Every person within this state retailing gasoline, benzine, and other similar types of high explosives in less than carload lots shall deliver the same to the purchaser only in containers or portable tanks painted vermillion red and having the word gasoline, benzine, or whatever name such explosive is known by plainly printed on it in English. All such words shall be in letters sufficiently large to attract attention.

For the purposes of sections 66-103 to 66-106, containers or portable tanks shall mean containers or portable tanks which conform to standards which the State Fire Marshal shall adopt and promulgate by rules and regulations. The State Fire Marshal may adopt the standards, or any part of such standards, recommended for containers or portable tanks by the National Fire Protection Association.

Every person within this state purchasing gasoline or other high explosives of that nature for his or her own use shall procure and keep the same only in containers or portable tanks painted and stamped as required by section 66-103. This section and section 66-103 shall not affect sales, purchase, or the keeping for use of such explosives if the quantity is one quart or less.

No person shall deliver kerosene, or what is known as coal oil, in any container or portable tank painted or stamped as provided by section 66-103.

No person keeping for use or using kerosene, otherwise known as coal oil, shall put or keep the same in any container or portable tank painted or stamped as provided by section 66-103.

Any person violating any of the provisions of sections 66-103 to 66-106 shall upon conviction be guilty of a Class III misdemeanor.

Sections 66-201 to 66-204 shall be known and may be cited as the Nebraska Clean-burning Motor Fuel Development Act.

For purposes of the Nebraska Clean-burning Motor Fuel Development Act:

(1) Flex-fuel dispenser means a fuel dispenser that is certified by the manufacturer for use with ethanol blended fuels containing at least fifteen percent by volume ethanol;

(2) Motor vehicle means a motor vehicle originally designed by the manufacturer to operate lawfully and principally on highways, roads, and streets;

(3) Qualified clean-burning motor vehicle fuel means a hydrogen fuel cell, compressed natural gas, liquefied natural gas, liquefied petroleum gas, or gasoline containing at least fifteen percent by volume ethanol; and

(4) Qualified clean-burning motor vehicle fuel property means:

(a) New equipment that:

(i) Is installed:

(A) By a certified installer;

(B) On a motor vehicle registered pursuant to the Motor Vehicle Registration Act; and

(C) To convert a motor vehicle propelled by gasoline or diesel fuel to be propelled by a qualified clean-burning motor vehicle fuel as part of a dedicated bi-fuel or dual-fuel system;

(ii) Is approved by the United States Environmental Protection Agency under 40 C.F.R. part 85, subpart F, and 40 C.F.R. part 86, subpart S, as such subparts existed on January 1, 2015; and

(iii) Has not been used to modify or retrofit any other motor vehicle propelled by gasoline or diesel fuel;

(b) With respect to a motor vehicle that was originally equipped to be propelled by a qualified clean-burning motor vehicle fuel other than ethanol, the portion of the basis that is attributable to the:

(i) Storage of the qualified clean-burning motor vehicle fuel;

(ii) Delivery of the qualified clean-burning motor vehicle fuel to the motor vehicle's engine; and

(iii) Exhaust of gases from the combustion of the qualified clean-burning motor vehicle fuel; or

(c) New property that:

(i) Is directly related to the dispensing of ethanol-blended fuels containing at least fifteen percent by volume ethanol or the compression and delivery of natural gas from a private home or residence for noncommercial purposes into the fuel tank of a motor vehicle propelled by compressed natural gas; and

(ii) Has not been previously installed or used at another location to refuel motor vehicles powered by natural gas.

(1) The Department of Environment and Energy shall offer a rebate for qualified clean-burning motor vehicle fuel property.

(2)(a) The rebate for qualified clean-burning motor vehicle fuel property as defined in subdivisions (4)(a) and (b) of section 66-202 is the lesser of fifty percent of the cost of the qualified clean-burning motor vehicle fuel property or four thousand five hundred dollars for each motor vehicle.

(b) A qualified clean-burning motor vehicle fuel property is not eligible for a rebate under this section if the person or entity applying for the rebate has claimed another rebate or grant for the same motor vehicle under any other state rebate or grant program.

(3) The rebate for qualified clean-burning motor vehicle fuel property as defined in subdivision (4)(c) of section 66-202 is the lesser of fifty percent of the cost of the qualified clean-burning motor vehicle fuel property or two thousand five hundred dollars for each qualified clean-burning motor vehicle fuel property.

(4) No qualified clean-burning motor vehicle fuel property shall qualify for more than one rebate under this section.

(1) The Clean-burning Motor Fuel Development Fund is created. The fund shall consist of grants, private contributions, and all other sources.

(2) The fund shall be used by the Department of Environment and Energy to provide rebates under the Nebraska Clean-burning Motor Fuel Development Act up to the amount transferred under subsection (3) of this section. No more than thirty-five percent of the money in the fund annually shall be used as rebates for flex-fuel dispensers. The department may use the fund for necessary costs in the administration of the act up to an amount not exceeding ten percent of the fund annually.

(3) Within five days after August 30, 2015, the State Treasurer shall transfer five hundred thousand dollars from the General Fund to the Clean-burning Motor Fuel Development Fund to carry out the Nebraska Clean-burning Motor Fuel Development Act.

(4) Any money in the fund available for investment shall be invested by the state investment officer pursuant to the Nebraska Capital Expansion Act and the Nebraska State Funds Investment Act.

(5) The State Treasurer shall transfer two hundred thousand dollars from the Clean-burning Motor Fuel Development Fund to the General Fund on or before June 30, 2018, on such dates and in such amounts as directed by the budget administrator of the budget division of the Department of Administrative Services.

For purposes of sections 66-301 to 66-304:

(1) Covered electric generating unit means a fossil fuel-fired electric generating unit existing within the state prior to August 30, 2015, that is subject to regulation under the federal emission guidelines;

(2) Federal emission guidelines means any final rules, regulations, guidelines, or other requirements that the United States Environmental Protection Agency may adopt for regulating carbon dioxide emissions from covered electric generating units under section 111(d) of the federal Clean Air Act, 42 U.S.C. 7411(d);

(3) State means the State of Nebraska; and

(4) State plan means any plan to establish and enforce carbon dioxide emission control measures that the Department of Environment and Energy may adopt to implement the obligations of the state under the federal emission guidelines.

The Department of Environment and Energy shall not submit a state plan for regulating carbon dioxide emissions from covered electric generating units to the United States Environmental Protection Agency until the department has prepared a report as required in section 66-303. Nothing in this section shall prevent the department from complying with federally prescribed deadlines.

(1) The Department of Environment and Energy shall also prepare a report that assesses the effects of the state plan for regulating carbon dioxide emissions from covered electric generating units on:

(a) The electric power sector, including:

(i) The type and amount of electric generating capacity within the state that is likely to retire or switch to another fuel;

(ii) The stranded investment in electric generating capacity and other infrastructure;

(iii) The amount of investment necessary to offset retirements of electric generating capacity and maintain generation reserve margins;

(iv) Potential risks to electric reliability, including resource adequacy risks and transmission constraints; and

(v) The amount by which retail electricity prices within the state are forecast to increase or decrease; and

(b) Employment within the state, including direct and indirect employment effects within affected sectors of the state's economy.

(2) The department shall complete the report required under this section at least thirty days prior to submitting the state plan prepared pursuant to section 66-302 and shall electronically submit to the Legislature a copy of such report.

(3) If the Legislature is in session when it receives the report, the Legislature may vote on a nonbinding legislative resolution endorsing or disapproving the state plan based on the findings of the report.

Upon submitting a state plan to the United States Environmental Protection Agency, the Department of Environment and Energy shall electronically submit to the Legislature a copy of the state plan.

For purposes of sections 66-482 to 66-4,149:

(1) Agricultural ethyl alcohol means ethyl alcohol produced from cereal grains or agricultural commodities grown within the continental United States and which is a finished product that is a nominally anhydrous ethyl alcohol meeting American Society for Testing and Materials D4806 standards. For the purpose of sections 66-482 to 66-4,149, the purity of the ethyl alcohol shall be determined excluding denaturant, and the volume of alcohol blended with gasoline for motor vehicle fuel shall include the volume of any denaturant required pursuant to law;

(2) Alcohol blend means a blend of agricultural ethyl alcohol in gasoline or other motor vehicle fuel, such blend to contain not less than five percent by volume of alcohol;

(3) Biodiesel means mono-alkyl esters of long-chain fatty acids derived from vegetable oils or animal fats which conform to American Society for Testing and Materials D6751 specifications for use in diesel engines. Biodiesel refers to the pure fuel before blending with diesel fuel;

(4) Biodiesel facility means a plant which produces biodiesel;

(5) Biomass feedstock means sugar, starch, polysaccharide, glycerin, lignin, fat, grease, or oil derived from plants, animals, or algae or a protein capable of being converted to a building block chemical by means of a biological or chemical conversion process;

(6) Commercial electric vehicle charging station has the same meaning as in section 70-1001.01;

(7) Commercial electric vehicle charging station operator has the same meaning as in section 70-1001.01;

(8) Compressed fuel has the same meaning as in section 66-6,100;

(9) Department means the Department of Revenue;

(10) Diesel fuel means all combustible liquids and biodiesel which are suitable for the generation of power for diesel-powered vehicles, except that diesel fuel does not include kerosene;

(11) Distributor means any person who acquires ownership of motor fuels directly from a producer or supplier at or from a barge, barge line, pipeline terminal, or ethanol or biodiesel facility in this state;

(12) Ethanol facility means a plant which produces agricultural ethyl alcohol;

(13) Exporter means any person who acquires ownership of motor fuels from any licensed producer, supplier, distributor, wholesaler, or importer exclusively for use or resale in another state;

(14) Gross gallons means measured gallons without adjustment or correction for temperature or barometric pressure;

(15) Highway means every way or place generally open to the use of the public for the purpose of vehicular travel, even though such way or place may be temporarily closed or travel thereon restricted for the purpose of construction, maintenance, repair, or reconstruction;

(16) Importer means any person who owns motor fuels at the time such fuels enter the State of Nebraska by any means other than barge, barge line, or pipeline. Importer does not include a person who imports motor fuels in a tank directly connected to the engine of a motor vehicle, train, watercraft, or airplane for purposes of providing fuel to the engine to which the tank is connected;

(17) Kerosene means kerosene meeting the specifications as found in the American Society for Testing and Materials publication D3699 entitled Standard Specification for Kerosene;

(18) Motor fuels means motor vehicle fuel, diesel fuel, aircraft fuel, or compressed fuel;

(19) Motor vehicle has the same meaning as in section 60-339;

(20) Motor vehicle fuel includes all products and fuel commonly or commercially known as gasoline, including casing head or natural gasoline, and includes any other liquid and such other volatile and inflammable liquids as may be produced, compounded, or used for the purpose of operating or propelling motor vehicles, motorboats, or aircraft or as an ingredient in the manufacture of such fuel. Motor vehicle fuel includes agricultural ethyl alcohol produced for use as a motor vehicle fuel. Motor vehicle fuel does not include the products commonly known as methanol, kerosene oil, kerosene distillate, crude petroleum, naphtha, and benzine with a boiling point over two hundred degrees Fahrenheit, residuum gas oil, smudge oil, leaded automotive racing fuel with an American Society of Testing Materials research method octane number in excess of one hundred five, and any petroleum product with an initial boiling point under two hundred degrees Fahrenheit, a ninety-five percent distillation (recovery) temperature in excess of four hundred sixty-four degrees Fahrenheit, an American Society of Testing Materials research method octane number less than seventy, and an end or dry point of distillation of five hundred seventy degrees Fahrenheit maximum;

(21) Person means any individual, firm, partnership, limited liability company, company, agency, association, corporation, state, county, municipality, or other political subdivision. Whenever a fine or imprisonment is prescribed or imposed in sections 66-482 to 66-4,149, the word person as applied to a partnership, a limited liability company, or an association means the partners or members thereof;

(22) Producer means any person who manufactures agricultural ethyl alcohol or biodiesel at an ethanol or biodiesel facility in this state;

(23) Retailer means any person who acquires motor fuels from a producer, supplier, distributor, wholesaler, or importer for resale to consumers of such fuel;

(24) Semiannual period means either the period which begins on January 1 and ends on June 30 of each year or the period which begins on July 1 and ends on December 31 of each year;

(25) Supplier means any person who owns motor fuels imported by barge, barge line, or pipeline and stored at a barge, barge line, or pipeline terminal in this state; and

(26) Wholesaler means any person, other than a producer, supplier, distributor, or importer, who acquires motor fuels for resale.

Before engaging in business as a producer, supplier, distributor, wholesaler, importer, or exporter, a person shall file an application with the department. The application shall be filed upon a form prepared and furnished by the department. If the applicant is an individual, the application shall include the applicant's social security number. The application shall contain such information as the department deems necessary.

Before engaging in business as a producer, supplier, distributor, wholesaler, importer, or exporter, a person shall procure a license from the department permitting him or her to transact such business within the State of Nebraska. After reviewing the application required in section 66-483, the department may issue a license as provided in this section.

The department, for the first year of a new license or whenever it deems it necessary to insure compliance with sections 66-482 to 66-4,149, may require any producer, supplier, distributor, wholesaler, exporter, or importer subject to such sections to place with the department such security as it determines. The amount and duration of the security shall be fixed by the department and shall be approximately three times the total estimated average monthly tax liability payable by such producer, supplier, distributor, wholesaler, or importer pursuant to such sections. Such security shall consist of a surety bond executed by a surety company duly licensed and authorized to do business within this state in the amount specified by the department. In the case of an exporter, the amount and duration of the security shall be fixed by the department. Such security shall run to the Department of Revenue and be conditioned upon the payment of all taxes, interest, penalties, and costs for which such producer, supplier, distributor, wholesaler, exporter, or importer is liable, whether such liability was incurred prior to or after such security is filed.

(1) In lieu of the expense of collecting and remitting the motor vehicle fuel tax and furnishing the security pursuant to Chapter 66, article 4, and complying with the statutes and rules and regulations related thereto, the producer, supplier, distributor, wholesaler, or importer shall be entitled to deduct and withhold a commission of five percent on the first five thousand dollars and two and one-half percent upon all amounts above five thousand dollars remitted each reporting period.

(2) In lieu of the expense of collecting and remitting the diesel fuel tax and furnishing the security pursuant to Chapter 66, article 4, and complying with the statutes and rules and regulations related thereto, the producer, supplier, distributor, wholesaler, or importer shall be entitled to deduct and withhold a commission of two percent upon the first five thousand dollars and one-half of one percent upon all amounts in excess of five thousand dollars remitted each reporting period.

(3) Except as otherwise provided in Chapter 66, article 4, the per-gallon amount of the tax shall be added to the selling price of every gallon of such motor fuels sold in this state and shall be collected from the purchaser so that the ultimate consumer bears the burden of the tax. The tax shall be a direct tax on the retail or ultimate consumer precollected for the purpose of convenience and facility to the consumer. The levy and assessment on the producer, supplier, distributor, wholesaler, or importer as specified in Chapter 66, article 4, shall be as agents of the state for the precollection of the tax. The provisions of this section shall in no way affect the method of collecting the tax as provided in Chapter 66, article 4. The tax imposed by this section shall be collected and paid at the time, in the manner, and by those persons specified in Chapter 66, article 4.

(4) In consideration of receiving the commission, the producer, supplier, distributor, wholesaler, or importer shall not be entitled to any deductions, credits, or refunds arising out of such producer's, supplier's, distributor's, wholesaler's, or importer's failure or inability to collect any such taxes from any subsequent purchaser of motor fuels.

(5) For purposes of this section, reporting period means calendar month unless otherwise provided by rules and regulations of the department, but under no circumstance shall such reporting period extend beyond an annual basis.

(6) A producer, supplier, distributor, wholesaler, or importer shall not be entitled to the commission provided under subsection (1) or (2) of this section for the amount of any understatement of or refund of any such taxes collected as a result of a final assessment occurring pursuant to a notice of deficiency determination under section 66-722.

(1) Every licensed producer, supplier, distributor, wholesaler, exporter, and importer shall keep a complete and accurate record of all gallonage of motor fuels, to be based on gross gallons, received, purchased, refined, manufactured, or obtained and imported by a producer, supplier, distributor, wholesaler, or importer, which record shall show the name and address of the person from whom each transfer or purchase of motor fuels so received or imported was made, the point from which shipped or delivered, the point at which received, the method of delivery, the quantity of each transfer or purchase, and a complete and accurate record of the number of gallons, to be based on gross gallons, of motor fuels imported, produced, refined, manufactured, or compounded and the date of importation, production, refining, manufacturing, or compounding. If any licensed producer, supplier, distributor, wholesaler, or importer sells to another licensed producer, supplier, distributor, wholesaler, importer, or exporter any motor fuels, such seller shall keep as part of its records the name, address, and license number of the producer, supplier, distributor, wholesaler, importer, or exporter to whom the motor fuels were sold along with the date, quantity, and location where the motor fuels were sold.

(2) Every licensed producer, supplier, distributor, wholesaler, exporter, and importer shall include the information prescribed in subsection (1) of this section with the return required by section 66-488.

(3) The records required by this section shall be retained and be available for audit and examination by the department or its authorized agents during regular business hours for a period of three years following the date of filing fuel tax reports supported by such records or for a period of five years if the required reports are not filed.

(1) Every producer, supplier, distributor, wholesaler, importer, and exporter who engages in the sale, distribution, delivery, and use of motor fuels shall render and have on file with the department a return reporting the number of gallons of motor fuels, based on gross gallons, received, imported, or exported and unloaded and emptied or caused to be received, imported, or exported and unloaded and emptied by such producer, supplier, distributor, wholesaler, or importer in the State of Nebraska and the number of gallons of motor fuels produced, refined, manufactured, blended, or compounded by such producer, supplier, distributor, wholesaler, or importer within the State of Nebraska, during the preceding reporting period, and defining the nature of such motor fuels. The return shall also show such information as the department reasonably requires for the proper administration and enforcement of sections 66-482 to 66-4,149. The return shall contain a declaration, by the person making the same, to the effect that the statements contained therein are true and are made under penalties of perjury, which declaration shall have the same force and effect as a verification of the return and shall be in lieu of such verification. The return shall be signed by the producer, supplier, distributor, wholesaler, importer, or exporter or a principal officer, general agent, managing agent, attorney in fact, chief accountant, or other responsible representative of the producer, supplier, distributor, wholesaler, importer, or exporter, and such return shall be entitled to be received in evidence in all courts of this state and shall be prima facie evidence of the facts therein stated. The producer, supplier, distributor, wholesaler, importer, or exporter shall file the return in such format as prescribed by the department on or before the twentieth day of the next succeeding calendar month following the reporting period to which it relates. If the final filing date for such return falls on a Saturday, Sunday, or legal holiday, the next secular or business day shall be the final filing date. The return shall be considered filed on time if transmitted or postmarked before midnight of the final filing date.

(2) For purposes of this section, reporting period means calendar month unless otherwise provided by rules and regulations of the department, but under no circumstance shall such reporting period extend beyond an annual basis.

(1)(a) At the time of filing the return required by section 66-488, such producer, supplier, distributor, wholesaler, or importer shall, in addition to the tax imposed pursuant to sections 66-489.02, 66-4,140, 66-4,145, and 66-4,146 and in addition to the other taxes provided for by law, pay a tax in an amount set in subdivision (b) of this subsection upon all motor fuels as shown by such return, except that there shall be no tax on the motor fuels reported if (i) the required taxes on the motor fuels have been paid, (ii) the motor fuels have been sold to a licensed exporter exclusively for resale or use in another state, (iii) the motor fuels have been sold from a Nebraska barge line terminal, pipeline terminal, refinery, or ethanol or biodiesel facility, including motor fuels stored offsite in bulk, by a licensed producer or supplier to a licensed distributor, (iv) the motor fuels have been sold by a licensed distributor or licensed importer to a licensed distributor or to a licensed wholesaler and the seller acquired ownership of the motor fuels directly from a licensed producer or supplier at or from a refinery, barge, barge line, pipeline terminal, or ethanol or biodiesel facility, including motor fuels stored offsite in bulk, in this state or was the first importer of such fuel into this state, or (v) as otherwise provided in this section. Such producer, supplier, distributor, wholesaler, or importer shall remit such tax to the department.

(b) The tax shall be:

(i) Seven and one-half cents per gallon through December 31, 2015;

(ii) Eight cents per gallon beginning on January 1, 2016, through December 31, 2016;

(iii) Eight and one-half cents per gallon beginning on January 1, 2017, through December 31, 2017;

(iv) Nine cents per gallon beginning on January 1, 2018, through December 31, 2018; and

(v) Nine and one-half cents per gallon beginning on January 1, 2019.

(2)(a) As part of filing the return required by section 66-488, each producer of ethanol shall, in addition to other taxes imposed by the motor fuel laws, pay an excise tax of one and one-quarter cents per gallon on:

(i) Gasoline, natural gasoline, or any other gasoline component, including, but not limited to, any gasoline component produced from biomass feedstock, purchased for use as a denaturant by the producer at an ethanol facility; and

(ii) Two percent of agricultural ethyl alcohol sold that is unfit for beverage purposes and does not meet the American Society for Testing and Materials D4806 standards.

(b) All taxes, interest, and penalties collected under this subsection shall be remitted to the State Treasurer for credit to the Agricultural Alcohol Fuel Tax Fund.

(3)(a) Motor fuels, methanol, and all blending agents or fuel expanders shall be exempt from the taxes imposed by this section and sections 66-489.02, 66-4,105, 66-4,140, 66-4,145, and 66-4,146, when the fuels are used for buses equipped to carry more than seven persons for hire and engaged entirely in the transportation of passengers for hire within municipalities or within a radius of six miles thereof.

(b) The owner or agent of any bus equipped to carry more than seven persons for hire and engaged entirely in the transportation of passengers for hire within municipalities, or within a radius of six miles thereof, in lieu of the excise tax provided for in this section, shall pay an equalization fee of a sum equal to twice the amount of the registration fee applicable to such vehicle under the laws of this state. Such equalization fee shall be paid in the same manner as the registration fee and be disbursed and allocated as registration fees.

(c) Nothing in this section shall be construed as permitting motor fuels to be sold tax exempt. The department shall refund tax paid on motor fuels used in buses deemed exempt by this section.

(4) Gasoline, natural gasoline, or any other gasoline component, including, but not limited to, any gasoline component produced from biomass feedstock, purchased for use as a denaturant by a producer at an ethanol facility as defined in section 66-1333 shall be exempt from the motor fuels tax imposed by subsection (1) of this section as well as the tax imposed pursuant to sections 66-489.02, 66-4,140, 66-4,145, and 66-4,146.

(5) Unless otherwise provided by an agreement entered into between the State of Nebraska and the governing body of any federally recognized Indian tribe within the State of Nebraska, motor fuels purchased on a Nebraska Indian reservation where the purchaser is a Native American who resides on the reservation shall be exempt from the motor fuels tax imposed by this section as well as the tax imposed pursuant to sections 66-489.02, 66-4,140, 66-4,145, and 66-4,146.

(6) Motor fuels purchased for use by the United States Government or its agencies shall be exempt from the motor fuels tax imposed by this section as well as the tax imposed pursuant to sections 66-489.02, 66-4,140, 66-4,145, and 66-4,146.

