applications will be reviewed and scored on a competitive basis by a review committee established by the authority. If the authority deems that additional information is needed before reviewing and scoring can be completed, and the authority makes a written request for additional information from the applicant, the applicant must provide the requested information within 30 days of the date that the written request from the authority was made. If an applicant does not provide the requested information within 30 days, the application may be denied by the authority.

    80.4(4) Applications determined by the authority to be complete and eligible will be reviewed and scored using criteria established by the authority to evaluate the economic impact of an eligible business’s production of sustainable aviation fuel.

    80.4(5) The authority will notify an applicant when the applicant has been approved or denied by the director to receive a tax credit.

261—80.5(15) Agreement and fees. An eligible business approved to receive a tax credit shall enter into an agreement pursuant to Iowa Code section 15.532(2). The eligible business must sign the agreement within 60 days of being notified of approval for the tax credit. Upon request by the eligible business, the authority may extend the time period for signing the agreement by an additional 30 days.

    80.5(1) Upon execution of the agreement and prior to issuance of a tax credit certificate, the eligible business shall remit to the authority a one-time compliance cost fee in the amount of $500.

    80.5(2) For the duration of the agreement and for as long as an eligible business claims tax incentives pursuant to the agreement, the eligible business shall remit to the authority an ongoing compliance cost fee equal to one-half of one percent of the value of the tax incentives claimed pursuant to the agreement. This ongoing compliance fee shall be due and payable upon filing of the eligible business’s tax return for each tax year in which the eligible business claims such tax incentives.

261—80.6(15) Sustainable aviation fuel production tax credit.

    80.6(1) Calculation of tax credit amount.

    a.  An eligible business that has entered into an agreement pursuant to rule 261—80.5(15) may be issued a tax credit certificate in an amount calculated as described in Iowa Code section 15.533(1). The tax credit certificate shall contain the information required by Iowa Code section 15.533(6)“b” and any other information required by the department of revenue.

    b.  If a business has facilities located in more than one state, only the sustainable aviation fuel produced at facilities physically located in the state of Iowa may be counted for the purpose of calculating the tax credit.

    c.  If the same eligible business has an ownership or equity interest in multiple facilities at which sustainable aviation fuel is produced, the facilities under common ownership will be considered a single eligible business for purposes of calculating the maximum tax credit amount. In calculating the maximum tax credit amount, only the pro rata share of each eligible business’s ownership in a facility will be attributed to that eligible business.

    d.  The maximum amount of tax credit that may be issued under the SAF program to an eligible business for the production of sustainable aviation fuel in a calendar year shall not exceed the amount authorized by Iowa Code section 15.533(7)“b”(1).

    80.6(2) Eligible production years only. An eligible business shall not receive a tax credit for sustainable aviation fuel produced before the 2026 calendar year or after the 2035 calendar year.

    80.6(3) Maximum number of credits. An eligible business shall not receive more tax credit certificates under the SAF program than the number specified in Iowa Code section 15.533(7)“b”(2). Each tax credit must be applied for separately, and each application will be reviewed independently of past tax credits. Receipt of a tax credit in one year does not guarantee receipt of a tax credit in a subsequent year.

    80.6(4) Nontransferable. The tax credit certificates are not transferable.

    80.6(5) Termination and repayment. Tax credits may be reduced, terminated, or rescinded pursuant to Iowa Code section 15.532(3).

261—80.7(15) Claiming the tax credit.

    80.7(1) Maximum tax credit claimed. An eligible business that has entered into an agreement pursuant to rule 261—80.5(15) and been issued a tax credit certificate pursuant to subrule 80.6(1) may claim a tax credit as described in Iowa Code section 15.533.

    80.7(2) Claiming the credit. To claim the tax credit, a taxpayer is to include one or more tax credit certificates with the taxpayer’s tax return and otherwise act in accordance with any applicable administrative rules adopted by the department of revenue.

    80.7(3) Refundable. Any tax credit in excess of the tax liability is refundable. In lieu of claiming a refund, a taxpayer may elect to have the overpayment shown on the taxpayer’s final, completed return credited to the tax liability for the following tax year.

261—80.8(15) Additional information. The authority may at any time request additional information and documentation from an eligible business, including but not limited to the operations and economic impact of the eligible business, and the authority may use the information in preparing and publishing any reports to be provided to the general assembly to the extent consistent with Iowa Code sections 15.534 and 15.107B. The authority shall keep confidential any information or record in its possession with respect to the SAF program in accordance with Iowa Code section 15.532(4)“a” except that the identity of a tax credit recipient and the amount of the tax credit shall be considered public information.

261—80.9(15) Relationship to renewable chemical program. Pursuant to Iowa Code section 15.119(2)“b,” the authority may allocate up to $10 million collectively each fiscal year for purposes of the SAF program and the renewable chemical program. The authority board shall determine the amount of such $10 million allocated to each program in a given fiscal year. The authority shall determine whether a business may apply for and receive both a tax credit certificate pursuant to the renewable chemical program and a tax credit certificate pursuant to the SAF program in the same fiscal year. In making this determination, and among other factors, the authority may consider whether a business operates distinct facilities in the state such that a given production of chemicals does not and will not receive the benefits of both a tax credit pursuant to the renewable chemical program and a tax credit pursuant to the SAF program.

These rules are intended to implement Iowa Code sections 15.530 through 15.535.