INDIANAPOLIS — The Indiana Soybean Alliance (ISA) has two bills it considers tops in this year’s Indiana legislative session. 

ISA’s priority bills are SB 254 which provides a biofuels tax incentive for fuel retailers and SB 461 which makes numerous changes within the Indiana Grain Buyers and Warehouse Licensing Agency (IGBWLA). Here’s a closer look.

SB 461 addresses a complex set of issues. The Indiana Grain Buyers and Warehouse Licensing Agency (IGBWLA) was established in 1975 to ensure the financial integrity of the grain marketing industry. It was created after the collapse of a large commercial grain operation, leaving some Indiana farmers uncompensated. The Agency is responsible for licensing and compliance of commercial grain operators. It oversees more than 200 companies that operate approximately 350 facilities across the state.

SB 461 is sponsored by Sens. Jean Leising and Susan Glick. SB 461 was assigned to the Agriculture Committee; Sen. Leising is Chair of that Committee. Sen. Glick is also a member. Sen. Leising called SB 461 “the most important bill this session.”

A central aspect of the Agency’s work is oversight and operation of the Indiana Grain Indemnity Program, established in 1995. This program includes an indemnity fund, paid for via a premium equal to two-tenths percent (0.2%) of the price on all marketed grain that is sold in Indiana. The program pays farmers (at least those who don’t opt out of the program) if they are economically damaged by the financial failure of a licensed grain buyer. Fortunately, the fund has only had to pay out 12 times in its history and if the fund stays between $20 million and $25 million farmers do not pay the 0.2% premium.

Farmers store grain with a commercial operator because they may not have sufficient storage on site. Or they may want to wait for better prices. There are risks, of course, once an asset is moved offsite and placed under someone else’s control. Ag prices fluctuate and an operator’s wrong moves can hit farmers hard.

At a January 27 Ag Committee meeting Sen. Leising explained that fallout from a storage failure about five years ago prompted the development of SB 461.

Josh Trenary is CEO of the trade group Indiana Pork. At the January 27 Senate Ag Committee hearing, he provided background and context regarding SB 461. This extensive work, he explained, is the product of a task force that started meeting last June and worked through the end of the year, completing its work barely in time to have a draft bill ready in 2025. The Task Force included farmers, grain operators and state agency personnel. Their goal was to create new regulations that would provide confidence for all market participants, that would be wholistic, delete piecemeal and unclear references and directives and deliver a document that all groups would find acceptable and fair.

Trenary highlighted a number of changes in the new bill:

Clarity and specificity regarding monetary risk factors that indicate when a grain operator is in trouble and the state needs to step in.

The state can require remedial action in 90 days. If problems are extreme, the state can revoke an operator’s license. For the state, Trenary said, “there is no more standing on the sidelines.”

Rules were moved into the state statutes thereby making all requirements more direct and less negotiable. 

At the January 27 hearing, there was extensive support from others across this agricultural sector. Bruce Kettler is President and CEO of the Agribusiness Council of Indiana, a membership organization representing companies that handle grain, feed, seed, plant food and agricultural chemicals. Kettler spoke in favor of the extensive revisions to grain fund operations. His Council members liked that the bill offers everyone more certainty regarding finance, timelines and metrics to evaluate performance and assess possible problems.

In similar comments, staff from Indiana’s Department of Agriculture spoke in support of the bill, as did the Farm Bureau. One witness at the hearing noted that the indemnity fund is an asset for Indiana farmers, that it is unique and something that other states have tried to emulate. Farmers will be in a stronger position because of SB 461, one witness told the Committee.

On Feb. 6, SB 461 took a significant step forward: it was passed unanimously out of Committee. In a press release Sen. Leising commented:

“We have made great strides to protect farmers’ livelihoods through Indiana’s Grain Indemnity Fund. This bill builds on the work we have already done by ensuring grain dealers responsibly manage their operations for years to come.”

The bill now moves to the full Senate. In the House, the matching bill is HB 1419. It had a first hearing on January 13.

The goal of SB 254 is straightforward: to build demand for soybeans which can then be converted into fuel to be mixed with gasoline. About 300 million pounds of Indiana’s soybean oil goes to biodiesel production annually.

Brian Warpup is a soybean and corn farmer in Huntington and Wells Counties. He is also serving this year as ISA’s Membership and Policy Committee chairman. On Feb. 4 Warpup testified in support of SB 254 at a hearing of the Senate’s Tax and Fiscal Policy Committee.

“I support the biofuels tax incentive for retailers so that Hoosier farmers can see an increase in demand for our soybeans,” he said. We rely very heavily on export markets for our soybeans. These markets can be very volatile and, at times, unreliable. We need to build demand for soybeans right here in Indiana and SB 254 is a big step in that effort.”

Motor fuels containing 15% ethanol (E85) are sold at 101 retail locations in Indiana, according to ISA; that’s just a fraction of more than 3,000 gas stations in the State. B6+ is diesel fuel containing 6% biodiesel mixed with standard diesel. Last year, ISA surveyed 199 fuel retailers, just 54 of them sold B6+. In-state demand has a lot of room to grow.

For E85, SB 254 provides an income tax credit for taxpayers who own fueling stations that sell the higher ethanol blend. For biodiesel, the credit is extended to diesel retail dealers, distributors and blenders in Indiana. The new tax allowance could have a $10,000 impact, for each fuel, on the State’s general fund, according to an analysis by the Indiana Legislative Services Agency Office of Fiscal and Management Analysis. The credit would take effect in 2026 and expire in 2027.

After the hearing on February 4, the Bill was voted favorably out of Committee. There is a matching bill in the House – HB 1127 but it has not progressed as far as the Senate version. HB 1127 had a first reading in the Ways and Means Committee on January 8.