(7) In the case of diesel fuel, there shall be no tax on the motor fuels reported if (a) the diesel fuel has been indelibly dyed and chemically marked in accordance with regulations issued by the Secretary of the Treasury of the United States under 26 U.S.C. 4082 or (b) the diesel fuel contains a concentration of sulphur in excess of five-hundredths percent by weight or fails to meet a cetane index minimum of forty and has been indelibly dyed in accordance with regulations promulgated by the Administrator of the United States Environmental Protection Agency pursuant to 42 U.S.C. 7545.

Methanol, benzine, benzol, naphtha, kerosene, and any other volatile, flammable, or combustible liquid suitable for use as a motor fuels blending agent or fuel expander shall be exempt from the taxes imposed under sections 66-489, 66-489.02, 66-4,105, 66-4,140, 66-4,145, and 66-4,146 unless and until such methanol, benzine, benzol, naphtha, kerosene, or other blending agent or fuel expander is blended with motor fuels or placed directly into the supply tank of a licensed motor vehicle. Any person blending such products with motor fuels or placing such products into the supply tank of a licensed motor vehicle shall pay the taxes imposed under such sections directly to the department on forms provided by the department at the same time as the motor fuels with which it is blended become subject to taxation or, if the tax imposed on the motor fuels has already been paid, upon blending. The taxes imposed by this section shall not apply to fuel additives which are used to enhance engine performance or prevent fuel line freezing or clogging when placed directly into the supply tank of a motor vehicle in quantities of one quart or less.

(1) For tax periods beginning on and after July 1, 2009, at the time of filing the return required by section 66-488, the producer, supplier, distributor, wholesaler, or importer shall, in addition to the other taxes provided for by law, pay a tax at the rate of five percent of the average wholesale price of gasoline for the gallons of the motor fuels as shown by the return, except that there shall be no tax on the motor fuels reported if they are otherwise exempted by sections 66-482 to 66-4,149.

(2) The department shall calculate the average wholesale price of gasoline on April 1, 2009, and on each April 1 and October 1 thereafter. The average wholesale price on April 1 shall apply to returns for the tax periods beginning on and after July 1, and the average wholesale price on October 1 shall apply to returns for the tax periods beginning on and after January 1. The average wholesale price shall be determined using data available from the Department of Environment and Energy and shall be an average wholesale price per gallon of gasoline sold in the state over the previous six-month period, excluding any state or federal excise tax or environmental fees. The change in the average wholesale price between two six-month periods shall be adjusted so that the increase or decrease in the tax provided for in this section or section 66-6,109.02 does not exceed one cent per gallon.

(3) All sums of money received under this section shall be credited to the Highway Trust Fund. Credits and refunds of such tax allowed to producers, suppliers, distributors, wholesalers, or importers shall be paid from the Highway Trust Fund. The balance of the amount credited, after credits and refunds, shall be allocated as follows:

(a) Sixty-six percent to the Highway Cash Fund for the Department of Transportation;

(b) Seventeen percent to the Highway Allocation Fund for allocation to the various counties for road purposes; and

(c) Seventeen percent to the Highway Allocation Fund for allocation to the various municipalities for street purposes.

(1) A purchaser of undyed diesel fuel may present an exemption certificate to the seller when not more than fifty gallons of such fuel is placed directly into the supply tank of a temperature control unit or power take-off unit. To qualify for this exemption, the supply tank of the temperature control unit or power take-off unit cannot be connected to the engine which provides motive power to a motor vehicle or connected to any fuel supply tank connected to the engine of a motor vehicle.

(2) The seller of undyed diesel fuel may in good faith accept the exemption certificate and sell undyed diesel fuel without collecting the tax. The seller may accept an exemption certificate for multiple purchases. Such a certificate shall be renewed annually. If the seller is a producer, supplier, distributor, wholesaler, or importer, the seller may deduct the number of gallons sold without the tax from the return for the period during which the fuel was sold or for a subsequent period. If the seller is not a producer, supplier, distributor, wholesaler, or importer, the seller may provide a monthly exemption certificate to the producer, distributor, wholesaler, or importer or other supplier of the taxed diesel fuel for the total number of gallons of undyed diesel fuel sold without tax during the prior month.

(3) Receipt of an exemption certificate taken in good faith shall be conclusive proof for the seller that the sale was exempt.

(4) Any person who wrongfully claims an exemption and presents an exemption certificate shall be liable for the tax on the diesel fuel. The department shall, on the basis of information available, determine the tax that would have been due on such transaction and assess the tax against such person.

(5) Any person who unlawfully issues an exemption certificate shall be subject to an administrative penalty of one thousand dollars for each violation to be assessed and collected by the department. All such penalties collected shall be remitted to the State Treasurer for credit to the Highway Trust Fund.

(1) Except as provided in subsection (5) of this section, the fuel supply tank of a motor vehicle registered or required to be registered for operation on the highway shall not contain or be used with undyed diesel fuel that has not been taxed or diesel fuel which contains any evidence of the dye or chemical marker added pursuant to the regulations promulgated under 26 U.S.C. 4082 or 42 U.S.C. 7545 indicating untaxed low-sulphur or high-sulphur diesel fuel.

(2) No retailer of diesel fuel shall sell or offer to sell diesel fuel that contains any evidence of the dye or chemical marker added pursuant to the regulations promulgated under 26 U.S.C. 4082 or 42 U.S.C. 7545 indicating untaxed low-sulphur or high-sulphur diesel fuel unless the fuel dispensing device is clearly marked with a notice that the fuel is dyed or chemically marked.

(3) Any law enforcement officer, any carrier enforcement officer, or any agent of the department who has reasonable grounds to suspect a violation of this section may inspect the fuel in the fuel supply tank of any motor vehicle or the fuel storage facilities and dispensing devices of any diesel fuel retailer to determine compliance with this section. Fuel inspections may also be conducted in the course of safety or other inspections authorized by law.

(4) Any person who violates any provision of this section or who refuses to permit an inspection authorized by this section shall be guilty of a Class IV misdemeanor and shall be subject to an administrative penalty of two hundred fifty dollars for the first such violation. If the person had another violation under this section within the last five years, the person shall be subject to an administrative penalty of one thousand dollars for the current violation. If the person had two or more violations under this section within the last five years, the person shall be subject to an administrative penalty of two thousand five hundred dollars for the current violation. All such penalties shall be assessed against the owner of the vehicle as of the date of the violation. The penalty shall be assessed and collected by the department. All such penalties collected shall be remitted to the State Treasurer for credit to the Highway Trust Fund.

(5) Any motor vehicle owned or leased by any state, county, municipality, or other political subdivision may be operated on the highways of this state with dyed diesel fuel, except high-sulphur diesel fuel dyed in accordance with regulations promulgated by the Administrator of the Environmental Protection Agency pursuant to 42 U.S.C. 7545, if the taxes imposed by sections 66-482 to 66-4,149 are paid to the department by the state, county, municipality, or other political subdivision. The state, county, municipality, or other political subdivision shall pay the tax and file a return concerning the tax to the department in like manner and form as is required under sections 66-489.02, 66-4,105, and 66-4,106.

(6) For purposes of this section:

(a) Owner means registered owner, titleholder, lessee entitled to possession of the motor vehicle, or anyone otherwise maintaining a possessory interest in the motor vehicle, but does not include anyone who, without participating in the use or operation of the motor vehicle and otherwise not engaged in the purpose for which the motor vehicle is being used, holds indicia of ownership primarily to protect his or her security interest in the motor vehicle or who acquired ownership of the motor vehicle pursuant to a foreclosure of a security interest in the motor vehicle; and

(b) Use means to operate, fuel, or otherwise employ.

(1) No tax shall be collected with respect to motor fuels imported by barge, barge line, or pipeline and stored at a barge, barge line, or pipeline terminal in this state or refined at a refinery in this state and stored thereat until the motor fuels are withdrawn for sale or use in this state or are loaded at the terminal or refinery into transportation equipment for shipment or delivery to a destination in this state. No tax shall be collected with respect to motor fuels manufactured at an ethanol or biodiesel facility in this state nor with respect to motor fuels owned by a producer, but stored at another location in this state, until the motor fuels are withdrawn for sale or use in this state or are loaded at the ethanol or biodiesel facility or other storage into transportation equipment for shipment or delivery to a destination in this state.

(2) When motor fuels are withdrawn or loaded as provided in this section, the producer, supplier, or distributor in this state shall be liable for payment of the motor fuels tax.

(3) The person owning and operating such refinery, barge, barge line terminal, pipeline terminal, or ethanol or biodiesel facility may, at the department's request, make and file such verified reports of operations within the state which may include reporting all motor fuels loaded within this state for delivery in another state and such other information as shall be required by the department.

If such tax has been paid upon any of the ingredients or compounds under the provisions of section 66-489, credit shall be allowed for such tax previously paid, in computing the tax upon such compound, so that the motor fuels used in the compound are not taxed twice.

Unless otherwise provided, all sums of money received under sections 66-489 and 66-4,105 by the State Treasurer shall be credited to the Highway Trust Fund. Credits and refunds of the tax provided for in such sections allowed to producers, suppliers, distributors, wholesalers, exporters, importers, or retailers shall be paid from the Highway Trust Fund. The balance of the amount credited, after credits and refunds, shall be allocated to the Highway Cash Fund.

The Highway Cash Fund and the Roads Operations Cash Fund are hereby created. If bonds are issued pursuant to subsection (2) of section 39-2223, the balance of the share of the Highway Trust Fund allocated to the Department of Transportation and deposited into the Highway Restoration and Improvement Bond Fund as provided in subsection (8) of section 39-2215 and the balance of the money deposited in the Highway Restoration and Improvement Bond Fund as provided in section 39-2215.01 shall be transferred by the State Treasurer, on or before the last day of each month, to the Highway Cash Fund. If no bonds are issued pursuant to subsection (2) of section 39-2223, the share of the Highway Trust Fund allocated to the Department of Transportation shall be transferred by the State Treasurer on or before the last day of each month to the Highway Cash Fund.

The Legislature may direct the State Treasurer to transfer funds from the Highway Cash Fund to the Roads Operations Cash Fund. Both funds shall be expended by the department (1) for acquiring real estate, road materials, equipment, and supplies to be used in the construction, reconstruction, improvement, and maintenance of state highways, (2) for the construction, reconstruction, improvement, and maintenance of state highways, including grading, drainage, structures, surfacing, roadside development, landscaping, and other incidentals necessary for proper completion and protection of state highways as the department shall, after investigation, find and determine shall be for the best interests of the highway system of the state, either independent of or in conjunction with federal-aid money for highway purposes, (3) for the share of the department of the cost of maintenance of state aid bridges, (4) for planning studies in conjunction with federal highway funds for the purpose of analyzing traffic problems and financial conditions and problems relating to state, county, township, municipal, federal, and all other roads in the state and for incidental costs in connection with the federal-aid grade crossing program for roads not on state highways, (5) for tests and research by the department or proportionate costs of membership, tests, and research of highway organizations when participated in by the highway departments of other states, (6) for the payment of expenses and costs of the Board of Examiners for County Highway and City Street Superintendents as set forth in section 39-2310, (7) for support of the public transportation assistance program established under section 13-1209 and the intercity bus system assistance program established under section 13-1213, (8) for purchasing from political or governmental subdivisions or public corporations, pursuant to section 39-1307, any federal-aid transportation funds available to such entities, (9) for costs related to the administration of the Division of Aeronautics of the Department of Transportation as specified in section 3-107, (10) for furnishing the Nebraska Broadband Office with necessary office space, furniture, equipment, and supplies as well as providing administrative and budgetary support, including salaries for professional, technical, and clerical assistants, as provided in section 81-702, and (11) for the County Bridge Match Program.

The State Treasurer shall transfer four million dollars from the Roads Operations Cash Fund to the Transportation Infrastructure Bank Fund on or before June 30, 2024, on such dates and in such amounts as directed by the budget administrator of the budget division of the Department of Administrative Services. The money shall be used for the County Bridge Match Program. The State Treasurer shall transfer four million dollars from the Roads Operations Cash Fund to the Transportation Infrastructure Bank Fund on or before June 30, 2025, on such dates and in such amounts as directed by the budget administrator of the budget division of the Department of Administrative Services. The money shall be used for the County Bridge Match Program.

Any money in the Highway Cash Fund and the Roads Operations Cash Fund not needed for current operations of the department shall, as directed by the Director-State Engineer to the State Treasurer, be invested by the state investment officer pursuant to the Nebraska Capital Expansion Act and the Nebraska State Funds Investment Act, subject to approval by the board of each investment. All income received as a result of such investment shall be placed in the Highway Cash Fund.

Any county may by resolution of the county board, any city may by ordinance of the mayor and city council, and any village may by ordinance of the chairperson and board of trustees issue bonds for the construction of roads of the county and street and state highway or federal-aid routes of cities and villages and to pay the interest on and to retire any such bonds by pledging funds received from the Highway Allocation Fund. Any city of the primary class may by ordinance of the mayor and city council issue bonds for the construction of offstreet parking facilities of such city and to pay the interest on and to retire any such bonds by pledging funds received from the Highway Allocation Fund.

The issuance of bonds by any county, city, or village under the authority of this section shall not be subject to any charter or statutory limitations of indebtedness or be subject to any restrictions imposed upon or conditions precedent to the exercise of the powers of counties, cities, and villages to issue bonds or evidences of indebtedness which may be contained in such charters or other statutes. Any county, city, or village which has heretofore or may hereafter issue bonds under the authority of this section shall levy property taxes upon all the taxable property in such county, city, or village issuing such bonds at such rate or rates within any applicable charter, statutory, or constitutional limitations as will provide funds which, together with receipts from the Highway Allocation Fund pledged to the payment of such bonds and any other money made available and used for that purpose, will be sufficient to pay the principal of and interest on such bonds as they severally mature.

As used in sections 66-4,101 and 66-4,102, street intersection shall include geometric design elements extending beyond the intersection of two streets to include construction involving curvature for turning movements, turning roadways, deceleration and acceleration lanes, median lanes, median openings, design and construction for U-turns, sight distances, and channelization, together with necessary traffic controls, including such construction as is necessary for traffic both entering and leaving the actual street intersection.

The provisions of sections 66-482 to 66-4,103 shall not apply or be construed to apply to foreign or interstate commerce, except insofar as the same may be permitted under the provisions of the Constitution and laws of the United States.

(1)(a) There is hereby levied and imposed an excise tax in an amount set in subdivision (1)(b) of this section, increased by the amounts imposed or determined under sections 66-489.02, 66-4,140, 66-4,145, and 66-4,146, upon the use of all motor fuels used in this state and due the State of Nebraska under section 66-489. Users of motor fuels subject to taxation under this section shall be allowed the same exemptions, deductions, and rights of reimbursement as are authorized and permitted by Chapter 66, article 4, other than any commissions provided under such article.

(b) The excise tax shall be nine and one-half cents per gallon.

(c) For purposes of this subsection and section 66-4,106, use means the purchase or consumption of motor fuels in this state.

(2) Beginning January 1, 2028, there is hereby levied and imposed an excise tax of three cents per kilowatt hour on the electric energy used to charge the battery of a motor vehicle at a commercial electric vehicle charging station.

Every person using motor fuels subject to taxation on the use thereof under sections 66-4,105 and 66-4,114 shall pay the excise taxes and make a report concerning the same to the department in like manner, form, and time as is required by sections 66-488 and 66-489 for producers, suppliers, distributors, wholesalers, or importers of motor fuels. No such payment of tax or report shall be required if such tax has been paid and the report has been made for such user by any producer, supplier, distributor, wholesaler, or importer licensed under section 66-484. Producers, suppliers, distributors, wholesalers, or importers or other persons having paid such tax or liable for its payment shall collect the amount thereof from any person to whom such motor fuels are sold in this state along with the selling price thereof.

Motor fuels in the supply tank of any qualified motor vehicle as defined in section 66-1416 which is regularly connected with the carburetor of the engine of any such vehicle and which is brought into this state shall be liable for the payment of the tax imposed by this state upon motor fuels under sections 66-489, 66-489.02, and 66-4,105 except when a trip permit is used as provided in the International Fuel Tax Agreement Act.

The Legislature declares that it does not intend to place any burden upon the transportation of motor fuels in interstate commerce under such circumstances as the Constitution and statutes of the United States of America preclude, but deems the tax provided for in section 66-4,114 and the regulations as provided herein to be necessary to the effective collection of a tax on motor fuels used in motor vehicles upon the highways of this state.

The department or any peace officer of this state shall enforce sections 66-4,114 to 66-4,117. The department shall adopt and promulgate reasonable rules and regulations intended to collect revenue arising under such sections and for the payment thereof.

The repeal of section 66-4,124 by Laws 2004, LB 983, applies to motor fuels purchased during any tax year ending or deemed to end on or after January 1, 2005, under the Internal Revenue Code.

(1) Each producer, supplier, distributor, wholesaler, or importer required by section 66-489 to pay motor fuels taxes shall, in addition to all other taxes provided by law, pay an excise tax at a rate set pursuant to section 66-4,144 for motor fuels received, imported, produced, refined, manufactured, blended, or compounded by such producer, supplier, distributor, wholesaler, or importer within the State of Nebraska as motor fuels suitable for retail sale. All sums of money received under this section shall be credited to the Highway Trust Fund. Credits and refunds of such tax allowed to producers, suppliers, distributors, wholesalers, or importers shall be paid from the Highway Trust Fund. The balance of the amount credited, after credits and refunds, shall be allocated to the Highway Restoration and Improvement Bond Fund if bonds are issued pursuant to subsection (2) of section 39-2223 and to the Highway Cash Fund if no bonds are issued pursuant to such subsection.

(2) Producers, suppliers, distributors, wholesalers, and importers of motor fuels subject to taxation under subsection (1) of this section shall pay such excise tax and shall make a report concerning the tax in like manner, form, and time and be allowed the same exemptions, deductions, and rights of reimbursement as are authorized producers, suppliers, distributors, wholesalers, or importers for taxes paid pursuant to Chapter 66, article 4.

(1) Upon receipt of the cost figures required by section 66-4,143, the department shall determine the statewide average cost by dividing the total amount paid for motor fuels by the State of Nebraska, excluding any state and federal taxes, by the total number of gallons of motor fuels purchased during the reporting period.

(2) After computing the statewide average cost as required in subsection (1) of this section, the department shall multiply such statewide average cost by the tax rate established pursuant to section 66-4,144.

(3) In making the computations required by subsections (1) and (2) of this section, gallonage reported shall be rounded to the nearest gallon and total costs shall be rounded to the nearest dollar. All other computations shall be made with three decimal places, except that after all computations have been made the tax per gallon shall be rounded to the nearest one-tenth of one cent.

(4) The tax rate per gallon computed pursuant to this section shall be distributed to all licensed motor fuels producers, suppliers, distributors, wholesalers, importers, and compressed fuel retailers at least five days prior to the first day of any semiannual period during which the tax is to be adjusted. Such tax rate shall be utilized in computing the taxes due for the period specified by the department.

(1) The materiel administrator of the Department of Administrative Services shall on or before the tenth day of the fifth calendar month following the end of a semiannual period submit to the Department of Revenue a report providing the total cost and number of gallons of motor fuels purchased by the State of Nebraska during the preceding month. In providing such information, the materiel administrator shall total only those purchases which were fifty or more gallons and shall separately identify the amount of any state or federal tax which was included in the price paid.

(2) The Department of Revenue shall provide any assistance the materiel administrator may need in performing his or her duties under this section.

(1) In order to insure that an adequate balance in the Highway Restoration and Improvement Bond Fund is maintained to meet the debt service requirements of bonds to be issued by the commission under subsection (2) of section 39-2223, the Director-State Engineer shall certify to the department the excise tax rate to be imposed by sections 66-4,140 and 66-6,108 for each year during which such bonds are outstanding necessary to provide in each such year money equal in amount to not less than one hundred twenty-five percent of such year's bond principal and interest payment requirements. The department shall adjust the rate as certified by the Director-State Engineer. Such rate shall be in addition to the rate of excise tax set pursuant to subsection (2) of this section. Each such rate shall be effective from July 1 of a stated year through June 30 of the succeeding year or during such other period not longer than one year as the Director-State Engineer certifies to be consistent with the principal and interest requirements of such bonds. Such excise tax rates set pursuant to this subsection may be increased, but such excise tax rates shall not be subject to reduction or elimination unless the Director-State Engineer has received from the State Highway Commission notice of reduced principal and interest requirements for such bonds, in which event the Director-State Engineer shall certify the new rate or rates to the department. The new rate or rates, if any, shall become effective on the first day of the following semiannual period.

(2) In order to insure that there is maintained an adequate Highway Cash Fund balance to meet expenditures from such fund as appropriated by the Legislature, by June 15 or five days after the adjournment of the regular legislative session each year, whichever is later, the Director-State Engineer shall certify to the department the excise tax rate to be imposed by sections 66-4,140 and 66-6,108. The department shall adjust the rate as certified by the Director-State Engineer to be effective from July 1 through June 30 of the succeeding year. The rate of excise tax for a given July 1 through June 30 period set pursuant to this subsection shall be in addition to and independent of the rate or rates of excise tax set pursuant to subsection (1) of this section for such period. The Director-State Engineer shall determine the cash and investment balances of the Highway Cash Fund at the beginning of each fiscal year under consideration and the estimated receipts to the Highway Cash Fund from each source which provides at least one million dollars annually to such fund. The rate of excise tax shall be an amount sufficient to meet the appropriations made from the Highway Cash Fund by the Legislature. Such rate shall be set in increments of one-hundredth of one percent.

(3) The Department of Transportation shall provide to the Legislative Fiscal Analyst an electronic copy of the information that is submitted to the Department of Revenue and used to set or adjust the excise tax rate.

(4) If the actual receipts received to date added to any projections or modified projections of deposits to the Highway Cash Fund for the current fiscal year are less than ninety-nine percent or greater than one hundred two percent of the appropriation for the current fiscal year, the Director-State Engineer shall certify to the department the adjustment in rate necessary to meet the appropriations made from the Highway Cash Fund by the Legislature. The department shall adjust the rate as certified by the Director-State Engineer to be effective on the first day of the following semiannual period.

(5) Nothing in this section shall be construed to abrogate the duties of the Department of Transportation or attempt to change any highway improvement program schedule.

(1) In addition to the tax imposed by sections 66-489, 66-489.02, and 66-4,140, each producer, supplier, distributor, wholesaler, and importer required by section 66-489 to pay motor fuels taxes shall pay an excise tax in an amount set in subsection (2) of this section on all motor fuels received, imported, produced, refined, manufactured, blended, or compounded by such producer, supplier, distributor, wholesaler, or importer within the State of Nebraska.

(2) The excise tax shall be:

(a) Two and eight-tenths cents per gallon through December 31, 2015;

(b) Three and eight-tenths cents per gallon beginning on January 1, 2016, through December 31, 2016;

(c) Four and eight-tenths cents per gallon beginning on January 1, 2017, through December 31, 2017;

(d) Five and eight-tenths cents per gallon beginning on January 1, 2018, through December 31, 2018; and

(e) Six and eight-tenths cents per gallon beginning on January 1, 2019.

