Iowa Natural Gas Laws and Incentives
State Incentives
Alternative Fuel Vehicle (AFV) Demonstration Grants
The Iowa Department of Natural Resources conducts marketing and education outreach to encourage the use of alternative fuels and, contingent upon funding, also awards demonstration grants to individuals who purchase vehicles that operate on alternative fuels, including but not limited to, E85, biodiesel, compressed natural gas, electricity, solar energy, or hydrogen. Grants may be used towards conducting research connected with the fuel or the vehicle. Grants may be used towards the purchase of the vehicle if the Department of Natural Resources retains the title of the vehicle, the vehicle is used for research, and the proceeds from the eventual sale of the vehicle are used for additional research. (Reference Iowa Code 214A.19)
Alternative Fuel Loan Program
The Alternate Energy Revolving Loan Program (AERLP) for alternative energy projects is administered by the Iowa Energy Center. Through a participation agreement with the project lender, the program provides up to half the cost of biomass or alternative fuel production projects, up to a maximum of $1 million per facility. The AERLP funds are provided at 0% interest with the lender's funds bearing market interest. Fuel production facilities must be located in Iowa. Funding is currently limited. (Reference Iowa Code 476.46)
Alternative Fuel Production Loans
The Value-Added Agriculture Program offers a combination of forgivable and traditional low-interest loans for business projects involving the production of alternative fuels. The mixture of forgivable and low-interest loans varies according to the size of the award. Research and development projects are not eligible for this program.
Alternative Fuel Production Tax Credits
The Enterprise Zone Program and the High Quality Jobs Program offer state tax incentives to business projects for the production of biomass or alternative fuels. Depending on the program, incentives may include: an investment tax credit equal to a percentage of the qualifying investment, amortized over five years; a refund of state sales, service, or use taxes paid to contractors or subcontractors during construction; a doubling of the state's refundable research activities credit; additional funding for training new employees; and a local property tax exemption of up to 100% of the value added to the property.
State Laws and Regulations
Alternative Fuel Vehicle (AFV) Acquisition Requirements
A minimum of 10% of new light-duty vehicles purchased by institutions under the control of the state fleet administrator, Iowa Department of Transportation administrator, board of directors of community colleges, state board of regents, commission for the blind, and department of corrections must be capable of using alternative fuels. Vehicles and trucks purchased and directly used for law enforcement, off-road maintenance work, or to pull loaded trailers are exempt from this requirement. (Reference Iowa Code 216B.3, 260C.19A, 262.25A, 307.21 and 904.312A)
Alternative Fuel Vehicle (AFV) Conversion Registration
When a motor vehicle is modified to use a different fuel type or to use more than one fuel type, the person whose name the vehicle is registered under must notify the county treasurer of the new fuel type or alternative fuel types within 30 days. If the vehicle uses, or may use, a special fuel, the county treasurer will issue a special fuel identification sticker. (Reference Iowa Code 321.41)