(1) In addition to the tax imposed by sections 66-489, 66-489.02, 66-4,140, and 66-4,145, each producer, supplier, distributor, wholesaler, and importer required by section 66-489 to pay motor fuels taxes shall pay an excise tax in an amount set in subsection (2) of this section on all motor fuels used in the State of Nebraska.

(2) The tax shall be:

(a) Two and eight-tenths cents per gallon through December 31, 2015;

(b) Three and eight-tenths cents per gallon beginning on January 1, 2016, through December 31, 2016;

(c) Four and eight-tenths cents per gallon beginning on January 1, 2017, through December 31, 2017;

(d) Five and eight-tenths cents per gallon beginning on January 1, 2018, through December 31, 2018; and

(e) Six and eight-tenths cents per gallon beginning on January 1, 2019.

The receipts from the tax established under sections 66-4,145, 66-4,146, and 66-6,109 shall be credited to the Highway Trust Fund. Credits and refunds of such tax allowed to producers, suppliers, distributors, wholesalers, exporters, importers, or retailers shall be paid from the Highway Trust Fund. The balance of the amount credited, after credits and refunds, shall be allocated to the Highway Allocation Fund.

All taxes, interest, and penalties collected under Chapter 66, article 4, shall be remitted to the State Treasurer for credit to the Highway Trust Fund or Highway Cash Fund as appropriate.

(1) The State Treasurer shall monthly distribute the receipts accruing to the Highway Allocation Fund pursuant to section 66-4,147. One-half of such receipts shall be distributed to the various counties and municipal counties for road purposes and one-half of such receipts shall be distributed to the various municipalities and municipal counties for street purposes.

(2) The distribution of funds to the respective cities, counties, and municipal counties under subsection (1) of this section shall be based on the provisions of Chapter 39, article 25.

The department shall adopt and promulgate rules and regulations, prescribe forms, and perform all duties necessary to carry out its duties relating to the motor fuels tax.

Sections 66-501 to 66-512 and 66-525 to 66-531 are for the purpose of aiding in the administration and enforcement of the motor fuel laws of this state. Such sections shall not be construed to apply to any person transporting motor vehicle fuel or diesel fuel within the State of Nebraska if such fuel is for such person's own agricultural, quarrying, industrial, or other nonhighway use.

The Department of Revenue shall issue a liquid fuel carriers license to the owner and lessee of every car, automobile, truck, trailer, vehicle, or other means of transportation using the highways for the transportation of motor vehicle fuel or diesel fuel into, within, or out of the State of Nebraska. Such licenses shall be issued by the department on receipt of applications from owners and lessees of such vehicles on forms provided by the department. If the applicant is an individual, the application shall include the applicant's social security number. Such licenses may be denied according to the provisions of section 66-729. The liquid fuel carriers license shall be valid until suspended, revoked for cause, or otherwise canceled and shall not be transferable.

Any motor vehicle that is equipped with a cargo tank for the purpose of transporting motor vehicle fuel or diesel fuel shall be equipped with a suitable fuel supply tank and shall not have a fuel connection of any nature running from the cargo tank to the fuel supply tank or to the carburetor of such motor vehicle with which to draw fuel from the cargo tank.

(1) Every person in charge of any vehicle in which motor vehicle fuel or diesel fuel is carried into, within, or out of the State of Nebraska shall have and keep a copy of the liquid fuel carriers license with him or her during the entire transportation and also a copy of the bill of sale, bill of lading, manifest, purchase order, sales invoice or delivery ticket, or similar documentation covering all such motor vehicle fuel or diesel fuel which is individually numbered and dated and shows the kind and amount of the motor vehicle fuel or diesel fuel, where obtained and of whom, the destination state or delivery location, and the name and address of the owner and of the consignee or purchaser, if applicable. Such person shall exhibit every such paper or document, immediately upon demand, to the department, any employee thereof, or any peace officer of this state.

(2)(a) Any person importing motor vehicle fuel or diesel fuel into the State of Nebraska for the purpose of delivery in this state who does not have in his or her possession an original unaltered bill of sale, bill of lading, or manifest identifying Nebraska as the destination state shall obtain a motor fuel delivery permit number prior to delivering such fuel. A separate motor fuel delivery permit number shall be required each time such person enters Nebraska for the purpose of delivering motor vehicle fuel or diesel fuel in Nebraska. Prior to issuance of a motor fuel delivery permit number, the person shall provide his or her Nebraska liquid fuel carriers license number, the type and amount of fuel being imported, where obtained, the destination, the original bill of sale, bill of lading, or manifest number, if applicable, and such other information as the Department of Revenue deems necessary.

(b) Any person obtaining motor vehicle fuel or diesel fuel from a bulk fuel storage facility located in this state, other than a pipeline terminal, barge line terminal, or refinery, who exits this state and returns with all or any portion of such fuel remaining shall not be deemed to be importing such remaining fuel and shall not be required to obtain a motor fuel delivery permit number if such person maintains the documents and papers required by subsection (1) of this section establishing that such remaining fuel was obtained from a bulk fuel storage facility located in this state.

(3) Any person transporting motor vehicle fuel or diesel fuel shall be deemed to have given his or her consent to submit to an inspection of licenses and permits required for the transportation of fuel and the documents and papers required by this section for the purpose of determining compliance with the motor fuel laws. The issuance of a motor fuel delivery permit number under this section shall be deemed to be the issuance of a permit for purposes of enforcing the motor fuel laws.

(4) Any law enforcement officer who has been duly authorized to make arrests for violations of traffic laws of this state or ordinances of any city or village or any carrier enforcement officer who has reasonable grounds to believe that a vehicle is transporting motor vehicle fuel or diesel fuel may require the operator of such vehicle to display any or all licenses and permits required for the transportation of fuel and the documents and papers required by this section. Such law enforcement officer or carrier enforcement officer may make a record of any of the information contained on the licenses or permits or any of the information from the bill of sale, bill of lading, manifest, or other documents and papers required by sections 66-501 to 66-512 and 66-525 to 66-531.

(5) The Legislature declares that it does not intend to place any burden upon the transportation of motor vehicle fuel or diesel fuel in interstate commerce under such circumstances as federal law and the Constitution of the United States preclude.

Every vehicle used in transporting motor vehicle fuel or diesel fuel subject to sections 66-501 to 66-512 and 66-525 to 66-531 shall have the name and address of the owner of the vehicle displayed in the form and manner required by 49 C.F.R. 390.21. The Department of Revenue shall adopt, promulgate, and enforce such rules and regulations as it deems proper and necessary for the proper administration and enforcement of such sections.

It shall be unlawful for any person (1) to transport any motor vehicle fuel or diesel fuel within, into, or across this state in violation of any of the provisions of sections 66-501 to 66-512 and 66-525 to 66-531, (2) to fail to comply with any of the provisions of such sections or of the rules, regulations, or requirements of the Department of Revenue to which he or she is subject, (3) to falsify any bill of sale, bill of lading, manifest, invoice, purchase order, or report, (4) to make, exhibit, or deliver to the department any false bill of sale, bill of lading, manifest, invoice, purchase order, or report, (5) to make, carry, or display any false document or paper referred to in this section, (6) to unlawfully evade, assist, or abet any other person in unlawfully evading any motor vehicle fuel or diesel fuel taxes imposed by the state, or (7) to deliver motor vehicle fuel or diesel fuel to a destination state not on an original unaltered bill of sale, bill of lading, or manifest carried by such person except when a motor fuel delivery permit number has been obtained or as otherwise provided in section 66-503.

The department may require every railroad or railroad company, motor truck or motor truck transportation company, water transportation company, pipeline company, and other person transporting or bringing into the State of Nebraska or transporting from a refinery, ethanol or biodiesel facility, pipeline, pipeline terminal, or barge terminal within the State of Nebraska for the purpose of delivery within or export from this state any motor vehicle fuel or diesel fuel which is or may be produced and compounded for the purpose of operating or propelling any motor vehicle, to furnish a return on forms prescribed by the department to be delivered and on file in the office of the department by the twentieth day of each calendar month, showing all quantities of such motor vehicle fuel or diesel fuel transported during the preceding calendar month for which the report is made, giving the name of the consignee, the point at which delivery was made, the date of delivery, the method of delivery, the quantity of each such shipment, and such other information as the department requires.

Any car, automobile, truck, pipeline, airplane, vehicle, or means of transportation which is engaged in or used for the unlawful transportation of motor vehicle fuel or diesel fuel is declared a common nuisance, and there shall be no property rights of any kind whatsoever in any car, automobile, truck, pipeline, airplane, vehicle, or other means of transportation which is engaged in or used for the unlawful transportation of motor vehicle fuel or diesel fuel except as provided in sections 66-527 to 66-531.

(1) Any peace officer or agent of the department, having probable cause to believe that a vehicle is being used for the unlawful transportation of motor vehicle fuel or diesel fuel, shall make a search thereof with or without a warrant, and in every case when a search is made with or without a warrant and it appears that any provision of sections 66-501 to 66-512 and 66-526 to 66-531 has been violated, the peace officer or agent shall take such fuel being unlawfully transported, the vehicle, and the person in charge thereof into custody, a complaint shall be filed within thirty days of the seizure against such party, fuel, and vehicle, a warrant shall issue, and such party, fuel, and vehicle shall be held for trial as in a criminal action. The vehicle and the fuel so seized shall not be taken from the possession of any officer or agent seizing and holding them by writ of replevin or other proceedings.

(2) In addition, any person who violates any provision of sections 66-501 to 66-512 and 66-526 to 66-531 is subject to an administrative penalty of one thousand dollars for each violation to be assessed and collected by the department. All such penalties under this subsection shall be assessed against the owner of the vehicle as of the date of the violation. All such penalties collected shall be remitted to the State Treasurer for credit to the Highway Trust Fund.

(3) For purposes of this section:

(a) Owner means registered owner, titleholder, lessee entitled to possession of the motor vehicle, or anyone otherwise maintaining a possessory interest in the motor vehicle, but does not include anyone who, without participating in the use or operation of the motor vehicle and otherwise not engaged in the purpose for which the motor vehicle is being used, holds indicia of ownership primarily to protect his or her security interest in the motor vehicle or who acquired ownership of the motor vehicle pursuant to a foreclosure of a security interest in the motor vehicle; and

(b) Use means to operate, fuel, or otherwise employ.

Final judgment of conviction in a criminal action brought under section 66-527 shall be in all cases a bar to any suits for the recovery of the fuel transported thereby or other personal property actually and directly used in connection therewith, or the value of the same, or for damages alleged to arise by reason of the seizing of such vehicle and the fuel contained therein, and upon conviction judgment shall be entered directing that the fuel transported and other personal property actually and directly used in connection with such violation may be put to official use by the confiscating agency for a period of not more than two years or shall be ordered sold by the court at public sale on ten days' notice, and the remaining proceeds, after the motor vehicle fuel or diesel fuel tax and cost of collection have been remitted to the appropriate fund or person, shall be remitted into the temporary school fund to be used for the support of the common schools as in the case of fines and forfeitures. The purchaser of such fuel or property shall take title thereto free and clear of all rights, title, and interest of all persons claiming to be owners thereof or claiming to have liens thereon.

The court, upon conviction of the person so arrested, unless good cause to the contrary is shown by the owner or lienor, shall order a sale by public auction of the vehicle seized or the vehicle may be put to official use by the confiscating agency for a period of not more than two years. The officer making the sale, after deducting the expenses of keeping the vehicle, the fee for the seizure, and the cost of sale, shall pay all liens, according to their priorities, which are established, by intervention or otherwise at such hearing or in other proceedings brought for such purpose, as being bona fide and having been created without the lienor having any notice that the carrying vehicle was being used or was to be used for illegal transportation of motor vehicle fuel or diesel fuel and shall pay the balance of the proceeds into the temporary school fund to be used for the support of the common schools as in the case of fines and forfeitures. Notice of the hearing upon the proceedings for the forfeiture and confiscation of such vehicle shall be given all interested parties by publication in one issue of a legal newspaper published in the county or, if such newspaper is not published in the county, in a legal newspaper of general circulation in the county at least ten days prior to the date of hearing.

If the person operating the vehicle used for the unlawful transportation of motor vehicle fuel or diesel fuel is not apprehended or arrested, the officer or agent shall take the vehicle and fuel into custody, a complaint shall be filed charging that the vehicle was so unlawfully used, and the court shall fix a time for hearing upon the complaint. Notice of the hearing shall be given to all persons interested by publication at least ten days before the hearing in a legal newspaper published in such county or, if none is published in the county, in a legal newspaper of general circulation in the county. If the court finds at such hearing that such vehicle was used for the unlawful transportation of motor vehicle fuel or diesel fuel, judgment shall be entered directing that the fuel conveyed and any other personal property actually and directly used in connection with such violation shall be ordered sold by the court at a public sale on ten days' notice. The remaining proceeds, after the state motor vehicle fuel or diesel fuel tax and cost of collection have been remitted to the appropriate fund or person, shall be paid into the temporary school fund to be used for the support of the common schools as in the case of fines and forfeitures, and like proceedings shall be had against the vehicle as provided in section 66-529 where the person in charge is arrested and convicted.

When it appears that any undue delay will result in the disposition of the criminal proceedings against the person or persons arrested, the owner or lienor of any vehicle seized as provided in sections 66-527 to 66-530 may be proceeded against in the manner prescribed in section 66-530. The court shall not allow the claim or lien of any person or persons who, prior to the time the vehicle was seized, knew, should have known, or had good cause to believe that the vehicle was being used or would be or was likely to be used for the unlawful transportation of motor vehicle fuel or diesel fuel. In all cases the burden of proof shall be on such claimants to show that they did not know, should not have known, and did not have good cause to believe that such vehicle was being used or would be or was likely to be used for the unlawful transportation of motor vehicle fuel or diesel fuel.

Sections 66-697 to 66-6,116 shall be known and may be cited as the Compressed Fuel Tax Act.

The purpose of the Compressed Fuel Tax Act is to supplement the provisions of the tax upon motor fuels by imposing a tax upon all compressed fuel sold or distributed for use in motor vehicles registered or required to be registered for operation upon the highways of this state.

For purposes of the Compressed Fuel Tax Act, the definitions found in sections 66-6,100 to 66-6,105 shall be used.

Compressed fuel means compressed natural gas, liquefied petroleum gas, liquefied natural gas, butane, and any other type of compressed gas or compressed liquid suitable for fueling a motor vehicle. Compressed fuel does not include motor vehicle fuel as defined in section 66-482 or diesel fuel as defined in section 66-482.

Department means the Department of Revenue.

Gallon equivalent means:

(1) For compressed natural gas, the amount of compressed natural gas that is deemed to be the energy equivalent of a gallon of gasoline according to the National Institute of Standards and Technology Handbook 130 entitled Uniform Regulation for the Method of Sale of Commodities, Paragraph 2.27.1.3; or

(2) For liquefied natural gas, the amount of liquefied natural gas that is deemed to be the energy equivalent of a gallon of diesel fuel at diesel fuel's lower heating value of one hundred twenty-eight thousand seven hundred British thermal units, which amount shall be equal to six and six-hundredths pounds of liquefied natural gas.

Motor vehicle has the same definition as in section 60-339.

Person means any individual, firm, partnership, limited liability company, company, agency, association, corporation, state, county, municipality, or other political subdivision. Whenever a fine or imprisonment is prescribed or imposed in the Compressed Fuel Tax Act, the word person as applied to a partnership, a limited liability company, or an association means the partners or members thereof.

Retailer means any person engaged in the business of selling or otherwise providing compressed fuel to consumers of the fuel for use in motor vehicles. Retailer also includes any person, other than a consumer of compressed fuel, who has equipment capable of dispensing compressed fuel into a motor vehicle.

(1) Before engaging in business as a retailer, a person shall obtain a license to transact such business in the State of Nebraska. An application for a retailer's license shall be made to the department on a form prepared and furnished by the department. The application shall contain such information as the department deems necessary. If the applicant is an individual, the application shall include the applicant's social security number.

(2) After reviewing an application received in proper form, the department may issue to the applicant a retailer's license. The department may refuse to issue such license to any person according to the provisions of section 66-729. Each retailer's license shall be valid until suspended or revoked for cause or otherwise canceled and shall not be transferable.

(3) The department, for the first year of a new license or whenever it deems it necessary to insure compliance with the Compressed Fuel Tax Act, may require any retailer subject to the act to place with the department such security as it determines. The amount and duration of the security shall be fixed by the department and shall be approximately two times the estimated average quarterly tax liability payable by such retailer pursuant to the act, unless such retailer is required to file monthly tax returns pursuant to section 66-6,110, in which case the amount of the security shall be approximately three times the estimated monthly tax liability payable by the retailer. The security shall consist of a surety bond executed by a surety company duly licensed and authorized to do business within this state in the amount specified by the department. The security shall run to the department and be conditioned upon the payment of all taxes, interest, penalties, and costs for which such retailer is liable, whether such liability was incurred prior to or after the security is filed.

(1) In addition to the tax imposed pursuant to sections 66-6,108, 66-6,109, and 66-6,109.02, an excise tax in an amount set in subsection (2) of this section is levied and imposed on all compressed fuel sold for use in registered motor vehicles.

(2) The tax shall be:

(a) Seven and one-half cents per gallon or gallon equivalent through December 31, 2015;

(b) Eight cents per gallon or gallon equivalent beginning on January 1, 2016, through December 31, 2016;

(c) Eight and one-half cents per gallon or gallon equivalent beginning on January 1, 2017, through December 31, 2017;

(d) Nine cents per gallon or gallon equivalent beginning on January 1, 2018, through December 31, 2018; and

(e) Nine and one-half cents per gallon or gallon equivalent beginning on January 1, 2019.

Each retailer shall, in addition to all other taxes provided by law, pay an excise tax at the rate set pursuant to section 66-4,144 on all gallons or gallon equivalents of compressed fuel sold for use in registered motor vehicles. All sums of money received under this section shall be credited to the Highway Trust Fund. Credits and refunds of such tax allowed to retailers shall be paid from the Highway Trust Fund. The balance of the amount credited, after credits and refunds, shall be allocated to the Highway Restoration and Improvement Bond Fund if bonds are issued pursuant to subsection (2) of section 39-2223 and to the Highway Cash Fund if no bonds are issued pursuant to such subsection.

(1) In addition to the tax imposed by sections 66-6,107, 66-6,108, and 66-6,109.02, each retailer shall pay an excise tax in an amount set in subsection (2) of this section on all compressed fuel sold for use in registered motor vehicles.

(2) The tax shall be:

(a) Two and eight-tenths cents per gallon or gallon equivalent through December 31, 2015;

(b) Three and eight-tenths cents per gallon or gallon equivalent beginning on January 1, 2016, through December 31, 2016;

(c) Four and eight-tenths cents per gallon or gallon equivalent beginning on January 1, 2017, through December 31, 2017;

(d) Five and eight-tenths cents per gallon or gallon equivalent beginning on January 1, 2018, through December 31, 2018; and

(e) Six and eight-tenths cents per gallon or gallon equivalent beginning on January 1, 2019.

(1) Compressed fuel shall be exempt from the taxes imposed under the Compressed Fuel Tax Act when the fuel is used for buses equipped to carry more than seven persons for hire and engaged entirely in the transportation of passengers for hire within municipalities or within a radius of six miles thereof.

(2) The owner or agent of any bus equipped to carry more than seven persons for hire and engaged entirely in the transportation of passengers for hire within municipalities, or within a radius of six miles thereof, in lieu of the excise tax provided for in the act, shall pay an equalization fee of a sum equal to twice the amount of the registration fee applicable to such vehicle under the laws of this state. Such equalization fee shall be paid in the same manner as the registration fee and be disbursed and allocated as registration fees.

(3) Nothing in this section shall be construed as permitting compressed fuel to be sold tax exempt. The department shall refund tax paid on compressed fuel used in buses deemed exempt by this section.

(1) For tax periods beginning on and after July 1, 2009, at the time of filing the return required by section 66-6,110, the retailer shall, in addition to the other taxes provided for by law, pay a tax at the rate of five percent of the average wholesale price of gasoline calculated pursuant to section 66-489.02 for the gallons of the compressed fuel as shown by the return, except that there shall be no tax on the compressed fuel reported if it is otherwise exempted by the Compressed Fuel Tax Act.

(2) All sums of money received under this section shall be credited to the Highway Trust Fund. Credits and refunds of such tax allowed to producers, suppliers, distributors, wholesalers, or importers shall be paid from the Highway Trust Fund. The balance of the amount credited, after credits and refunds, shall be allocated as follows:

(a) Sixty-six percent to the Highway Cash Fund for the Department of Transportation;

(b) Seventeen percent to the Highway Allocation Fund for allocation to the various counties for road purposes; and

(c) Seventeen percent to the Highway Allocation Fund for allocation to the various municipalities for street purposes.

Each retailer shall file a tax return with the department on forms prescribed by the department. Annual returns are required if the retailer's yearly tax liability is less than two hundred fifty dollars. Quarterly returns are required if the retailer's yearly tax liability is at least two hundred fifty dollars but less than six thousand dollars. Monthly returns are required if the retailer's yearly tax liability is at least six thousand dollars. The return shall contain a declaration by the person making the return to the effect that the statements contained in the return are true and are made under penalties of law, which declaration has the same force and effect as a verification of the return and is in lieu of such verification. The return shall show such information as the department reasonably requires for the proper administration and enforcement of the Compressed Fuel Tax Act. The retailer shall file the return in such format as prescribed by the department on or before the twentieth day of the next succeeding calendar month following the reporting period to which it relates. If the final filing date falls on a Saturday, Sunday, or legal holiday, the next secular or business day is the final filing date. The return is filed on time if transmitted or postmarked before midnight of the final filing date.

The taxes imposed by sections 66-6,107, 66-6,108, and 66-6,109 shall be computed by each retailer by multiplying the tax rate established in sections 66-6,107, 66-6,108, and 66-6,109 by the number of gallons or gallon equivalents of compressed fuel sold for use in registered motor vehicles.

All taxes, interest, and penalties collected under the Compressed Fuel Tax Act shall be remitted to the State Treasurer for credit to the Highway Trust Fund or Highway Cash Fund as appropriate.

(1) In lieu of the expense of remitting the compressed fuel tax and complying with the statutes and rules and regulations related thereto, every retailer shall be entitled to deduct and withhold a commission of two percent upon the first five thousand dollars and one-half of one percent upon all amounts in excess of five thousand dollars remitted each tax period.

(2) Except as otherwise provided in the Compressed Fuel Tax Act, the per-gallon amount of the tax shall be added to the selling price of every gallon of such compressed fuel sold in this state and shall be collected from the purchaser so that the ultimate consumer bears the burden of the tax. The tax shall be a direct tax on the retail or ultimate consumer precollected for the purpose of convenience and facility to the consumer. The levy and assessment on the retailer as specified in the act shall be as an agent of the state for the precollection of the tax. The provisions of this section shall in no way affect the method of collecting the tax as provided in the act. The tax imposed by this section shall be collected and paid at the time, in the manner, and by those persons specified in the act.

(3) In consideration of receiving the commission provided under subsection (1) of this section, the retailer shall not be entitled to any deductions, credits, or refunds arising out of such retailer's failure or inability to collect any such taxes from any subsequent purchaser of compressed fuel.

(4) A retailer shall not be entitled to a commission provided under subsection (1) of this section for the amount of any understatement or refund of any such taxes collected as a result of a final assessment occurring pursuant to a notice of deficiency determination under section 66-722.

Every retailer shall prepare and maintain such records as the department reasonably requires with respect to inventories, receipts, purchases, and sales or other dispositions of compressed fuel. The records required by this section shall be retained for a minimum period of three years or for five years if the required returns or reports are not filed and shall be available at all reasonable times for audit and examination by the department to determine liability for the payment of the taxes and penalties under the Compressed Fuel Tax Act.

(1) The fuel supply tank of a motor vehicle registered or required to be registered for operation on the highway shall not contain or be used with compressed fuel unless the taxes imposed by the Compressed Fuel Tax Act are paid to the retailer of the fuel at the time the fuel is purchased. Any person who violates this section is guilty of a Class IV misdemeanor and, in addition to the taxes imposed by the act, is subject to an administrative penalty of one thousand dollars for each violation to be assessed and collected by the department. All such penalties collected shall be remitted to the State Treasurer for credit to the Highway Trust Fund. All such penalties shall be assessed against the owner of the vehicle as of the date of the violation.

(2) The department shall by rule or regulation adopt a standard miles-per-gallon rating for compressed fuel transport and delivery vehicles that are not equipped with a separate fuel supply tank. The miles-per-gallon rating adopted shall be used by the owners of the vehicles to calculate the amount of fuel tax owed to the state on the fuel consumed from the vehicle's cargo tank for purposes of operating the vehicle. The owners of the vehicles shall pay the excise taxes imposed by the act and make a report concerning the taxes to the department in like manner, form, and time as is required by the act for retailers of compressed fuel.

(3) For purposes of this section:

(a) Owner means registered owner, titleholder, lessee entitled to possession of the motor vehicle, or anyone otherwise maintaining a possessory interest in the motor vehicle, but does not include anyone who, without participating in the use or operation of the motor vehicle and otherwise not engaged in the purpose for which the motor vehicle is being used, holds indicia of ownership primarily to protect his or her security interest in the motor vehicle or who acquired ownership of the motor vehicle pursuant to a foreclosure of a security interest in the motor vehicle; and

(b) Use means to operate, fuel, or otherwise employ.

The department shall enforce the Compressed Fuel Tax Act and the rules and regulations adopted pursuant to the act. The department may adopt and promulgate rules and regulations to carry out the act.

For purposes of the Compressed Fuel Tax Act and sections 66-482 to 66-4,149, 66-501 to 66-531, and 66-712 to 66-736:

(1) Department means the Department of Revenue;

(2) Motor fuel means any fuel defined as motor vehicle fuel in section 66-482, any fuel defined as diesel fuel in section 66-482, and any fuel defined as compressed fuel in section 66-6,100;

(3) Motor fuel laws means the Compressed Fuel Tax Act and sections 66-482 to 66-4,149, 66-501 to 66-531, and 66-712 to 66-736; and

(4) Person means any individual, firm, partnership, limited liability company, company, agency, association, corporation, state, county, municipality, or other political subdivision. Whenever a fine, imprisonment, or both are prescribed or imposed in sections 66-712 to 66-736, the word person as applied to a partnership, a limited liability company, or an association means the partners or members thereof.

(1) Any person operating as a retailer of motor vehicle fuel or diesel fuel in this state shall obtain a license from the department. A separate license shall be issued for each retail location operated by such person.

(2) Every retailer shall keep a complete and accurate record of all motor fuels, to be based on gross gallons, received, purchased, or obtained, which record shows the name and address of the person from whom each transfer or purchase of motor fuels was made, the point from which shipped or delivered, the point at which received, the method of delivery, the quantity of each transfer or purchase, and the total amount of motor fuels sold at retail during the month.

(3) The records shall also include all exempt sales of motor fuels, the date of sale, the quantity sold, and the identity of the purchaser.

(4) The records required by this section shall be retained and be available for audit and examination by the department or its authorized agents during regular business hours for a period of three years.

(1) Any person owning or possessing motor fuel in this state, including motor fuel stored at a pipeline terminal or barge terminal, for distribution, sale, or delivery in this state shall obtain a license from the department unless such person is already licensed under other sections of the motor fuel laws and is reporting all transactions involving any motor fuel.

(2) Every person licensed under subsection (1) of this section shall keep a complete and accurate record of all motor vehicle fuel, to be based on gross gallons, (a) received, purchased, or obtained, which record shall show the name and address of the person from whom each transfer or purchase of motor vehicle fuel was made, the point from which shipped or delivered, the point at which received, the method of delivery, and the quantity of each transfer or purchase, and (b) delivered or sold, which record shall show the name of the person to whom each transfer or sale of motor vehicle fuel was made, the point from which shipped or delivered, the point at which received, the method of delivery, and the quantity of each transfer or sale.

(3) Every person licensed under subsection (1) of this section shall keep a complete and accurate record of all diesel fuel to include the same information required in subsection (2) of this section and the sales of exempt diesel fuel showing the identity of the purchaser and the quantity sold. The sales of exempt diesel fuel shall include the total exempt sales during the month to each retailer accepting exemption certificates from his or her customers.

(1) All producers, suppliers, distributors, wholesalers, and importers and other persons selling motor fuel for resale that have been taxed under the motor fuel laws shall include on all invoices or other billing documents for the motor fuel the amount of the fuel tax or a statement that the Nebraska fuel taxes have been paid on the motor fuel.

(2) If the invoice or other billing document does not contain the amount of the tax or the statement that the Nebraska fuel taxes have been paid, the motor fuel shall be presumed to be untaxed and the purchaser shall be liable for the tax on such fuel.

(3) Any licensed producer, supplier, distributor, wholesaler, or importer who has recorded his or her liability for the tax on the motor fuel with the intent to remit the tax on the next return that is due may make the statement required by this section.

(1) The department may require such other information as it deems necessary on any report, return, or other statement under the motor fuel laws.

(2) The Tax Commissioner may require any of the reports, returns, or other filings due from any motor fuels licensees to be filed electronically.

(3) The department shall prescribe the formats or procedures for electronic filing. To the extent not inconsistent with requirements of the motor fuel laws, the department shall adopt formats and procedures that are consistent with other states requiring electronic reporting of motor fuel information.

(4) Any person who does not file electronically when required or who fails to use the prescribed formats and procedures shall be considered to have not filed the return, report, or other filing.

(5) For purposes of the electronic funds transfer requirements contained in section 77-1784, motor vehicle fuel tax, diesel fuel tax, compressed fuel tax, and all other fuel-related tax programs administered by the department shall be considered as comprising one tax program.

(1) Any person who neglects or refuses to file the report or return due for any period or to pay the tax due for any period within the time prescribed for the filing of such report or return or for the payment of such tax under the motor fuel laws shall automatically accrue a penalty of fifty dollars.

(2) Any person who neglects or refuses to file the report or return due for any period or to pay the tax due for any period within ten days after the time prescribed for the filing of such report or return or the payment of such tax under the motor fuel laws shall, in addition to the penalty in subsection (1) of this section, be subject to the larger of:

(a) A penalty of one hundred dollars; or

(b) A penalty of ten percent of the tax not paid.

(3)(a) Notwithstanding anything in subsection (1) or (2) of this section to the contrary, no penalty shall be imposed upon any person who voluntarily reports an underpayment of tax by filing an amended return and paying such tax if such amended return is filed and payment is made within thirty days after the date such tax was due.

(b) Except as provided in subsection (8) of this section, interest shall not be waived on any additional tax due as reported on any amended return, and such interest shall be computed from the date such tax was due.

(4) Any person who neglects or refuses to report and pay motor fuel tax on methanol, naphtha, benzine, benzol, kerosene, or any other volatile, flammable, or combustible liquid that is blended with motor vehicle fuel or undyed diesel fuel shall be subject to a penalty equal to one hundred percent of the tax not paid or one thousand dollars, whichever is larger. Such penalty shall be in addition to the motor fuel tax due and all other penalties provided by law.

(5) If any person knowingly files a false report or return, the penalty shall be equal to one hundred percent of the tax not paid or one thousand dollars, whichever is larger, which penalty shall be in addition to all other penalties provided by law.

(6) Any person who knowingly conducts any activities requiring a license or permit under the motor fuel laws without a license or permit or after a license or permit has been surrendered, suspended, or canceled shall automatically accrue a penalty of one hundred dollars per day for each day such violation continues.

(7) The department may in its discretion waive all or any portion of the penalties incurred upon sufficient showing by the taxpayer that the failure to file or pay is not due to negligence, intentional disregard of the law, rules, or regulations, intentional evasion of the tax, or fraud committed with intent to evade the tax or that such penalties should otherwise be waived.

(8) The department may in its discretion waive any and all interest incurred upon sufficient showing by the taxpayer that such interest should be waived.

(9) All penalties collected by the department under this section shall be remitted to the State Treasurer for credit to the Highway Trust Fund.

The department may pay to any person, other than a state officer or employee, who furnishes original information that any person has failed to file the reports required on motor vehicle fuel or diesel fuel imported into the State of Nebraska or has failed to pay the tax on the sale or use of motor vehicle fuel, diesel fuel, or compressed fuel as provided by the laws of this state, such a share of the tax and penalties recovered as the department may deem reasonable and just, not exceeding thirty percent, if it appears that the recovery was had in consequence of the information furnished.

(1) Any license or permit issued by the department under the motor fuel laws may be suspended for the following reasons:

(a) Cancellation of security;

(b) Failure to provide additional security as required;

(c) Failure to file any report or return, filing an incomplete report or return, or not filing electronically, within the time provided;

(d) Failure to pay taxes due within the time provided;

(e) Filing of any false report, return, statement, or affidavit, knowing it to be false;

(f) Delivering motor fuel to a Nebraska destination if Nebraska is not listed as the destination state on the original bill of sale, bill of lading, or manifest except as authorized under section 66-503;

(g) Failure to remain in compliance with requirements of the State Fire Marshal regarding underground storage tanks;

(h) Failure to remain in compliance with requirements of the Department of Agriculture regarding weights and measures;

(i) Using or placing dyed diesel fuel in a motor vehicle except as authorized under section 66-495.01;

(j) No longer being eligible to obtain a license or permit; or

(k) Any other violation of the motor fuel laws or the rules and regulations.

(2) The department shall mail notice of suspension of any license or permit.

(3) The licensee or permitholder may, within sixty days after the mailing of the notice of such suspension, petition the Department of Revenue in writing for a hearing and reconsideration of such suspension. If a petition is filed, the department shall, within ten days of receipt of the petition, set a hearing date at which the licensee or permitholder may show cause why his or her suspended license or permit should not be canceled. The department shall give the licensee or permitholder reasonable notice of the time and place of such hearing. Within a reasonable time after the conclusion of the hearing, the department shall issue an order either reinstating or canceling such license or permit.

(4) If a petition is not filed within the sixty-day period, the suspended license or permit shall be canceled by the department at the expiration of the period.

(5) The department shall not issue a new permit or license to the same person for one year from the date of cancellation. Any reissuance of a permit or license to the same person within three years from the date of cancellation shall require a reinstatement fee of one hundred dollars to be submitted to the department. The department shall remit the fee to the State Treasurer for credit to the Highway Cash Fund.

(6) Suspension or cancellation of a license or permit issued by the department shall not relieve any person from making or filing the reports or returns required by the motor fuel laws in the manner or within the time required.

All notices by the department required by the motor fuel laws shall be mailed to the address of the licensee or permitholder as shown on the records of the department.

(1) As soon as practical after a return is filed, the department shall examine it to determine the correct amount of tax. If the department finds that the amount of tax shown on the return is less than the correct amount, it shall notify the taxpayer of the amount of the deficiency determined.

(2) If any person fails to file a return or has improperly purchased motor fuel without the payment of tax, the department shall estimate the person's liability from any available information and notify the person of the amount of the deficiency determined.

(3) The amount of the deficiency determined shall constitute a final assessment together with interest and penalties sixty days after the date on which notice was mailed to the taxpayer at his or her last-known address unless a written protest is filed with the department within such sixty-day period.

(4) The final assessment provisions of this section shall constitute a final decision of the agency for purposes of the Administrative Procedure Act.

(5) An assessment made by the department shall be presumed to be correct. In any case when the validity of the assessment is questioned, the burden shall be on the person who challenges the assessment to establish by a preponderance of the evidence that the assessment is erroneous or excessive.

(6)(a) Except in the case of a fraudulent return or of neglect or refusal to make a return, the notice of a proposed deficiency determination shall be mailed within three years after the twentieth day of the month following the end of the period for which the amount proposed is to be determined or within three years after the return is filed, whichever period expires later.

(b) The taxpayer and the department may agree, prior to the expiration of the period in subdivision (a) of this subsection, to extend the period during which the notice of a deficiency determination can be mailed. The extension of the period for the mailing of a deficiency determination shall also extend the period during which a refund can be claimed.

(1) Any corporate officer or employee with the authority to decide whether the corporation will pay the taxes imposed upon a corporation by the motor fuel laws, to file any reports or returns required by the motor fuel laws, or to perform any other act required of a corporation under the motor fuel laws shall be personally liable for the payment of the taxes, interest, penalties, or other administrative penalties in the event of willful failure on his or her part to have the corporation perform such act. Such taxes shall be collected in the same manner as provided under the Uniform State Tax Lien Registration and Enforcement Act.

(2) Within sixty days after the day on which the notice and demand are made for the payment of such taxes, any corporate officer or employee seeking to challenge the Tax Commissioner's determination as to his or her personal liability for the corporation's unpaid taxes may petition for a redetermination. The petition may include a request for the redetermination of the personal liability of the corporate officer or employee, the redetermination of the amount of the corporation's unpaid taxes, or both. If a petition for redetermination is not filed within the sixty-day period, the determination becomes final at the expiration of the period.

(3) If the requirements prescribed in subsection (2) of this section are satisfied, the Tax Commissioner shall abate collection proceedings and shall grant the corporate officer or employee an oral hearing and give him or her ten days' notice of the time and place of such hearing. The Tax Commissioner may continue the hearing from time to time as necessary.

(4) Any notice required under this section shall be served personally or by mail in the manner provided in section 66-721.

(5) If the Tax Commissioner determines that further delay in the collection of such taxes from the corporate officer or employee will jeopardize future collection proceedings, nothing in this section shall prevent the immediate collection of such taxes.

(6) For purposes of this section:

(a) Corporation shall mean any corporation and any other entity that is taxed as a corporation under the Internal Revenue Code;

(b) Taxes shall mean all taxes and additions to taxes including interest and penalties imposed under the motor fuel laws which are administered by the Tax Commissioner; and

(c) Willful failure shall mean that failure which was the result of an intentional, conscious, and voluntary action.

All deficiencies determined by the department and any tax paid after the time provided shall accrue interest at the rate specified in section 45-104.02, as such rate may from time to time be adjusted, on such deficiency or late payment from the date such tax was due to the date of payment.

The department may examine the records of any person holding a license or permit, required to hold a license or permit, or purchasing motor fuel without the payment of tax at any time during regular business hours and make such other investigations as it deems necessary for the proper and efficient administration and enforcement of the motor fuel laws.

(1) The department may adjust all errors in payment, refund tax paid on motor fuel destroyed, refund tax overpaid on motor fuel, and refund an amount equal to the per-gallon tax imposed by this state on sales of motor fuel on which tax was paid in this state but which was sold in a state other than Nebraska.

(2)(a) Motor fuels shall be exempt from the taxes imposed by sections 66-489, 66-489.02, 66-4,105, 66-4,140, 66-4,145, and 66-4,146 when the fuels are used for agricultural, quarrying, industrial, or other nonhighway use.

(b) The department shall refund tax paid on motor fuels used for an exempt purpose. The purchaser of tax-paid motor fuels used for an exempt purpose shall file a claim for refund with the department on forms prescribed by the department and shall provide such documentation and maintain such records as the department reasonably requires to substantiate that the fuels were used for exempt purposes.

(c) The refund claim shall include: (i) The name of claimant; (ii) the make, horsepower, and other mechanical description of machinery in which the motor fuels were used; (iii) a statement as to the source or place of business where such motor fuels, used solely for agricultural, quarrying, industrial, or other nonhighway uses, were acquired; that no part of such motor fuels were used in propelling licensed motor vehicles; and that the motor fuels for which refund of the tax thereon is claimed were used solely for agricultural, quarrying, industrial, or other nonhighway uses; and (iv) any other information deemed necessary by the department.

(d) The department shall deduct (i) from each claim for refund of tax paid on purchases of motor vehicle fuels under this subsection two and one-quarter cents per gallon through December 31, 2004, and commencing January 1, 2010, and three and one-half cents per gallon commencing January 1, 2005, through December 31, 2009, of the tax paid and (ii) from each claim for refund of tax paid on purchases of diesel fuel under this subsection one cent per gallon of the tax paid.

(e) The department shall transmit monthly to the State Treasurer a report of the number of gallons of motor vehicle fuel for which refunds have been approved under this subsection. Through December 31, 2004, and commencing January 1, 2010, the State Treasurer shall thereupon transfer from the Highway Trust Fund to the Agricultural Alcohol Fuel Tax Fund one and one-quarter cents per gallon approved for refund, and commencing January 1, 2005, through December 31, 2009, the State Treasurer shall thereupon transfer from the Highway Trust Fund (a) to the Ethanol Production Incentive Cash Fund one and one-quarter cents per gallon approved for refund and (b) to the Agricultural Alcohol Fuel Tax Fund one and one-quarter cents per gallon approved for refund.

(3) No refund shall be allowed unless a claim is filed setting forth the circumstances by reason of which refund should be allowed. Such claim shall be filed with the department within three years from the date of the payment of the tax.

(4) In each calendar year, no claim for refund related to motor vehicle fuel, diesel fuel, aircraft fuel, or compressed fuel can be for an amount less than twenty-five dollars.

(5) The department shall administer and enforce this section. The department may call to its aid when necessary any member of the Nebraska State Patrol, any police officer, any county attorney, or the Attorney General. The employees of the department are empowered to stop and inspect motor vehicles, to inspect premises, and temporarily to impound motor vehicles or motor fuels when necessary to administer this section.

(6) The department may adopt and promulgate such rules and regulations as are necessary for the prompt and effective enforcement of this section.

(7) Any claimant for refund of motor fuels tax under this section who is unable to produce the original copy of any invoice to substantiate the refund for the reason that the same has been lost, mutilated, or destroyed may make proof of his or her claim by affidavit and such other evidence as may be required by the department, and if such claim is verified by investigation, such claim may be allowed.

(8) The changes made to this section by Laws 2004, LB 983, apply to motor fuels purchased during any tax year ending or deemed to end on or after January 1, 2005, under the Internal Revenue Code.

(1) It shall be unlawful for any person to:

(a) Knowingly import, distribute, sell, produce, refine, compound, blend, or use any motor vehicle fuel, diesel fuel, or compressed fuel in the State of Nebraska without remitting the full amount of tax imposed by the provisions of the motor fuel laws;

(b) Refuse or knowingly and intentionally fail to make and file any return, report, or statement required by the motor fuel laws in the manner or within the time required;

(c) Knowingly and with intent to evade or to aid or abet any other person in the evasion of the tax imposed by the motor fuel laws (i) make any false or incomplete report, return, or statement, (ii) conceal any material fact in any record, report, return, or affidavit provided for in the motor fuel laws, (iii) improperly claim any exemption from tax imposed by the motor fuel laws, or (iv) create or submit any false documentation purporting to show that tax-free fuel has been purchased or sold tax paid or that tax-paid fuel has been used for a tax-exempt purpose;

(d) Knowingly conduct any activities requiring a license under the provisions of the Petroleum Release Remedial Action Act, the Compressed Fuel Tax Act, and Chapter 66, articles 4, 5, and 7, without a license or after a license has been surrendered, suspended, or canceled;

(e) Knowingly conduct any activities requiring a permit under the provisions of the motor fuel laws without such permit or after such permit has been surrendered, suspended, or canceled;

(f) Knowingly assign or attempt to assign a license or permit;

(g) Knowingly fail to keep and maintain books and records required by the motor fuel laws;

(h) Knowingly fail or refuse to pay a fuel tax when due;

(i) Knowingly make any false statement in connection with an application for the refund of any money or tax;

(j) Fail or refuse to produce for inspection any license or permit issued under the motor fuel laws; or

(k) Knowingly violate any of the motor fuel laws or any rule or regulation under the motor fuel laws.

(2) Any person who violates subdivision (1)(b), (f), (h), or (k) of this section shall be guilty of a Class IV felony. Failing to report or pay taxes due shall constitute a separate offense for each reporting period.

(3) Any person who violates subdivision (1)(a), (c), (d), (g), or (i) of this section shall be guilty of a Class IV felony if the amount of tax involved is less than five thousand dollars and a Class III felony if the amount of tax is five thousand dollars or more. Failing to report or pay taxes due shall constitute a separate offense for each reporting period.

(4) Any person who violates subdivision (1)(e) or (j) of this section shall be guilty of a separate Class IV misdemeanor for each day of operation.

An offense committed in violation of section 66-727 shall be deemed an act committed in part in the principal office of the department. The Attorney General shall have concurrent jurisdiction with the county attorney in the prosecution of such offenses which may be conducted in any county in which the offender resides or has a place of business or in which the crime was committed.

After reviewing an application received in proper form, the department may issue to the applicant a permit or license. The department may refuse to issue a permit or license to any person:

(1) Who previously had a permit or license issued under the motor fuel laws of any state which, prior to the time of filing the application, has been suspended or canceled for cause;

(2) Who is a subterfuge for the real party in interest whose license, prior to the time of filing the application, has been suspended or canceled for cause;

(3) Which has as a partner, limited liability company member, or shareholder, with a ten percent or larger ownership interest, any person who is unable to obtain a license or permit in his or her own name;

(4) Who is not in compliance with requirements of the State Fire Marshal regarding underground storage tanks;

(5) Who is not in compliance with the Department of Agriculture regarding weights and measures;

(6) Who has been convicted of a felony in the last ten years; or

(7) Upon other sufficient cause being shown.

Before such refusal, the department shall grant the applicant a hearing and shall grant him or her at least ten days' written notice of the time and place.

(1) The department shall develop, implement, and maintain a computer system for the automated recording and analysis of the motor vehicle fuel tax, the diesel fuel tax, and related information. The system shall be capable of directly accepting and recording data filed by magnetic media.

(2) The department shall share information pertaining to motor fuel use, tax collection, and related information with the Department of Agriculture, the State Fire Marshal, and the Nebraska State Patrol. The information shall be made available to these agencies and to any other state, federal, or local agency with a valid need for the information as determined by the Department of Revenue.

(3) The department may forward to any agency in this state, to the officials to whom are entrusted the enforcement of the motor fuel tax laws of any other state, the District of Columbia, the United States, its territories and possessions, and the provinces or the Dominion of Canada, or to any other person any information which the department may have relative to the receipt, storage, delivery, sale, use, or other disposition of motor fuel.

(4) The department may forward to any person statistical information, lists of licensees or permitholders, or totals for any licensee or permitholder.

With funds appropriated for such purposes, the department, the Attorney General, and the Nebraska State Patrol shall each dedicate staff personnel and associated costs for the training of personnel and the review, development, enforcement, and prosecution of the motor fuel laws and the penalties associated with the failure to completely comply with the motor fuel laws, rules, and regulations.

It is the intent of this Legislature that the activities of the department, the Attorney General, and the Nebraska State Patrol be coordinated with activities of each other and all other local, state, and federal agencies involved with the development and enforcement of related laws, rules, and regulations.

(1) All motor fuel producers, suppliers, distributors, wholesalers, and importers licensed under section 3-149 or 66-484 and all retailers licensed under section 66-6,106 shall jointly furnish a cash bond to the state to secure the payment of all fuel taxes.

(2) The cash bond shall be held by the State Treasurer in a motor fuel trust fund, which fund is hereby created, for the benefit of producers, suppliers, distributors, wholesalers, importers, and retailers. No producer, supplier, distributor, wholesaler, importer, or retailer shall have any claim or rights against the fund as a separate person. Any money in the diesel fuel importers trust fund and the motor vehicle fuel importers trust fund on March 30, 1995, shall be transferred to the motor fuel trust fund on such date.

(3) All funds in the trust fund available for investment shall be invested by the state investment officer pursuant to the Nebraska Capital Expansion Act and the Nebraska State Funds Investment Act and may be pooled with other funds for the purposes of section 72-1267.

(1) The contribution for the cash bond required in section 66-733 shall be collected by the department each tax period with the tax return for all such periods beginning on and after September 30, 1985. The amount due shall be deemed to be tax for the purpose of collection or refund.

(2) The amount collected each tax period from the motor fuel producers, suppliers, distributors, wholesalers, importers, and retailers shall be the portion of the commission allowed which equals one-fourth of one percent of the total tax due.

(3) The contributions from the motor fuel producers, suppliers, distributors, wholesalers, importers, and retailers shall continue to be collected until the amount in the trust fund, including interest earned, is equal to one percent of the total motor fuel tax collected during the preceding year. The contributions shall resume whenever the amount is less than one-half of one percent of the motor fuel tax collected during the preceding year.

(4) The department shall notify the producers, suppliers, distributors, wholesalers, importers, and retailers whenever it is necessary for the contributions to resume. The contributions shall begin with the first tax return that is due at least thirty days after notice is provided by the department.

(1) Money in the trust fund created pursuant to section 66-733 shall be used solely for the purpose of preventing a loss to the state for fuel taxes that are not paid.

(2) Whenever the department determines that fuel tax has been delinquent for ninety days, it shall certify the delinquent amount of tax and the interest due thereon to the State Treasurer. The certification shall include the specific fund into which the tax would have been deposited if received.

(3) Upon receipt of the certification, the State Treasurer shall transfer the amount to the fund identified.

(4) Such transfer shall not affect the liability of the producer, supplier, distributor, wholesaler, importer, or retailer to the state.

(1) A refund of the contributions made pursuant to section 66-734 shall be made only when there is a refund of the tax on which the contribution is calculated or when there was an error in the calculation.

(2) If the cash bond is abolished, the money in the trust fund shall be returned to the producers, suppliers, distributors, wholesalers, importers, and retailers who are then licensed by increasing the commission by the amount specified for the contributions. The reduction in collections because of the additional amount allowed to the producers, suppliers, distributors, wholesalers, importers, and retailers shall be replaced by a transfer from the cash bond to the appropriate highway fund.

There is hereby created the Motor Fuel Tax Enforcement and Collection Cash Fund. Such fund shall consist of appropriations to the fund and money transferred to it pursuant to section 39-2215. The fund shall be used exclusively for the costs of the Department of Revenue in carrying out its duties under the Compressed Fuel Tax Act, the Petroleum Release Remedial Action Act, the State Aeronautics Act, and sections 66-482 to 66-4,149, 66-501 to 66-531, and 66-712 to 66-736 and other related costs for the Department of Agriculture and the Nebraska State Patrol, except that transfers may be made from the fund to the General Fund at the direction of the Legislature. Any money in the Motor Fuel Tax Enforcement and Collection Cash Fund available for investment shall be invested by the state investment officer pursuant to the Nebraska Capital Expansion Act and the Nebraska State Funds Investment Act.

(1) The Governor or his or her designated representative may negotiate an agreement with the governing body of any federally recognized Indian tribe within the State of Nebraska concerning the collection and dissemination of any motor fuel tax on sales of motor fuel made on a federally recognized Indian reservation or on land held in trust for a Nebraska-based federally recognized Indian tribe. The agreement shall specify:

(a) Its duration;

(b) Its purpose;

(c) Provisions for administering, collecting, and enforcing the agreement;

(d) Remittance of taxes collected;

(e) The division of the proceeds of the tax between the parties;

(f) The method to be employed in accomplishing the partial or complete termination of the agreement; and

(g) Any other necessary and proper matters.

(2) The agreement shall require that the state motor fuel tax and any tribal motor fuel tax be identical in rate and base of transactions.

(3) An Indian tribe accepting an agreement under this section shall agree not to license or otherwise authorize an individual tribal member or other person or entity to sell motor fuel in violation of the terms of the agreement.

For purposes of sections 66-821 to 66-824, unless the context otherwise requires:

(1) Gasohol shall mean gasoline which contains a minimum of ten percent blend of an agricultural ethyl alcohol whose purity shall be at least ninety-nine percent alcohol, excluding denaturant, produced from cereal grains or domestic agricultural commodities; and

(2) Department shall mean the Department of Transportation.

The department shall, not later than July 1, 1980, implement a program of using gasohol as fuel in motor vehicles owned or operated by the department which are designed to operate on such fuel.

The department shall provide storage and dispensing facilities at various sites in the state which will make gasohol reasonably accessible to all department vehicles equipped for its use.

The department shall be required to comply with sections 66-821 to 66-824 only to the extent that gasohol supplies are available. The department shall purchase gasohol for use in its motor vehicles only if, and to the extent that, the cost of the gasohol does not exceed the cost of the fuel otherwise used in such vehicle by more than ten percent.

The Legislature hereby finds and declares that the use of solar energy and wind energy in Nebraska: (1) Can help reduce the nation's reliance upon irreplaceable domestic and imported fossil fuels; (2) can reduce air and water pollution resulting from the use of conventional energy sources; (3) requires effective legislation and efficient administration of state and local programs to be of greatest value to its citizens; and (4) is of such importance to the public health, safety, and welfare that the state should take appropriate action to encourage its use.

As the use of solar energy and wind energy devices increases, the possibility of future shading and obstruction of such devices by structures or vegetation will also increase. The Legislature therefor declares that the purpose of sections 66-901 to 66-914 is to promote the public health, safety, and welfare by protecting access to solar energy and wind energy as provided in sections 66-901 to 66-914.

For purposes of sections 66-901 to 66-914, unless the context otherwise requires, the definitions found in sections 66-902.01 to 66-909.04 apply.

Decommissioning security means a security instrument that is posted or given by a wind developer to a municipality or other governmental entity to ensure sufficient funding is available for removal of a wind energy conversion system and reclamation at the end of the useful life of such a system.

Solar energy shall mean radiant energy, direct, diffuse, or reflected, received from the sun at wavelengths suitable for conversion into thermal, chemical, or electrical energy.

Solar energy collector shall mean a device, structure, or part of a device or structure which is used primarily to transform solar energy into thermal, chemical, or electrical energy. It includes any space or structural components specifically designed to retain heat derived from solar energy, any mechanism that converts wind energy into electrical energy, and any photosynthetic process specifically maintained to produce photosynthetic products.

Solar energy system shall mean a complete design or assembly consisting of a solar energy collector, an energy storage facility when used, and components for the distribution of transformed energy to the extent that they cannot be used jointly with a conventional energy system. Passive solar energy systems are included in this definition but not to the extent that they fulfill other functions, such as structural or recreational.

Passive solar energy system shall mean any space or structural components that are specifically designed to retain heat derived from solar energy, including ponds for evaporative cooling, and any moving parts that increase heat retention by the system.

Structure shall mean anything constructed, installed, or portable that requires for normal use a location on a parcel of land. This includes any movable structure located on land which can be used either temporarily or permanently for housing, business, commercial, agricultural, or office purposes. It also includes fences, billboards, poles, pipelines, transmission lines, and advertising signs.

Solar agreement shall mean a right, whether or not stated in the form of a restriction, easement, covenant, or condition, in any deed, will, or other instrument executed by any person for the purpose of insuring adequate access of a solar energy system to solar energy.

Wind energy shall mean the use of wind to produce electricity through the use of a wind energy conversion system.

Wind energy conversion system shall mean any device, supporting structure, mechanism, or series of mechanisms that uses wind for the production of electricity or a mechanical application.

Wind agreement means a right, whether or not stated in the form of a restriction, easement, covenant, or condition, in any deed, wind easement, wind option, lease, or lease option securing land for the study or production of wind-generated energy or any other instrument executed by or on behalf of any owner of land or air space for the purpose of allowing another party to study the potential for or to develop a wind energy conversion system on such land or in such air space.

Any property owner may grant a solar agreement or wind agreement in the same manner and with the same effect as a conveyance of any other interest in real property.

An instrument creating a land right or an option to secure a land right in real property or the vertical space above real property for a solar agreement or a wind agreement shall be created in writing, and the instrument, or an abstract, shall be filed, duly recorded, and indexed in the office of the register of deeds of the county in which the real property subject to the instrument is located. The instrument shall include, but the contents are not limited to:

(1) The names of the parties;

(2) A legal description of the real property involved;

(3) The nature of the interest created;

(4) The consideration paid for the transfer;

(5) A description of the improvements the developer intends to make on the real property, including, but not limited to: Roads; transmission lines; substations; wind turbines; and meteorological towers;

(6) A description of any decommissioning security or local requirements related to decommissioning; and

(7) The terms or conditions, if any, under which the interest may be revised or terminated.

An abstract under this section need not include the items described in subdivisions (4) through (7) of this section.

A solar agreement or wind agreement may be enforced by injunction or proceedings in equity or other civil action.

A solar agreement or wind agreement shall run with the land benefited and burdened and shall terminate upon the conditions stated in the solar agreement or wind agreement. The initial term of a solar agreement or wind agreement shall not exceed forty years, except that the parties to a solar agreement or wind agreement may extend or renew the initial term by mutual written agreement. A wind agreement shall terminate if development of a wind energy conversion system has not commenced within ten years after the effective date of the wind agreement, except that this period may be extended by mutual agreement of the parties to the wind agreement.

No interest in any wind or solar resource located on a tract of land and associated with the production or potential production of wind or solar energy on the tract of land may be severed from the surface estate.

All counties or municipalities having zoning or subdivision jurisdiction are hereby authorized to include considerations for the encouragement of solar energy and wind energy use and the protection of access to solar energy and wind energy in all applicable zoning regulations or ordinances and comprehensive development plans. Such considerations may include, but not be limited to, regulation of height, location, setback, and use of structures, the height and location of vegetation with respect to property boundary lines, the type and location of energy systems or their components, and the use of districts to encourage the use of solar energy systems and wind energy conversion systems and protect access to solar energy and wind energy. Comprehensive development plans may contain an element for protection and development of solar energy and wind energy access which will promote energy conservation and ensure coordination of solar energy and wind energy use with conventional energy use.

When the application of any zoning or subdivision regulation or ordinance would prevent or unduly restrict the use of solar energy systems or wind energy conversion systems, the governing body of the county or municipality having zoning or subdivision jurisdiction is authorized to grant a variance or exception from the strict application thereof so as to relieve such restriction and protect access to solar energy or wind energy if such relief may be granted without substantial detriment to the public good and without substantially impairing the intent and purpose of such regulation or ordinance.

(1) For purposes of this section:

(a) FAA approval means approval by the Federal Aviation Administration that meets the requirements set forth in Chapter 10 of the Federal Aviation Administration's 2020 Advisory Circular AC 70/7460-1M, Obstruction Marking and Lighting;

(b) Light-mitigating technology system means aircraft detection lighting or any other comparable system capable of reducing the impact of facility obstruction lighting while maintaining conspicuity sufficient to assist aircraft in identifying and avoiding collision with a wind energy conversion system;

(c) Repower means a substantial physical modification of at least seventy-five percent of the wind turbines in a wind energy conversion system that results in an increase of ten percent or more in nameplate capacity; and

(d) Wind energy conversion system means an electric generation facility consisting of ten or more wind turbines that are two hundred fifty feet or more in height and any accessory or appurtenant structures and buildings including substations, meteorological towers, electrical infrastructure, and transmission lines.

(2) Beginning July 1, 2025:

(a)(i) A developer, owner, or operator of a wind energy conversion system shall make application to the Federal Aviation Administration for FAA approval to install and operate a light-mitigating technology system on such wind energy conversion system as follows:

(A) Before a wind energy conversion system commences commercial operation in this state, if such system did not exist prior to July 1, 2025;

(B) Within thirty days after a wind energy conversion system existing prior to July 1, 2025, commences a repower; or

(C) If on July 1, 2025, such developer, owner, or operator has five years or less remaining on a power purchase agreement with an electric supplier for a wind energy conversion system, within thirty days after the existing power purchase agreement is extended or renewed or a new power purchase agreement is executed; and

(ii) Within twenty-four months after receiving FAA approval, the developer, owner, or operator of the wind energy conversion system shall install a light-mitigating technology system on wind turbines covered under such FAA approval; and

(b) Any developer, owner, or operator of a wind energy conversion system existing prior to July 1, 2025, that does not commence a repower shall on or before July 1, 2035, install a light-mitigating technology system on the wind turbines in such wind energy conversion system that meets Federal Aviation Administration requirements.

(3) Any application made pursuant to subsection (2) of this section shall be submitted in good faith and reasonably intended to obtain FAA approval. If FAA approval is not granted after application is made pursuant to such subsection, the wind energy conversion system may commence or continue, as applicable, commercial operation without a light-mitigating technology system.

(4) Any costs associated with the installation, implementation, operation, and maintenance of a light-mitigating technology system shall be the responsibility of the developer, owner, or operator of the wind energy conversion system.

(5) Nothing in this section shall be construed to require mitigation of light pollution to be carried out in a manner that conflicts with federal law or requirements, including requirements of the Federal Aviation Administration or the United States Department of Defense.

(6) Nothing in this section shall be construed to require any new or separate approval from any state or local governmental agency.

The Legislature finds, for purposes of sections 66-1001 to 66-1011, that:

(1) Our present dependence on foreign oil has created a danger to the public health and welfare and a need for a dependable source of energy;

(2) Conservation is one of the most prudent means of meeting our need for a dependable source of energy;

(3) There is an urgent and continuing need for every person and business in the state to conserve energy;

(4) There is an urgent and continuing need for capital to provide the initial investment necessary to make homes and other buildings more energy efficient;

(5) It would be prudent for our publicly owned electric utilities to supply this needed capital in order to avoid the greater costs of constructing new generation facilities; and

(6) Involvement by our publicly owned electric utilities in energy conservation programs serves a public purpose.

For purposes of sections 66-1001 to 66-1011, unless the context otherwise requires, the definitions found in sections 66-1003 to 66-1006 shall be used.

Customer shall mean the owner or renter of any residential, agricultural, or commercial building in the state for which there is purchased, from a utility, electricity to be used for either space heating or cooling or the heating of water for domestic purposes. Owners of mobile homes may be included in this definition at the option of the utility involved.

Energy conservation measure shall mean installing or using any:

(1) Caulking or weatherstripping of doors or windows;

(2) Furnace efficiency modifications involving electric service;

(3) Clock thermostats;

(4) Water heater insulation or modification;

(5) Ceiling, attic, wall, or floor insulation;

(6) Storm windows or doors, multiglazed windows or doors, or heat absorbing or reflective glazed window and door material;

(7) Devices which control demand of appliances and aid load management;

(8) Devices to utilize solar energy, biomass, or wind power for any energy conservation purpose, including heating of water and space heating or cooling, which have been identified by the Department of Environment and Energy as an energy conservation measure for the purposes of sections 66-1001 to 66-1011;

(9) High-efficiency lighting and motors;

(10) Devices which are designed to increase energy efficiency, the utilization of renewable resources, or both; and

(11) Such other conservation measures as the department shall identify.

Loan shall mean an extension of credit by a utility from its own capital or from capital raised by the Nebraska Investment Finance Authority pursuant to sections 58-201 to 58-272 to or for the benefit of a customer solely for the purchase or installation of energy conservation measures with repayment to be made through the utility's periodic billing system.

Utility shall mean a publicly owned electrical utility providing either wholesale or retail service within the state.

A utility may make loans pursuant to sections 66-1001 to 66-1011 and may contract with banks, financial experts, and such other advisors as may be necessary in its judgment to initiate and administer the loans.

A utility making a loan pursuant to section 66-1007 shall not:

(1) Operate an energy conservation plan for profit; or

(2) Supply or install energy conservation measures under its plan or own, either wholly or partially, any subsidiary involved in supplying or installing energy conservation measures under its plan.

(1) A customer borrowing from a utility under a plan adopted pursuant to sections 66-1001 to 66-1011 shall be allowed to contract with the utility for a repayment plan and shall be offered a repayment period of not less than three years and not more than twenty years.

(2) Upon default on a loan by a customer, after expending reasonable efforts to collect, a utility may treat the entire unpaid contract amount as due, but services to a residential, agricultural, or commercial customer may not be terminated as a result of such default. Default occurs when any amount due a utility under a plan adopted pursuant to sections 66-1001 to 66-1011, 70-625, 70-704, 81-1606 to 81-1626, and 84-162 to 84-167 is not paid within sixty days of the due date.

(3) Any customer obtaining a loan pursuant to section 66-1007 shall only use the funds to accomplish the purposes agreed upon at the time of the loan. If the borrower of any funds obtained pursuant to sections 66-1001 to 66-1011 uses such funds in a manner or for a purpose not authorized by this section, the total amount of the loan shall immediately become due and payable.

(4) Any amount due a utility on a loan pursuant to sections 66-1001 to 66-1011 which is not paid in full within sixty days of the due date shall become a lien as provided in this section on the real property concerned as to the full unpaid balance. No lien under this section shall be valid unless (a) the loan was signed by the party or parties shown on the indexes of the register of deeds to be the owners of record of such real property on the date of the loan and (b) the lien is filed not more than four months after the date of default, in the same office and in the same manner as mortgages in the county in which the real property is located. Such lien shall take effect and be in force from and after the time of delivering the same to the register of deeds for recording, and not before, as to all creditors and subsequent purchasers in good faith without notice, and such lien shall be adjudged void as to all such creditors and subsequent purchasers without notice whose deeds, mortgages, or other instruments shall be first recorded, except that such lien shall be valid between the parties. A publicly owned utility shall not maintain possession of any property which it may acquire pursuant to a lien authorized by this section for a period of time longer than is reasonably necessary to dispose of such property.

(5) Any loan made under a plan adopted pursuant to sections 66-1001 to 66-1011 shall not exceed fifteen thousand dollars, subject to any existing limitations under federal law. Any loan to be made by a utility which exceeds ten thousand dollars shall only be made in participation with a bank pursuant to a contract. The utility and the participating bank shall determine the terms and conditions of the contract.

(6) The Director of Environment and Energy may adopt and promulgate rules and regulations to carry out sections 66-1001 to 66-1011.

The powers granted under sections 66-1001 to 66-1011 to public power districts, municipal electric utilities, rural power districts, and electric cooperative corporations shall be supplemental to those powers granted in Chapter 18 or 70.

Any customer obtaining a loan pursuant to sections 66-1001 to 66-1011 shall only use the funds to accomplish the purposes agreed upon at the time of the loan. This section shall not be construed to prohibit an owner or renter from providing services himself or herself to accomplish the agreed-upon purposes. If the borrower of any funds obtained pursuant to sections 66-1001 to 66-1011 uses such funds in a manner or for a purpose not authorized by this section, the total amount of the loan shall immediately become due and payable.

(1) The Legislature finds that it is in the public interest to support the development of least cost energy sources, including support for research, development, and the prudent use of renewable and nonrenewable supply-side technologies. The Legislature further finds that it is in the public interest to encourage energy efficiency and the use of indigenous energy sources. Consistent with this policy, the public utilities in Nebraska shall practice integrated resource planning and include least cost options when evaluating alternatives for providing energy supply and managing energy demand in Nebraska.

(2) For purposes of this section:

(a) Integrated resource planning means a planning process for new energy resources that evaluates the full range of alternatives, including new generating capacity, power purchases, energy conservation and efficiency, cogeneration and district heating and cooling applications, and renewable energy resources, in order to provide adequate and reliable service to electric customers at the lowest system cost. The process shall take into account necessary features for system operation, such as diversity, reliability, dispatchability, and other factors of risk, shall take into account the ability to verify energy savings achieved through energy conservation and efficiency and the projected durability of such savings measured over time, and shall treat demand and supply resources on a consistent and integrated basis; and

(b) Least cost or least cost option means providing reliable electric services to electric customers which will, to the extent practicable, minimize life-cycle system costs, including adverse environmental effects, of providing the services. To the extent practicable, energy efficiency and renewable resources may be given priority in any least cost planning.

Section 66-1060 and the repeal of section 70-627.01 shall not be construed to affect the operating authority of any electric generation facility owned or operated by any Nebraska electric utility on September 9, 1995.

For purposes of sections 66-1062 to 66-1066:

(1) Energy conservation measure means a training, service, or operations program, facility alteration, or capital equipment acquisition designed to reduce wastewater or energy, utility, or water consumption, enhance revenue, or reduce operating or capital costs. Energy conservation measure includes:

(a) Repair or renovation of heating, ventilation, and air conditioning systems;

(b) Installation or repair of automated or computerized energy control systems;

(c) Replacement or modification of lighting fixtures;

(d) Insulation of a building structure or systems within that structure;

(e) Installation of energy recovery systems;

(f) Installation of cogeneration systems that produce steam or forms of energy such as heat, as well as electricity, for use primarily within a building or complex of buildings;

(g) Replacement, weatherstripping, caulking, or other insulation of windows or doors;

(h) Meter replacement, installation, or modification or installation of automated meter reading systems;

(i) Replacement or installation of energy or water conservation equipment or improvements thereto, or the substitution of non-water-using fixtures, appliances, or equipment; or

(j) Any other measure designed to reduce wastewater or energy, utility, or water consumption, enhance revenue, or reduce operating or capital costs;

(2) Energy financing contract means an agreement between an energy service company and a governmental unit for the implementation of one or more energy conservation measures in an existing facility in order to reduce wastewater or energy, utility, or water consumption, enhance revenue, or reduce operating or capital costs. Energy financing contract includes, but is not limited to, a performance contract, shared-savings contract, guaranteed contract, and lease-purchase contract;

(3) Energy service company means a person or business experienced in the implementation and installation of energy conservation measures; and

(4) Governmental unit means a school district, community college area, village, city, county, or department or agency of the State of Nebraska.

Notwithstanding the procedures for public lettings in sections 73-101 to 73-106 or any other statute of the State of Nebraska relating to the letting of bids by a governmental unit, a governmental unit may enter into an energy financing contract with an energy service company pursuant to sections 66-1062 to 66-1066.

(1) Prior to entering into an energy financing contract, a governmental unit shall obtain a written opinion from a professional engineer licensed in the State of Nebraska whose interests are independent from the financial savings or other revenue enhancement outcomes of the contract. The opinion shall contain a review of recommendations proposed by an energy service company pertaining to energy conservation measures designed to reduce energy or other utility consumption or to achieve operational or capital savings or revenue enhancement for the governmental unit.

(2) At least fourteen days prior to entering into an energy financing contract, a governmental unit shall furnish public notice of its intention to enter into such contract, the general nature of the proposed work being considered under the contract, and the name and telephone number of a person to be contacted by any energy service company interested in submitting a proposal to contract for such work. The governmental unit shall also directly solicit requests for qualifications from at least three energy service companies relating to the proposed contract.

(3) Upon receiving responses to its request for qualifications pursuant to subsection (2) of this section, the governmental unit may select the most qualified energy service company based on the company's experience, technical expertise, and financial arrangements, the overall benefits to the governmental unit, and other factors determined by the governmental unit to be relevant and appropriate. The governmental unit may thereafter negotiate and enter into an energy financing contract pursuant to section 66-1065 with the company selected based on the criteria established by the governmental unit.

(1) Any energy financing contract entered into by a governmental unit shall:

(a) Detail the responsibilities of a Nebraska-licensed professional engineer in the design, installation, and commissioning of the energy conservation measures selected by the governmental unit. Any design shall conform to all statutes of the State of Nebraska pertaining to engineering design and public health, safety, and welfare;

(b) Set forth the calculated energy, utility, wastewater, or water cost savings or revenue enhancements, if applicable, during the contract period attributable to the energy conservation measures to be installed by the energy service company. Operational or capital savings or revenue enhancements may be included in the total savings amount, not guaranteed, but approved by the governmental unit;

(c) Estimate the useful life of each of the selected energy conservation measures;

(d) Provide that, except for obligations on termination of the contract prior to its expiration, payments on the contract are to be made over time, within a period not to exceed thirty years after the date of the installation of the energy conservation measures provided for under the contract;

(e) Provide that the calculated savings for each year of the contract period will meet or exceed all payments to be made during each year of the contract;

(f) Disclose the effective interest rate being charged by the energy service company; and

(g) In the case of a guaranteed savings contract, set forth the method by which savings will be calculated and a method of resolving any dispute in the amount of the savings. The energy service company shall have total responsibility for the savings guarantee for each guaranteed savings contract. Surplus savings realized during any year of the guaranteed savings contract shall be applied to future years' savings results.

(2) An energy service company entering into an energy financing contract shall provide a performance bond to the governmental unit in an amount equal to one hundred percent of the total cost of the implementation, installation, or construction of the energy conservation measures under the applicable energy financing contract to assure the company's faithful performance. The energy service company shall also supply a guarantee bond equal to one hundred percent of the guaranteed energy savings for the entire term of the contract.

An energy financing contract may extend beyond the fiscal year in which it becomes effective and shall allow the governmental unit to cancel the contract for the nonappropriation of funds. An obligation created by an energy financing contract entered into or indebtedness incurred pursuant to this section shall not constitute or give rise to an indebtedness within the meaning of any constitutional, statutory, or board debt limitation.

The Legislature finds it to be in the public interest of the state and its citizens to promote the efficient development and prevent the waste of geothermal resources. Geothermal energy is an indigenous, renewable resource the development of which will benefit local economies. The Legislature further finds and declares that a permit system is necessary to protect Nebraska's ground and surface water resources and existing water users, particularly where the development of geothermal energy requires the utilization of geothermal resources at a location other than the well site.

As used in sections 66-1101 to 66-1106, unless the context otherwise requires:

(1) Geothermal resources shall mean (a) the natural heat of the earth and the energy produced by that heat, including pressure, and (b) the material medium containing that energy;

(2) Geothermal fluids shall mean the naturally present ground water in geothermal occurrences;

(3) Geothermal occurrence shall mean an underground geologic formation at temperatures higher than the normal gradient; and

(4) Material medium shall mean geothermal fluids or other substances injected into a geothermal occurrence by which geothermal energy is transported to the surface.

When the subsurface or mineral estate has been severed from the overlying surface estate, ownership of the right to develop and produce geothermal resources shall derive from the subsurface or mineral estate, except that no such right shall attach to subsurface or mineral estates granted prior to July 17, 1982, unless the document conveying the subsurface or mineral estate specifically granted the right to develop and produce geothermal resources.

(1) When the subsurface or mineral estate in land has been severed from the overlying surface estate, the owner of the subsurface or mineral estate shall have the right to enter upon the overlying surface estate at reasonable times and in a reasonable manner to prospect for, produce, and transport geothermal resources. Fair and equitable compensation shall be paid to the owner of the overlying surface estate for the exercise of such right of entry. The right of entry granted in this section shall not include the right to construct surface facilities for onsite utilization of geothermal energy.

(2) The Board of Educational Lands and Funds shall have the authority to lease state-owned geothermal resources under the procedures contained in Chapter 72, article 3.

Any person who desires to withdraw ground water within the State of Nebraska for geothermal resource development shall, prior to commencing construction of any wells, obtain from the Director of Natural Resources a permit to authorize the withdrawal, transfer, and further use or reinjection of such ground water. The Department of Natural Resources shall adopt and promulgate rules and regulations governing the issuance of such permits, consistent with sections 66-1101 to 66-1106 and with Chapter 46, article 6. Such rules and regulations shall provide for consultation with the Department of Environment and Energy pursuant to the issuance of such permits and shall be compatible with rules and regulations adopted and promulgated by the Department of Environment and Energy under the Environmental Protection Act. Any geothermal fluids produced incident to the development and production of geothermal resources shall be reinjected into the same geologic formation from which they were extracted in substantially the same volume and substantially the same or higher quality as when extracted unless the permit issued in accordance with this section authorizes further uses or processing other than those incident to reinjection.

The development and production of geothermal resources shall be subject to Chapter 46, article 6, and the Environmental Protection Act and any rules and regulations adopted thereunder.

Commencing January 1, 1986, motor fuel dispensers shall be labeled on both faces with the product identity using the most descriptive terms commercially practicable. In addition, all alcohol-blended fuel dispensers shall have a label stating: With or containing ethanol, methanol, or ethanol and methanol or with similar wording if the motor fuel being dispensed contains one percent or more by volume of alcohol. Any person who owns or controls such a motor fuel dispenser and does not attach the notice required by this section shall be guilty of an infraction.

Reformulated gasoline which is sold after January 1, 1992, in ozone nonattainment areas of Nebraska as designated by the federal Environmental Protection Agency shall contain an oxygen content equal to or greater than three and one-tenth percent weight oxygen.

(1) The Legislature hereby adopts by reference the American Society For Testing and Materials publication D4814-89 entitled Standard Specifications for Automotive Spark Ignition Engine Fuels. The Department of Agriculture shall file copies of such publication with the Secretary of State and Clerk of the Legislature.

(2) Commencing on January 1, 1992, all automotive spark ignition engine fuels sold in Nebraska shall meet the specification as found in the American Society For Testing and Materials publication D4814-89 entitled Standard Specifications for Automotive Spark Ignition Engine Fuels. Any person who violates this subsection shall be guilty of a Class I misdemeanor for the first such violation and a Class IV felony for all subsequent violations.

(3) For purposes of this section, automotive spark ignition engine fuels shall mean gasoline and its blends with oxygenates such as alcohol and ethers.

On or after July 13, 2000, a retailer shall not offer for sale in this state any petroleum product that contains more than one percent of methyl tertiary butyl ether (MTBE) by volume. For purposes of this section, retailer has the same definition as in section 66-482.

Sections 66-1330 to 66-1351 shall be known and may be cited as the Ethanol Development Act.

The Legislature finds that Nebraska should continue its existing programs to encourage processing, market development, promotion, distribution, and research on products derived from grain, ethanol, or ethanol components, coproducts, or byproducts to provide for:

(1) Expanded use of Nebraska agricultural products;

(2) Efficient and less-polluting energy sources and reserves which will make Nebraska less energy dependent, reduce atmospheric carbon monoxide levels, and retain Nebraska dollars in the Nebraska economy to achieve a multiplier effect thereby generating additional jobs and tax income to the state rather than the export of Nebraska dollars;

(3) Development of protein which will be more efficiently stored and marketed to foreign nations rather than the present method of simple export of unprocessed grain products;

(4) Alternative local outlets for Nebraska agricultural products which can be particularly utilized in times of depressed grain prices so as to give Nebraskans greater control of their crop marketing procedures rather than have crop marketing procedures too dependent upon federal agencies, major grain exporters, and foreign purchasers. Local outlets may include ethanol plants, agricultural production facilities, or facilities related to the processing, marketing, or distribution of ethanol or products derived from ethanol or ethanol components, coproducts, or byproducts;

(5) Cooperation with private industry to establish ethanol-related production facilities in Nebraska to create demand for agricultural products;

(6) Promotion and market development, in cooperation with private industry, of ethanol or products derived from ethanol or ethanol components, coproducts, or byproducts; and

(7) Sponsorship of research and development of industrial and commercial uses for agricultural ethanol and for byproducts resulting from the manufacturing of agricultural ethanol in order to enhance economic feasibility and marketing potential of such products and processes.

It is hereby declared to be the public policy of the state that, in order to safeguard life, health, property, and public welfare of its citizens, the production, sale, and use of motor fuel and the pollution caused by certain components of motor fuel are matters affecting the public interest and that a statewide emphasis on the production and use of motor fuel containing agricultural ethyl alcohol as a substitute for polluting components is necessary for the reduction of pollution and will further serve as an incentive for the agricultural economy in this state. The Legislature further recognizes that a fuel crisis is pending in the nation and that the development of an additional source of fuel will provide an energy and environmental benefit to the citizens of this state and to the future economic growth of Nebraska.

For purposes of the Ethanol Development Act, unless the context otherwise requires:

(1) Agricultural production facility or ethanol facility means a plant or facility related to the processing, marketing, or distribution of any products derived from grain components, coproducts, or byproducts;

(2) Board means the Nebraska Ethanol Board;

(3) Grain means wheat, corn, and grain sorghum;

(4) Name plate design capacity means the original designed capacity of an agricultural production facility. Capacity may be specified as bushels of grain ground or gallons of ethanol produced per year; and

(5) Related parties means any two or more individuals, firms, partnerships, limited liability companies, companies, agencies, associations, or corporations which are members of the same unitary group or are any persons who are considered to be related persons under the Internal Revenue Code.

(1) The Agricultural Alcohol Fuel Tax Fund is hereby created. The fund shall be administered by the board. The fund shall contain (a) transfers made pursuant to section 66-726, (b) all sums of money received from fees resulting from any conference or event held by the board, (c) gifts, grants, and contributions made by public or private entities, and (d) transfers as authorized by the Legislature. Any money in the fund available for investment shall be invested by the state investment officer pursuant to the Nebraska Capital Expansion Act and the Nebraska State Funds Investment Act.

(2) The fund shall be used for the following purposes:

(a) Establishment, with cooperation of private industry, of procedures and processes necessary to the manufacture and marketing of fuel containing agricultural ethyl alcohol;

(b) Establishment of procedures for entering blended fuel into the marketplace by private enterprise;

(c) Analysis of the marketing process and testing of marketing procedures to assure acceptance in the private marketplace of blended fuel and byproducts resulting from the manufacturing process;

(d) Cooperation with private industry to establish privately owned agricultural ethyl alcohol manufacturing plants in Nebraska to supply demand for blended fuel;

(e) Sponsoring research and development of industrial and commercial uses for agricultural ethyl alcohol and for byproducts resulting from the manufacturing process;

(f) Promotion of state and national air quality improvement programs and influencing federal legislation that requires or encourages the use of fuels oxygenated by the inclusion of agricultural ethyl alcohol or its derivatives;

(g) Promotion of the use of renewable agricultural ethyl alcohol as a partial replacement for imported oil and for the energy and economic security of the nation;

(h) Participation in development and passage of national legislation dealing with research, development, and promotion of United States production of fuels oxygenated by the inclusion of agricultural ethyl alcohol or its derivatives, access to potential markets, tax incentives, imports of foreign-produced fuel, and related concerns that may develop in the future; and

(i) As the board may otherwise direct to fulfill the goals set forth under the Ethanol Development Act, including monitoring contracts for ethanol program commitments and solicitation of federal funds.

(1) The Nebraska Ethanol Board is hereby established. The board shall consist of seven members to be appointed by the Governor with the approval of a majority of the Legislature. The Governor shall make the initial appointments within thirty days after September 1, 1993. Four members shall be actually engaged in farming in this state, one in general farming and one each in the production of corn, wheat, and sorghum. One member shall be actively engaged in business in this state. One member shall represent labor interests in this state. One member shall represent Nebraska petroleum marketers in this state.

(2) Members shall be appointed for terms of four years, except that of the initial appointees the terms of the member representing labor interests and the member engaged in general farming shall expire on August 31, 1994, the terms of the member engaged in sorghum production and the member engaged in wheat production shall expire on August 31, 1995, the term of the member representing petroleum marketers shall expire on August 31, 1996, and the terms of the member engaged in business and the member engaged in corn production shall expire on August 31, 1997. A member shall serve until a successor is appointed and qualified. Not more than four members shall be members of the same political party.

(3) A vacancy on the board shall exist in the event of death, disability, resignation, or removal for cause of a member. Any vacancy on the board arising other than from the expiration of a term shall be filled by appointment for the unexpired portion of the term. An appointment to fill a vacancy shall be made by the Governor with the approval of a majority of the Legislature, and any person so appointed shall have the same qualifications as the person whom he or she succeeds.

(4) The board shall meet at least once annually.

(5) The members shall be reimbursed for expenses as provided in sections 81-1174 to 81-1177. The members shall receive twenty-five dollars for each day while engaged in the performance of board duties.

The board shall retain the services of a full-time administrator to be appointed by the board. The administrator shall hold office at the pleasure of the board.

The board may rent office space and employ such personnel as may be necessary for the performance of its duties. The board may employ the services of experts and consultants and expend funds necessary to acquire title to commodities pursuant to section 66-1340, to promote air quality improvement programs, or to otherwise carry out the board's duties under the Ethanol Development Act.

The board may appropriate funds and become a member of any national ethanol promotion group.

The board is encouraged to solicit and authorized to expend any federally distributed funds from the Energy Settlement Fund, account number 6071, or any other federal funds which may become available to the board for ethanol development. Funds collected pursuant to this section shall be remitted to the State Treasurer for credit to the Agricultural Alcohol Fuel Tax Fund.

The board may accept gifts, donations, money, and services, including in-kind resources such as grain owned by the Commodity Credit Corporation and the United States Department of Agriculture. The board may take title to the Commodity Credit Corporation's inventories and use such commodities to carry out the Ethanol Development Act. The board may accept commodities in connection with section 1024 of the Food Security Act of 1985 or in connection with any other section of state or federal law.

Trade secrets, academic and scientific research work, and other proprietary or commercial information which may be filed with an application for a grant or loan or other financial assistance shall not be considered to be public records as defined in section 84-712.01 if the release of such trade secrets, work, or information would give advantage to business competitors and serve no public purpose. Any person seeking release of the trade secrets, work, or information as a public record shall demonstrate to the satisfaction of the board that the release would not violate this section.

Any repayment of a loan made pursuant to the Ethanol Authority and Development Act as it existed prior to September 1, 1993, shall be remitted to the State Treasurer and shall be credited to the Ethanol Production Incentive Cash Fund. Any return on investment and any money available due to failure to fulfill conditional requirements pursuant to investment agreements entered into prior to April 30, 1992, pursuant to prior law, shall be remitted to the State Treasurer and shall be credited to the fund.

(1) Beginning June 1, 2000, during such period as funds remain in the Ethanol Production Incentive Cash Fund, any ethanol facility shall receive a credit of seven and one-half cents per gallon of ethanol, before denaturing, for new production for a period not to exceed thirty-six consecutive months. For purposes of this subsection, new production means production which results from the expansion of an existing facility's capacity by at least two million gallons first placed into service after June 1, 1999, as certified by the facility's design engineer to the Department of Revenue. For expansion of an existing facility's capacity, new production means production in excess of the average of the highest three months of ethanol production at an ethanol facility during the twenty-four-month period immediately preceding certification of the facility by the design engineer. No credits shall be allowed under this subsection for expansion of an existing facility's capacity until production is in excess of twelve times the three-month average amount determined under this subsection during any twelve-consecutive-month period beginning no sooner than June 1, 2000. New production shall be approved by the Department of Revenue based on such ethanol production records as may be necessary to reasonably determine new production. This credit must be earned on or before December 31, 2003.

(2)(a) Beginning January 1, 2002, any new ethanol facility which is in production at the minimum rate of one hundred thousand gallons annually for the production of ethanol, before denaturing, and which has provided to the Department of Revenue written evidence substantiating that the ethanol facility has received the requisite authority from the Department of Environment and Energy and from the United States Department of Justice, Bureau of Alcohol, Tobacco, Firearms and Explosives, on or before June 30, 2004, shall receive a credit of eighteen cents per gallon of ethanol produced for ninety-six consecutive months beginning with the first calendar month for which it is eligible to receive such credit and ending not later than June 30, 2012, if the facility is defined by subdivision (b)(i) of this subsection, and for forty-eight consecutive months beginning with the first calendar month for which it is eligible to receive such credit and ending not later than June 30, 2008, if the facility is defined by subdivision (b)(ii) of this subsection. The new ethanol facility shall provide an analysis to the Department of Revenue of samples of the product collected according to procedures specified by the department no later than July 30, 2004, and at least annually thereafter. The analysis shall be prepared by an independent laboratory meeting the International Organization for Standardization standard ISO/IEC 17025:1999. Prior to collecting the samples, the new ethanol facility shall notify the department which may observe the sampling procedures utilized by the new ethanol facility to obtain the samples to be submitted for independent analysis. The minimum rate shall be established for a period of at least thirty days. In this regard, the new ethanol facility must produce at least eight thousand two hundred nineteen gallons of ethanol within a thirty-day period. The ethanol must be finished product which is ready for sale to customers.

(b) For purposes of this subsection, new ethanol facility means a facility for the conversion of grain or other raw feedstock into ethanol and other byproducts of ethanol production which (i) is not in production on or before September 1, 2001, or (ii) has not received credits prior to June 1, 1999. A new ethanol facility does not mean an expansion of an existing ethanol plant that does not result in the physical construction of an entire ethanol processing facility or which shares or uses in a significant manner any existing plant's systems or processes and does not include the expansion of production capacity constructed after June 30, 2004, of a plant qualifying for credits under this subsection. This definition applies to contracts entered into after April 16, 2004.

(c) Not more than fifteen million six hundred twenty-five thousand gallons of ethanol produced annually at an ethanol facility shall be eligible for credits under this subsection. Not more than one hundred twenty-five million gallons of ethanol produced at an ethanol facility by the end of the ninety-six-consecutive-month period or forty-eight-consecutive-month period set forth in this subsection shall be eligible for credits under this subsection.

(3) The credits described in this section shall be given only for ethanol produced at a plant in Nebraska at which all fermentation, distillation, and dehydration takes place. No credit shall be given on ethanol produced for or sold for use in the production of beverage alcohol. Not more than ten million gallons of ethanol produced during any twelve-consecutive-month period at an ethanol facility shall be eligible for the credit described in subsection (1) of this section. The credits described in this section shall be in the form of a nonrefundable, transferable motor vehicle fuel tax credit certificate. No transfer of credits will be allowed between the ethanol producer and motor vehicle fuel licensees who are related parties.

(4) Ethanol production eligible for credits under this section shall be measured by a device approved by the Division of Weights and Measures of the Department of Agriculture. Confirmation of approval by the division shall be provided by the ethanol facility at the time the initial claim for credits provided under this section is submitted to the Department of Revenue and annually thereafter. Claims submitted by the ethanol producer shall be based on the total number of gallons of ethanol produced, before denaturing, during the reporting period measured in gross gallons.

(5) The Department of Revenue shall prescribe an application form and procedures for claiming credits under this section. In order for a claim for credits to be accepted, it must be filed by the ethanol producer within three years of the date the ethanol was produced or by September 30, 2012, whichever occurs first.

(6) Every producer of ethanol shall maintain records similar to those required by section 66-487. The ethanol producer must maintain invoices, meter readings, load-out sheets or documents, inventory records, including work-in-progress, finished goods, and denaturant, and other memoranda requested by the Department of Revenue relevant to the production of ethanol. On an annual basis, the ethanol producer shall also be required to furnish the department with copies of the reports filed with the United States Department of Justice, Bureau of Alcohol, Tobacco, Firearms and Explosives. The maintenance of all of this information in a provable computer format or on microfilm is acceptable in lieu of retention of the original documents. The records must be retained for a period of not less than three years after the claim for ethanol credits is filed.

(7) For purposes of ascertaining the correctness of any application for claiming a credit provided in this section, the Tax Commissioner (a) may examine or cause to have examined, by any agent or representative designated by him or her for that purpose, any books, papers, records, or memoranda bearing upon such matters, (b) may by summons require the attendance of the person responsible for rendering the application or other document or any officer or employee of such person or the attendance of any other person having knowledge in the premises, and (c) may take testimony and require proof material for his or her information, with power to administer oaths or affirmations to such person or persons. The time and place of examination pursuant to this subsection shall be such time and place as may be fixed by the Tax Commissioner and as are reasonable under the circumstances. In the case of a summons, the date fixed for appearance before the Tax Commissioner shall not be less than twenty days from the time of service of the summons. No taxpayer shall be subjected to unreasonable or unnecessary examinations or investigations. All records obtained pursuant to this subsection shall be subject to the confidentiality requirements and exceptions thereto as provided in section 77-27,119.

(8) To qualify for credits under this section, an ethanol producer shall provide public notice for bids before entering into any contract for the construction of a new ethanol facility. Preference shall be given to a bidder residing in Nebraska when awarding any contract for construction of a new ethanol facility if comparable bids are submitted. For purposes of this subsection, bidder residing in Nebraska means any person, partnership, foreign or domestic limited liability company, association, or corporation authorized to engage in business in the state with employees permanently located in Nebraska. If an ethanol producer enters into a contract for the construction of a new ethanol facility with a bidder who is not a bidder residing in Nebraska, such producer shall demonstrate to the satisfaction of the Department of Revenue in its application for credits that no comparable bid was submitted by a responsible bidder residing in Nebraska. The department shall deny an application for credits if it is determined that the contract was denied to a responsible bidder residing in Nebraska without cause.

(9) The pertinent provisions of Chapter 66, article 7, relating to the administration and imposition of motor fuel taxes shall apply to the administration and imposition of assessments made by the Department of Revenue relating to excess credits claimed by ethanol producers under the Ethanol Development Act. These provisions include, but are not limited to, issuance of a deficiency following an examination of records, an assessment becoming final after sixty days absent a written protest, presumptions regarding the burden of proof, issuance of deficiency within three years of original filing, issuance of notice by registered or certified mail, issuance of penalties and waiver thereof, issuance of interest and waiver thereof, and issuance of corporate officer or employee or limited liability company manager or member assessments. For purposes of determining interest and penalties, the due date will be considered to be the date on which the credits were used by the licensees to whom the credits were transferred.

(10) If a written protest is filed by the ethanol producer with the department within the sixty-day period in subsection (9) of this section, the protest shall: (a) Identify the ethanol producer; (b) identify the proposed assessment which is being protested; (c) set forth each ground under which a redetermination of the department's position is requested together with facts sufficient to acquaint the department with the exact basis thereof; (d) demand the relief to which the ethanol producer considers itself entitled; and (e) request that an evidentiary hearing be held to determine any issues raised by the protest if the ethanol producer desires such a hearing.

(11) For applications received after April 16, 2004, an ethanol facility receiving benefits under the Ethanol Development Act shall not be eligible for benefits under the Employment and Investment Growth Act, the Invest Nebraska Act, the Nebraska Advantage Act, or the ImagiNE Nebraska Act.

The Tax Commissioner and the producer eligible to receive credits under subsection (2) of section 66-1344 shall enter into a written agreement. The producer shall agree to produce ethanol at the designated facility and any expansion thereof. The Tax Commissioner, on behalf of the State of Nebraska, shall agree to furnish the producer the tax credits as provided by and limited in section 66-1344 in effect on the date of the agreement. The agreement to produce ethanol in return for the credits shall be sufficient consideration, and the agreement shall be binding upon the state. No credit shall be given to any producer of ethanol which fails to produce ethanol in Nebraska in compliance with the agreement. The agreement shall include:

(1) The name of the producer;

(2) The address of the ethanol facility;

(3) The date of the initial eligibility of the ethanol facility to receive such credits;

(4) The name plate design capacity of the ethanol facility as of the date of its initial eligibility to receive such credits; and

(5) The name plate design capacity which the facility is intended to have after the completion of any proposed expansion. If no expansion is contemplated at the time of the initial agreement, the agreement may be amended to include any proposed expansion.

The Tax Commissioner shall not accept any applications for new agreements on or after April 16, 2004.

(1) There is hereby created the Ethanol Production Incentive Cash Fund which shall be used by the board to pay the credits created in section 66-1344 to the extent provided in this section. Any money in the fund available for investment shall be invested by the state investment officer pursuant to the Nebraska Capital Expansion Act and the Nebraska State Funds Investment Act. The State Treasurer shall transfer to the Ethanol Production Incentive Cash Fund such money as shall be (a) appropriated to the Ethanol Production Incentive Cash Fund by the Legislature, (b) given as gifts, bequests, grants, or other contributions to the Ethanol Production Incentive Cash Fund from public or private sources, (c) made available due to failure to fulfill conditional requirements pursuant to investment agreements entered into prior to April 30, 1992, (d) received as return on investment of the Ethanol Authority and Development Cash Fund, and (e) credited to the Ethanol Production Incentive Cash Fund pursuant to sections 66-489 and 66-726.

(2) The Department of Revenue shall, at the end of each calendar month, notify the State Treasurer of the amount of motor fuel tax that was not collected in the preceding calendar month due to the credits provided in section 66-1344. The State Treasurer shall transfer from the Ethanol Production Incentive Cash Fund to the Highway Trust Fund an amount equal to such credits less the following amounts:

(a) For 1993, 1994, and 1995, the amount generated during the calendar quarter by a one-cent tax on motor fuel pursuant to sections 66-489 and 66-6,107;

(b) For 1996, the amount generated during the calendar quarter by a three-quarters-cent tax on motor fuel pursuant to such sections;

(c) For 1997, the amount generated during the calendar quarter by a one-half-cent tax on motor fuel pursuant to such sections; and

(d) For 1998 and each year thereafter, no reduction.

For 1993 through 1997, if the amount generated pursuant to subdivisions (a), (b), and (c) of this subsection and the amount transferred pursuant to subsection (1) of this section are not sufficient to fund the credits provided in section 66-1344, then the credits shall be funded through the Ethanol Production Incentive Cash Fund but shall not be funded through either the Highway Cash Fund or the Highway Trust Fund. For 1998 and each year thereafter, the credits provided in such section shall be funded through the Ethanol Production Incentive Cash Fund but shall not be funded through either the Highway Cash Fund or the Highway Trust Fund.

If, during any month, the amount of money in the Ethanol Production Incentive Cash Fund is not sufficient to reimburse the Highway Trust Fund for credits earned pursuant to section 66-1344, the Department of Revenue shall suspend the transfer of credits by ethanol producers until such time as additional funds are available in the Ethanol Production Incentive Cash Fund for transfer to the Highway Trust Fund. Thereafter, the Department of Revenue shall, at the end of each month, allow transfer of accumulated credits earned by each ethanol producer on a prorated basis derived by dividing the amount in the fund by the aggregate amount of accumulated credits earned by all ethanol producers.

(3) On or before December 1, 2003, and each December 1 thereafter, the Department of Revenue and the Nebraska Ethanol Board shall jointly submit a report electronically to the Legislature which shall project the anticipated revenue and expenditures from the Ethanol Production Incentive Cash Fund through the termination of the ethanol production incentive programs pursuant to section 66-1344. The initial report shall include a projection of the amount of ethanol production for which the Department of Revenue has entered agreements to provide ethanol production credits pursuant to section 66-1344.01 and any additional ethanol production which the Department of Revenue and the Nebraska Ethanol Board reasonably anticipate may qualify for credits pursuant to section 66-1344.

Any funds received by the Department of Revenue which result from an ethanol producer claiming excess credit, and any related interest and penalties thereon, shall be remitted to the State Treasurer for credit to the Ethanol Production Incentive Cash Fund.

Nothing in the Ethanol Development Act shall be construed to extend or affect the terms of any investment agreement entered into by the Ethanol Authority and Development Board prior to April 30, 1992.

Any ethanol facility eligible for tax credits or incentives under the Ethanol Development Act, the Employment and Investment Growth Act, or the Nebraska Advantage Rural Development Act shall whenever possible employ workers who are residents of the State of Nebraska.

The use of seed that is treated, as defined in section 81-2,147.01, in the production of agricultural ethyl alcohol shall be prohibited if such use results in the generation of a byproduct that is deemed unsafe for livestock consumption or land application.

The University of Nebraska shall conduct an assessment of the environmental and human health effects of toxic chemicals. The assessment shall include:

(1) An evaluation of adverse long-term environmental, ecological, and human health effects of the chemicals released during (a) the production of ethanol made from grain or seed treated with pesticide and (b) the storage of byproducts created by the production of ethanol made from grain or seed treated with pesticide; and

(2) An assessment of the effects of polluted ground water, soil, and air relating to any ethanol production facility.

Sections 66-1401 to 66-1428 shall be known and may be cited as the International Fuel Tax Agreement Act.

It is the purpose of the International Fuel Tax Agreement Act to simplify the motor fuel tax licensing, bonding, reporting, and remittance requirements imposed on motor carriers involved in interstate commerce by authorizing the director to participate in cooperative fuel tax agreements with another state or states to permit the administration, collection, and enforcement of each state's motor fuel taxes by the base state.

For purposes of the International Fuel Tax Agreement Act, unless the context otherwise requires:

(1) Agreement means a cooperative fuel tax agreement entered into under section 66-1404 and, specifically, the International Fuel Tax Agreement;

(2) Base state means the state where (a) the motor vehicles are based for vehicle registration purposes, (b) the operational control and operational records of the licensee's motor vehicles are maintained or can be made available, and (c) some mileage is accrued by motor vehicles within the fleet;

(3) Department means the Division of Motor Carrier Services of the Department of Motor Vehicles;

(4) Director means the Director of Motor Vehicles or his or her designee and includes the Division of Motor Carrier Services of the Department of Motor Vehicles;

(5) Licensee means a person licensed pursuant to the methods established in subdivision (2) of section 66-1406;

(6) Motor fuel means any fuel defined as motor vehicle fuel in section 66-482, any fuel defined as diesel fuel in section 66-482, and any fuel defined as compressed fuel in section 66-6,100; and

(7) Person means any individual, firm, partnership, limited liability company, company, agency, association, or corporation or state, county, city, town, village, or other political subdivision.

The director may enter into a cooperative fuel tax agreement with another state or states which provides for the administration, collection, and enforcement by the base state of each state's motor fuel taxes on motor fuel used by interstate motor carriers. The agreement shall not contain any provision which exempts any motor vehicle, owner, or operator from complying with the laws, rules, and regulations pertaining to vehicle licensing, size, weight, or load or the operation of motor vehicles upon the highways of this state. The director may also enter into agreements that provide for local reciprocal exemptions from motor fuel tax apportionment for a motor carrier operating within a limited local delivery area near the borders of the state. The agreements for local reciprocal exemptions may only extend to deliveries not more than fifteen miles into another state and shall require a ninety-day notice to rescind the agreement.

The amount of the tax imposed and collected on behalf of this state under an agreement shall be determined as provided in the Compressed Fuel Tax Act and sections 66-482 to 66-4,149. The Department of Revenue in administering the Compressed Fuel Tax Act and sections 66-482 to 66-4,149 shall provide information and assistance to the director regarding the amount of tax imposed and collected from time to time as may be necessary. The amount of tax due under an agreement may be collected by setoff against any state income tax refund due to the taxpayer pursuant to sections 77-27,210 to 77-27,221.

An agreement may provide for:

(1) Defining the classes of motor vehicles upon which the motor fuel taxes are to be collected under the agreement;

(2) Establishing methods for motor fuel tax licensing, license revocation, and tax collection for motor carriers by the base state on behalf of itself and all other states which are parties to the agreement;

(3) Establishing procedures for the granting of credits or refunds;

(4) Defining conditions and criteria relative to bonding requirements including criteria for exemption from bonding;

(5) Establishing tax reporting periods and tax report due dates not to exceed one calendar month after the close of the reporting period;

(6) Providing for a penalty at a rate of fifty dollars for each reporting period or ten percent of the delinquent tax whichever is greater for failure to file a report, for filing a late report, or for filing an underpayment of taxes due;

(7) Interest on all delinquent taxes at a rate set by the base state;

(8) Establishing procedures for forwarding of motor fuel taxes, penalties, and interest collected on behalf of another state to that state;

(9) Record-keeping requirements for licensees; and

(10) Any additional provisions which will facilitate the administration of the agreement.

Any motor carrier involved in interstate commerce who is required to pay motor fuel taxes shall obtain a license from the director pursuant to an agreement entered into under the International Fuel Tax Agreement Act.

(1) The director may suspend, revoke, cancel, or refuse to issue or renew a license under the International Fuel Tax Agreement Act:

(a) If the applicant's or licensee's registration certificate issued pursuant to the International Registration Plan Act has been suspended, revoked, or canceled or the director refused to issue or renew such certificate;

(b) If the applicant or licensee is in violation of sections 75-392 to 75-3,100;

(c) If the applicant's or licensee's security has been canceled;

(d) If the applicant or licensee failed to provide additional security as required;

(e) If the applicant or licensee failed to file any report or return required by the motor fuel laws, filed an incomplete report or return required by the motor fuel laws, did not file any report or return required by the motor fuel laws electronically, or did not file a report or return required by the motor fuel laws on time;

(f) If the applicant or licensee failed to pay taxes required by the motor fuel laws due within the time provided;

(g) If the applicant or licensee filed any false report, return, statement, or affidavit, required by the motor fuel laws, knowing it to be false;

(h) If the applicant or licensee would no longer be eligible to obtain a license; or

(i) If the applicant or licensee committed any other violation of the International Fuel Tax Agreement Act or the rules and regulations adopted and promulgated under the act.

(2) Prior to taking any action pursuant to subsection (1) of this section, the director shall notify and advise the applicant or licensee of the proposed action and the reasons for such action in writing, by regular United States mail, to his or her last-known business address as shown on the application or license. The notice shall also include an advisement of the procedures in subsection (3) of this section.

(3) The applicant or licensee may, within thirty days after the mailing of the notice, petition the director in writing for a hearing to contest the proposed action. The hearing shall be commenced in accordance with the rules and regulations adopted and promulgated by the Department of Motor Vehicles. If a petition is filed, the director shall, within twenty days after receipt of the petition, set a hearing date at which the applicant or licensee may show cause why the proposed action should not be taken. The director shall give the applicant or licensee reasonable notice of the time and place of the hearing. If the director's decision is adverse to the applicant or licensee, the applicant or licensee may appeal the decision in accordance with the Administrative Procedure Act.

(4) Except as provided in subsection (2) of section 60-3,205 and subsection (8) of this section, the filing of the petition shall stay any action by the director until a hearing is held and a final decision and order is issued.

(5) Except as provided in subsection (2) of section 60-3,205 and subsection (8) of this section, if no petition is filed at the expiration of thirty days after the date on which the notification was mailed, the director may take the proposed action described in the notice.

(6) Except as provided in subsection (2) of section 60-3,205 and subsection (8) of this section, if, in the judgment of the director, the applicant or licensee has complied with or is no longer in violation of the provisions for which the director took action under this section, the director may reinstate the license without delay. An applicant for reinstatement, issuance, or renewal of a license within three years after the date of suspension, revocation, cancellation, or refusal to issue or renew shall submit a fee of one hundred dollars to the director. The director shall remit the fee to the State Treasurer for credit to the Highway Cash Fund.

(7) Suspension of, revocation of, cancellation of, or refusal to issue or renew a license by the director shall not relieve any person from making or filing the reports or returns required by the motor fuel laws in the manner or within the time required.

(8) Any person who receives notice from the director of action taken pursuant to subsection (1) of this section shall, within three business days, return such registration certificate and license plates issued pursuant to section 60-3,198 to the department. If any person fails to return the registration certificate and license plates to the department, the department shall notify the Nebraska State Patrol that any such person is in violation of this section.

Any licensee paying more tax than is required during the course of a reporting period shall be permitted a credit against future tax liability for the excess tax paid. Upon request, this credit may be refunded to the licensee by the director in accordance with the agreement.

An agreement may require the director to perform audits of persons required to be licensed who are based in this state to determine if the motor fuel taxes to be collected under the agreement have been properly reported and paid to each state participating in the agreement. The agreement may authorize other states to perform audits of persons required to be licensed who are based in such other state on behalf of the State of Nebraska and forward the findings to the director. The director may issue a notice of deficiency determination based on the findings from the other state.

The agreement shall not preclude the director from auditing the records of any person who has used motor fuels in this state. Any person required to be licensed shall make his or her records available on request of the director.

If the person is based in this state, the records shall be made available at the location designated by the director or such person may request the director to audit such records at the person's place of business. If the place of business is located outside this state, the director may require the person to reimburse the director for authorized per diem and travel expenses.

The director may forward to the representative of another state designated in the agreement any information in the director's possession relative to the manufacture, receipt, sale, use, transportation, or shipment of motor fuels by any person required to be licensed. The director may disclose information to the representative of the other state which relates to the location of officers, motor vehicles, and other real and personal property of persons required to be licensed under the agreement who use motor fuels. Any information covered by an agreement with the Internal Revenue Service may only be released in accordance with such agreement.

The director shall adopt and promulgate rules and regulations necessary to implement any agreement entered into under the International Fuel Tax Agreement Act.

(1) The legal remedies for any person served with an order or assessment under the International Fuel Tax Agreement Act shall be as prescribed in such act. Appeals from a final order of the director shall be taken as prescribed in sections 84-917 to 84-919.

(2) The director may adopt and promulgate rules and regulations for enforcement, collection, and appeals pursuant to the International Fuel Tax Agreement Act. Any person filing a report or return for tax due shall follow the filing periods or due dates established by the agreement under section 66-1406.

The director may use the provisions of the Uniform State Tax Lien Registration and Enforcement Act for purposes of enforcing the International Fuel Tax Agreement Act.

If the director enters into any agreement authorized by the International Fuel Tax Agreement Act and the provisions set forth in the agreement are in conflict with any rules or regulations adopted and promulgated by the director, the agreement shall control to the extent of any conflict.

The Division of Motor Carrier Services of the Department of Motor Vehicles may contract with another state agency or an association organized under the laws of this state, not for profit, to administer for the division the parts of the International Fuel Tax Agreement Act as designated by the director.

(1) Any fuel tax collected pursuant to the agreement shall be remitted to the State Treasurer for credit to the Motor Carrier Services Division Distributive Fund to carry out the International Fuel Tax Agreement Act.

(2) The Motor Carrier Services Division Distributive Fund is created. The fund shall be set apart and maintained by the State Treasurer to carry out the International Fuel Tax Agreement Act and the International Registration Plan Act. Any money in the Motor Carrier Services Division Distributive Fund available for investment shall be invested by the state investment officer pursuant to the Nebraska Capital Expansion Act and the Nebraska State Funds Investment Act. Any interest received on money in the Motor Carrier Services Division Distributive Fund shall be credited to the Highway Trust Fund.

(1) An additional fee may be collected by the issuing agency or association from a licensee for each annual decal issued pursuant to the agreement. The fee shall be in an amount determined by the director to be sufficient to recover reasonable administrative costs of the agreement but not more than ten dollars per annual decal. The fee shall be remitted to the State Treasurer and credited to the Motor Carrier Division Cash Fund, except that the director may by contract with an association provide for the association to retain a portion of the fee as payment for services rendered under the contract.

(2) The Motor Carrier Division Cash Fund shall be used to pay administrative costs of the International Fuel Tax Agreement Act. If any staff used for enforcing the agreement provided for in the act is used for any other state tax or program, the costs attributed to such other tax or program shall be borne by either the General Fund or the fund to which the money resulting from such other tax or program is credited, however it is appropriated by the Legislature. Any money in the Interstate Motor Carriers Base State Cash Fund on July 1, 1996, shall be transferred to the Motor Carrier Division Cash Fund on such date.

The purpose of sections 66-1416 to 66-1419 is to provide an additional method of collecting motor fuels taxes from interstate motor vehicle operators commensurate with their operations in Nebraska and to permit the department to suspend the collection as to transportation entering Nebraska from any other state when it appears that Nebraska tax revenue and interstate highway transportation moving out of Nebraska will not be unduly prejudiced thereby.

For purposes of such sections, (1) fuel used or consumed in operations includes all fuel placed in the supply tanks and consumed in the engine of a qualified motor vehicle and (2) qualified motor vehicle means a motor vehicle used, designed, or maintained for transportation of persons or property which (a) has two axles and a gross vehicle weight or registered gross vehicle weight exceeding twenty-six thousand pounds, (b) has three or more axles regardless of weight, or (c) is used in combination when the weight of such combination exceeds twenty-six thousand pounds gross vehicle or registered gross vehicle weight. Qualified motor vehicle does not include a recreational vehicle.

No person shall bring into this state in the fuel supply tanks of a qualified motor vehicle or in any other container, regardless of whether or not the supply tanks are connected to the motor of the vehicle, any motor fuels to be used in the operation of the vehicle in this state unless he or she has purchased a trip permit pursuant to section 66-1418 or paid or made arrangements in advance for payment of Nebraska motor fuels taxes on the gallonage consumed in operating the vehicle in this state.

Any person who brings into this state in the fuel supply tanks of a qualified motor vehicle motor fuels in violation of the International Fuel Tax Agreement Act shall be subject to an administrative penalty of one hundred dollars for each violation to be assessed and collected by the department or another state agency which may be contracted with to act as the department's agent for such purpose. All such penalties collected shall be remitted to the State Treasurer for credit to the Highway Cash Fund.

A trip permit shall be issued before any person required to obtain a trip permit enters this state. The trip permit shall be issued by the director through Internet sales from the department's website. The trip permit shall be issued for a fee of twenty dollars and shall be valid for a period of seventy-two hours. The fee collected by the director shall be remitted to the State Treasurer for credit to the Highway Cash Fund.

Every person operating under sections 66-1416 to 66-1419 shall make and keep for a period of three years, or five years if required reports, returns, or statements are not filed, such records as may reasonably be required by the department for the administration of such sections.

If, in the normal conduct of the business, the required records are maintained and kept at an office outside the State of Nebraska, it shall be a sufficient compliance with this section if the records are made available for audit and examination by the department within this state, but such audit and examination shall be without expense to the State of Nebraska.

(1) The department may require information as it deems necessary on any report, return, or other statement under the agreement.

(2) The department may require any of the reports, returns, or other filings due from any licensees to be filed electronically.

(3) The department shall prescribe the formats and procedures for electronic filing. The department shall adopt formats and procedures that are reasonably consistent with the formats and procedures of other states requiring electronic reporting of motor fuel information.

(4) Any person who does not file electronically when required or who fails to use the prescribed formats and procedures shall be considered to have not filed the return, report, or other filing.

(1)(a) No penalty shall be imposed upon any person who voluntarily reports an underpayment of tax by filing an amended return if the original return is filed on time.

(b) Except as provided in subsection (3) of this section, interest shall not be waived on any additional tax due as reported on any amended return, and such interest shall be computed from the date such tax was due.

(2) The department may in its discretion waive all or any portion of the penalties incurred upon sufficient showing by the taxpayer that the failure to file or pay is not due to negligence, intentional disregard of the law, rules, or regulations, intentional evasion of the tax, or fraud committed with intent to evade the tax or that such penalties should otherwise be waived.

(3) The department may in its discretion waive any and all interest incurred upon sufficient showing by the taxpayer that such interest should be waived.

(1) Any license or permit issued by the department under the motor fuel laws may be suspended for the following reasons:

(a) Cancellation of security;

(b) Failure to provide additional security as required;

(c) Failure to file any report or return, filing an incomplete report or return, or not filing electronically, within the time provided;

(d) Failure to pay taxes due within the time provided;

(e) Filing of any false report, return, statement, or affidavit, knowing it to be false;

(f) Using or placing dyed diesel fuel in a motor vehicle except as authorized under section 66-495.01;

(g) A licensee no longer being eligible to obtain a license or permit; or

(h) Any other violation by a licensee of the agreement or the rules and regulations.

(2) The department shall mail notice of suspension of any license or permit.

(3) The licensee or permitholder may, within thirty days after the mailing of the notice of such suspension, petition the department in writing for a hearing and reconsideration of such suspension. If a petition is filed, the department shall, within twenty days of receipt of the petition, set a hearing date at which the licensee or permitholder may show cause why his or her suspended license or permit should not be canceled. The department shall give the licensee or permitholder reasonable notice of the time and place of such hearing. Within a reasonable time after the conclusion of the hearing, the department shall issue an order either reinstating or revoking such license or permit.

(4) If a petition is not filed within the thirty-day period, the suspended license or permit shall be revoked by the department at the expiration of the period.

(5) Any reissuance of a permit or license to the same person within three years from the date of revocation shall require a reinstatement fee of one hundred dollars to be submitted to the department. The department shall remit the fee to the State Treasurer for credit to the Highway Cash Fund.

(6) Suspension or revocation of a license or permit issued by the department shall not relieve any person from making or filing the reports or returns required by the motor fuel laws in the manner or within the time required.

(7) The licensee or permitholder may request in writing that the department consider reinstating a revoked license. The department shall make a final determination to reinstate or not reinstate and communicate its decision in writing to the licensee or permitholder within thirty days of receipt of the request.

All notices by the department required by the motor fuel laws shall be mailed or electronically transmitted to the address of the licensee or permitholder as shown on the records of the department.

(1) As soon as practical after a return is filed, the department shall examine it to determine the correct amount of tax. If the department finds that the amount of tax shown on the return is less than the correct amount, it shall notify the taxpayer of the amount of the deficiency determined.

(2) If any person fails to file a return or has improperly purchased motor fuel without the payment of tax, the department may estimate the person's liability from any available information and notify the person of the amount of the deficiency determined.

(3) The amount of the deficiency determined shall constitute a final assessment together with interest and penalties thirty days after the date on which notice was mailed to the taxpayer at his or her last-known address unless a written protest is filed with the department within such thirty-day period.

(4) The final assessment provisions of this section shall constitute a final decision of the agency for purposes of the Administrative Procedure Act.

(5) An assessment made by the department shall be presumed to be correct. In any case when the validity of the assessment is questioned, the burden shall be on the person who challenges the assessment to establish by a preponderance of the evidence that the assessment is erroneous or excessive.

(6)(a) Except in the case of a fraudulent return or of neglect or refusal to make a return, the notice of a proposed deficiency determination shall be mailed within three years after the last day of the month following the end of the period for which the amount proposed is to be determined or within three years after the return is filed, whichever period expires later.

(b) The taxpayer and the department may agree, prior to the expiration of the period in subdivision (a) of this subsection, to extend the period during which the notice of a deficiency determination can be mailed. The extension of the period for the mailing of a deficiency determination shall also extend the period during which a refund can be claimed.

(1) Any corporate officer or employee with the authority to decide whether the corporation will pay the taxes imposed upon a corporation by the motor fuel laws, to file any reports or returns required by the motor fuel laws, or to perform any other act required of a corporation under the motor fuel laws shall be personally liable for the payment of the taxes, interest, penalties, or other administrative penalties in the event of willful failure on his or her part to have the corporation perform such act. Such taxes shall be collected in the same manner as provided under the Uniform State Tax Lien Registration and Enforcement Act.

(2) Within thirty days after the day on which the notice and demand are made for the payment of such taxes, any corporate officer or employee seeking to challenge the department's determination as to his or her personal liability for the corporation's unpaid taxes may petition for a redetermination. The petition may include a request for the redetermination of the personal liability of the corporate officer or employee, the redetermination of the amount of the corporation's unpaid taxes, or both. If a petition for redetermination is not filed within the thirty-day period, the determination becomes final at the expiration of the period.

(3) If the requirements prescribed in subsection (2) of this section are satisfied, the department shall abate collection proceedings and shall grant the corporate officer or employee an oral hearing and give him or her ten days' notice of the time and place of such hearing. The department may continue the hearing from time to time as necessary.

(4) Any notice required under this section shall be served personally or by mail in the manner provided in section 66-1406.02.

(5) If the department determines that further delay in the collection of such taxes from the corporate officer or employee will jeopardize future collection proceedings, nothing in this section shall prevent the immediate collection of such taxes.

(6) For purposes of this section:

(a) Corporation means any corporation and any other entity that is taxed as a corporation under the Internal Revenue Code;

(b) Taxes means all taxes and additions to taxes including interest and penalties imposed under the agreement; and

(c) Willful failure means that failure which was the result of an intentional, conscious, and voluntary action.

All deficiencies determined by the department and any tax paid after the time provided shall accrue interest at the rate specified in subdivision (7) of section 66-1406, as such rate may from time to time be adjusted, on such deficiency or late payment from the date such tax was due to the date of payment.

The department may examine the records of any person holding a license or permit, required to hold a license or permit, or purchasing motor fuel without the payment of tax at any time during regular business hours and make such other investigations as it deems necessary for the proper and efficient administration and enforcement of the agreement.

All taxes, interest, and penalties collected pursuant to the International Fuel Tax Agreement Act shall be remitted to the State Treasurer for credit to the Highway Trust Fund, except as otherwise provided under the act or an agreement entered into pursuant to the act.

Sections 66-1501 to 66-1531 shall be known and may be cited as the Petroleum Release Remedial Action Act.

(1) The Legislature restates the declaration of legislative purpose as set forth in section 81-1501 that the public policy of this state is hereby declared to be:

(a) To conserve the water in this state and to protect and improve the quality of water for human consumption, wildlife, fish and other aquatic life, industry, recreation, and other productive, beneficial uses;

(b) To achieve and maintain a reasonable degree of purity of the natural atmosphere of this state that human beings and all other animals and plants which are indigenous to this state will flourish in approximately the same balance as they have in recent history and to adopt and promulgate laws, rules, and regulations and to uniformly enforce the same in such a manner as to give meaningful recognition to the protection of each element of the environment, air, water, and land; and

(c) To cooperate with other states and the federal government to accomplish the objectives set forth in the Environmental Protection Act.

(2) The Legislature finds that the number of leaking petroleum storage tanks throughout the state is increasing and that there exists a serious threat to the health and safety of citizens because petroleum contained in leaking storage tanks is a potential land and ground water contaminant and major fire and explosive hazard. Furthermore, owners of petroleum tanks may not have the ability to assess and clean up any releases from those petroleum tanks.

(3) The Legislature finds and declares that it is in the public interest that a distribution network for petroleum be available to the public in the State of Nebraska. It is essential in this state to encourage owners of petroleum tanks across the state to remain in business to maintain the viability of the distribution network. At the present time, meeting financial responsibility requirements imposed by the federal government has placed a burden on the owners of petroleum tanks that jeopardizes their ability to store and distribute petroleum and to remain a part of the distribution network.

For purposes of the Petroleum Release Remedial Action Act, the definitions found in sections 66-1504 to 66-1515.01 shall be used.

Department shall mean the Department of Environment and Energy.

Fund shall mean the Petroleum Release Remedial Action Cash Fund created in section 66-1519.

Importer shall mean any person who imports or causes to be imported petroleum from any other state or territory of the United States or from a foreign country for such person's own use in or for sale in this state, whether or not in the original package, receptacle, or container. Importer shall not include a person who imports petroleum in a tank directly connected to the engine of a motor vehicle, train, watercraft, or airplane for purposes of providing fuel to the engine to which the tank is connected.

Operator shall mean a person in control of or having responsibility for the daily operation of a tank. Operator shall not include a person described in subsection (2) of section 66-1509.

(1) Owner shall mean:

(a) In the case of a tank in use on or after November 8, 1984, or brought into use after such date, any person who owns a tank used for the storage, use, or dispensing of petroleum; and

(b) In the case of a tank in use before November 8, 1984, but no longer in use on such date, any person who owned such tank immediately before the discontinuation of its use.

(2) Owner shall not include a person who, without participating in the management of a tank and otherwise not engaged in petroleum production, refining, and marketing:

(a) Holds indicia of ownership primarily to protect his or her security interest in a tank or a lienhold interest in the property on or within which a tank is or was located; or

(b) Acquires ownership of a tank or the property on or within which a tank is or was located:

(i) Pursuant to a foreclosure of a security interest in the tank or of a lienhold interest in the property; or

(ii) If the tank or the property was security for an extension of credit previously contracted, pursuant to a sale under judgment or decree, pursuant to a conveyance under a power of sale contained within a trust deed or from a trustee, or pursuant to an assignment or deed in lieu of foreclosure.

(3) Ownership of a tank or the property on or within which a tank is or was located shall not be acquired by a voidable transfer, as provided in the Uniform Voidable Transactions Act.

Petroleum shall mean:

(1) For purposes of the fee provisions of section 66-1521:

(a) Motor vehicle fuel as defined in section 66-482, except natural gasoline used as a denaturant by an ethanol facility as defined in section 66-1333; and

(b) Diesel fuel as defined in section 66-482, including kerosene which has been blended for use as a motor fuel; and

(2) For purposes of all provisions of the Petroleum Release Remedial Action Act other than the fee provisions of section 66-1521:

(a) The fuels defined in subdivision (1) of this section; and

(b) A fraction of crude oil that is liquid at a temperature of sixty degrees Fahrenheit and a pressure of fourteen and seven-tenths pounds per square inch absolute, except any such fraction which is regulated as a hazardous substance under section 101(14) of the federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. 9601(14), as such act existed on January 1, 2005.

Refiner shall mean any person who refines, prepares, blends, distills, manufactures, or compounds petroleum in Nebraska for such person's own use in this state or for sale or delivery in this state.

Release shall mean any spilling, leaking, emitting, discharging, escaping, leaching, or disposing of petroleum from a tank or any overfilling of a tank into ground water, surface water, surface soils, or subsurface soils whether occurring before, on, or after May 27, 1989.

Remedial action shall mean any immediate or long-term response to a release or suspected release in accordance with rules and regulations adopted and promulgated by the department or the State Fire Marshal, including tank testing only in conjunction with a release or suspected release, site investigation, site assessment, cleanup, restoration, mitigation, and any other action ordered by the department or the State Fire Marshal which is reasonable and necessary. Remedial action shall not include:

(1) Tank restoration, upgrading, replacement, or rehabilitation;

(2) Actions which do not minimize, eliminate, or clean up a release or suspected release to protect the public safety, health, and welfare or the environment; or

(3) Aesthetic improvements.

Costs of remedial action shall not include costs for the actions specified in subdivisions (1) through (3) of this section, loss of income, attorney's fees, or reimbursement for the responsible person's own time spent in planning and administering a corrective action plan.

Responsible person shall mean a person who is an owner or operator of a tank. If an owner or operator is unwilling or unable or fails to comply with required remedial action or to pay a third-party claim, responsible person shall also mean any of the following who voluntarily propose to implement required remedial action or to pay the claim:

(1) A person in the chain of title of a tank or in the property on or within which a tank is or was located;

(2) A person who holds a security interest in a tank or a lienhold interest in the property on or within which a tank is or was located; or

(3) A person who has acquired ownership of a tank or the property on or within which a tank is or was located:

(a) Pursuant to a foreclosure of a security interest in the tank or a lienhold interest in the property; or

(b) If the tank or the property was security for an extension of credit previously contracted, pursuant to a sale under judgment or decree, pursuant to a conveyance under a power of sale contained within a trust deed or from a trustee, or pursuant to an assignment or deed in lieu of foreclosure.

Such voluntary action shall not be construed to render such party responsible or liable for remedial action or payment of the claim.

Supplier shall mean any person who owns petroleum products imported by barge, barge line, or pipeline and stored at a barge, barge line, or pipeline terminal in this state.

Tank shall mean any one or a combination of stationary aboveground or underground containers and enclosures, including structures and appurtenances connected to them, that is or has been used to contain or dispense petroleum, but tank shall not include any pipeline facilities, including gathering lines, regulated under the Natural Gas Pipeline Safety Act of 1968, 49 U.S.C. chapter 24, or the Hazardous Liquid Pipeline Safety Act of 1979, 49 U.S.C. chapter 29, as in effect on January 1, 1988, or any lease production tank used in the production of crude oils.

Third-party claim shall mean a final judgment against a responsible person obtained by a third party for compensation for bodily injury and property damage caused by a release first reported after January 1, 1990.

Except as provided in section 81-15,124.05, no responsible person may avoid responsibility under state law for a release or third-party claim by means of a conveyance of any right, title, or interest in real property or by any indemnification, hold-harmless, or similar agreement. This section shall not be construed to:

(1) Prohibit a responsible person from entering into an agreement by which the person is insured or is a member of a risk retention group and is thereby indemnified for part or all of the liability;

(2) Prohibit the enforcement of an insurance, hold-harmless, or indemnification agreement; or

(3) Bar a cause of action brought by a responsible person or by an insurer or guarantor, whether by right of subrogation or otherwise.

Reimbursement for remedial actions and third-party claims shall be governed by the Petroleum Release Remedial Action Act.

Nothing in the act shall be construed to limit the powers of the department or preclude the pursuit of any other administrative, civil, injunctive, or criminal remedies by the department or any other person. Administrative remedies need not be exhausted in order to proceed under the act. The remedies provided by the act shall be in addition to those provided under existing statutory or common law.

For purposes of section 25-328, the state shall have an interest in any litigation which might result in a third-party claim.

Nothing in the act shall be construed to limit a person's duty to notify the department and the State Fire Marshal or to take other action related to a release as required pursuant to the Environmental Protection Act or the Petroleum Products and Hazardous Substances Storage and Handling Act.

(1) The Environmental Quality Council shall adopt and promulgate rules and regulations governing reimbursements authorized under the Petroleum Release Remedial Action Act. Such rules and regulations shall include:

(a) Procedures regarding the form and procedure for application for payment or reimbursement from the fund, including the requirement for timely filing of applications;

(b) Procedures for the requirement of submitting cost estimates for phases or stages of remedial actions, procurement requirements to be followed by responsible persons, and requirements for reuse of fixtures and tangible personal property by responsible persons during a remedial action;

(c) Procedures for investigation of claims for payment or reimbursement;

(d) Procedures for determining the amount and type of costs that are eligible for payment or reimbursement from the fund;

(e) Procedures for auditing persons who have received payments from the fund;

(f) Procedures for reducing reimbursements made for a remedial action for failure by the responsible person to comply with applicable statutory or regulatory requirements. Reimbursement may be reduced as much as one hundred percent; and

(g) Other procedures necessary to carry out the act.

(2) The Director of Environment and Energy shall (a) estimate the cost to complete remedial action at each petroleum contaminated site where the responsible party has been ordered by the department to begin remedial action, and, based on such estimates, determine the total cost that would be incurred in completing all remedial actions ordered; (b) determine the total estimated cost of all approved remedial actions; (c) determine the total dollar amount of all pending claims for payment or reimbursement; (d) determine the total of all funds available for reimbursement of pending claims; and (e) include the determinations made pursuant to this subsection in the department's annual report to the Legislature.

(3) The Department of Environment and Energy shall make available to the public a current schedule of reasonable rates for equipment, services, material, and personnel commonly used for remedial action. The department shall consider the schedule of reasonable rates in reviewing all costs for the remedial action which are submitted in a plan. The rates shall be used to determine the amount of reimbursement for the eligible and reasonable costs of the remedial action, except that (a) the reimbursement for the costs of the remedial action shall not exceed the actual eligible and reasonable costs incurred by the responsible person or his or her designated representative and (b) reimbursement may be made for costs which exceed or are not included on the schedule of reasonable rates if the application for such reimbursement is accompanied by sufficient evidence for the department to determine and the department does determine that such costs are reasonable.

(1) There is hereby created the Petroleum Release Remedial Action Cash Fund to be administered by the department. Revenue from the following sources shall be remitted to the State Treasurer for credit to the fund:

(a) The fees imposed by sections 66-1520 and 66-1521;

(b) Money paid under an agreement, stipulation, cost-recovery award under section 66-1529.02, or settlement; and

(c) Money received by the department in the form of gifts, grants, reimbursements, property liquidations, or appropriations from any source intended to be used for the purposes of the fund.

(2) Money in the fund may be spent for: (a) Reimbursement for the costs of remedial action by a responsible person or his or her designated representative and costs of remedial action undertaken by the department in response to a release first reported after July 17, 1983, and on or before June 30, 2028, including reimbursement for damages caused by the department or a person acting at the department's direction while investigating or inspecting or during remedial action on property other than property on which a release or suspected release has occurred; (b) payment of any amount due from a third-party claim; (c) fee collection expenses incurred by the State Fire Marshal; (d) direct expenses incurred by the department in carrying out the Petroleum Release Remedial Action Act; (e) other costs related to fixtures and tangible personal property as provided in section 66-1529.01; (f) interest payments as allowed by section 66-1524; (g) claims approved by the State Claims Board authorized under section 66-1531; (h) the direct and indirect costs incurred by the department in responding to spills and other environmental emergencies related to petroleum or petroleum products; and (i) up to one million five hundred thousand dollars each fiscal year of the department's cost-share obligations and operation and maintenance obligations under the federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. 9601 et seq.

(3) Transfers may be made from the Petroleum Release Remedial Action Cash Fund to the Superfund Cost Share Cash Fund at the direction of the Legislature.

(4) Any money in the Petroleum Release Remedial Action Cash Fund available for investment shall be invested by the state investment officer pursuant to the Nebraska Capital Expansion Act and the Nebraska State Funds Investment Act. Investment earnings on and after April 16, 2024, shall be credited to the fund.

(1) Prior to December 31, 1996, the department may authorize the State Treasurer to transfer funds from the Petroleum Release Remedial Action Cash Fund to the Wastewater Treatment Facilities Construction Loan Fund in such amount as determined by the department to be necessary to satisfy the state match requirement necessary to obtain federal capitalization grants under the federal Clean Water Act, as defined in section 81-15,149. The department may enter into contracts for repayment of such amounts, plus any additional amounts, including interest, determined by the department to be reasonable and necessary with respect to such transfers. Such contracts may allow repayments to be completed on or after December 31, 1996.

(2) Prior to December 31, 1996, the department may authorize the State Treasurer to deposit amounts received from the Wastewater Treatment Facilities Construction Loan Fund, including amounts due from federal capitalization grants for the benefit of the Wastewater Treatment Facilities Construction Loan Fund, in the Petroleum Release Remedial Action Cash Fund. The department may authorize the State Treasurer to repay such amounts, plus any additional amounts, including interest, determined by the department to be reasonable and necessary with respect to such deposits, and the department may enter into contracts with respect thereto for the benefit of the Wastewater Treatment Facilities Construction Loan Fund. The terms of any such contracts or authorizations may end on or after December 31, 1996.

(3) The department may agree, in the contracts authorized under subsection (2) of this section, that specific amounts or sources of money in the Petroleum Release Remedial Action Cash Fund shall be obligated or pledged to the repayment of deposits from the Wastewater Treatment Facilities Construction Loan Fund, and that some or all of such specified amounts shall not be available to provide reimbursement pursuant to section 66-1523 or payments pursuant to section 66-1529.01 or 66-1529.02. Such specified amounts shall not exceed the amounts the department deems reasonably necessary to provide adequate security for the repayment of deposits. Any such pledge shall be valid and binding from the time the pledge is made, the amounts or sources of money so pledged shall immediately be subject to the lien of such pledge without any physical delivery thereof or further act, the lien shall be valid and binding as against all parties having claims of any kind in tort, contract, or otherwise, regardless of whether the parties have notice thereof, and no such pledge agreement need be recorded.

(1) On each January 1, all owners of operating tanks registered in accordance with section 81-15,121 shall pay a petroleum release remedial action fee of ninety dollars to the State Fire Marshal for each registered tank.

(2) The State Fire Marshal shall remit the fees received pursuant to this section to the State Treasurer for credit to the fund.

(1) A petroleum release remedial action fee is hereby imposed upon the producer, refiner, importer, distributor, wholesaler, or supplier who engages in the sale, distribution, delivery, and use of petroleum within this state, except that the fee shall not be imposed on petroleum that is exported. The fee shall also be imposed on diesel fuel which is indelibly dyed. The amount of the fee shall be nine-tenths of one cent per gallon on motor vehicle fuel as defined in section 66-482 and three-tenths of one cent per gallon on diesel fuel as defined in section 66-482. The amount of the fee shall be used first for payment of claims approved by the State Claims Board pursuant to section 66-1531; second, up to three million dollars of the fee per year shall be used for reimbursement of owners and operators under the Petroleum Release Remedial Action Act for investigations of releases ordered pursuant to section 81-15,124; and third, the remainder of the fee shall be used for any other purpose authorized by section 66-1519. The fee shall be paid by all producers, refiners, importers, distributors, wholesalers, and suppliers subject to the fee by filing a monthly return on or before the twentieth day of the calendar month following the monthly period to which it relates. The pertinent provisions, specifically including penalty provisions, of the motor fuel laws as defined in section 66-712 shall apply to the administration and collection of the fee except for the treatment given refunds. There shall be a refund allowed on any fee paid on petroleum which was taxed and then exported, destroyed, or purchased for use by the United States Government or its agencies. The department may also adjust for all errors in the payment of the fee. In each calendar year, no claim for refund related to the fee can be for an amount less than ten dollars.

(2) No producer, refiner, importer, distributor, wholesaler, or supplier shall engage in the sale, distribution, delivery, or use of petroleum in this state without having first obtained a petroleum release remedial action license. Application for a license shall be made to the Department of Revenue upon a form prepared and furnished by the Department of Revenue. If the applicant is an individual, the application shall include the applicant's social security number. Failure to obtain a license prior to engaging in the sale, distribution, delivery, or use of petroleum shall be a Class IV misdemeanor. The Department of Revenue may suspend or cancel the license of any producer, refiner, importer, distributor, wholesaler, or supplier who fails to pay the fee imposed by subsection (1) of this section in the same manner as licenses are suspended or canceled pursuant to section 66-720.

(3) The Department of Revenue may adopt and promulgate rules and regulations necessary to carry out this section.

(4) The Department of Revenue shall deduct and withhold from the petroleum release remedial action fee collected pursuant to this section an amount sufficient to reimburse the direct costs of collecting and administering the petroleum release remedial action fee. Such costs shall not exceed one hundred fifty thousand dollars for each fiscal year. The one hundred fifty thousand dollars shall be prorated, based on the number of months the fee is collected, whenever the fee is collected for only a portion of a year. The amount deducted and withheld for costs shall be deposited in the Petroleum Release Remedial Action Collection Fund which is hereby created. The Petroleum Release Remedial Action Collection Fund shall be appropriated to the Department of Revenue, except that transfers may be made from the fund to the General Fund at the direction of the Legislature. Any money in the Petroleum Release Remedial Action Collection Fund available for investment shall be invested by the state investment officer pursuant to the Nebraska Capital Expansion Act and the Nebraska State Funds Investment Act.

(5) The Department of Revenue shall collect the fee imposed by subsection (1) of this section.

(1) Except as provided in subsection (2) of this section, the department shall provide reimbursement from the fund in accordance with section 66-1525 to eligible responsible persons for the cost of remedial action for releases reported after July 17, 1983, and on or before June 30, 2028, and for the cost of paying third-party claims. The reimbursement for the cost of remedial action shall not exceed nine hundred seventy-five thousand dollars per occurrence. The total of the claims paid under section 66-1531 and the reimbursement for third-party claims shall not exceed one million dollars per occurrence. The responsible person shall pay the first ten thousand dollars of the cost of the remedial action or third-party claim, twenty-five percent of the remaining cost of the remedial action or third-party claim not to exceed fifteen thousand dollars, and the amount of any reduction authorized under subsection (5) of section 66-1525. If the department determines that a responsible person was ordered to take remedial action for a release which was later found to be from a tank not owned or operated by such person, (a) such person shall be fully reimbursed and shall not be required to pay the first cost or percent of the remaining cost as provided in this subsection and (b) the first cost and percent of the remaining cost not required to be paid by the person ordered to take remedial action shall be paid to the fund as a cost of remedial action by the owner or operator of the tank found to be the cause of the release. In no event shall reimbursements or payments from the fund exceed the annual aggregate of one million nine hundred seventy-five thousand dollars per responsible person. Reimbursement of a cost incurred as a result of a suspension ordered by the department shall not be limited by this subsection if the suspension was caused by insufficiency in the fund to provide reimbursement.

(2) Upon the determination by the department that the responsible person sold no less than two thousand gallons of petroleum and no more than two hundred fifty thousand gallons of petroleum during the calendar year immediately preceding the first report of the release or stored less than ten thousand gallons of petroleum in the calendar year immediately preceding the first report of the release, the department shall provide reimbursement from the fund in accordance with section 66-1525 to such an eligible person for the cost of remedial action for releases reported after July 17, 1983, and on or before June 30, 2028, and for the cost of paying third-party claims. The reimbursement for the cost of remedial action shall not exceed nine hundred eighty-five thousand dollars per occurrence. The total of the claims paid under section 66-1531 and the reimbursement for third-party claims shall not exceed one million dollars per occurrence. The responsible person shall pay the first five thousand dollars of the cost of the remedial action or third-party claim, twenty-five percent of the remaining cost of the remedial action or third-party claim not to exceed ten thousand dollars, and the amount of any reduction authorized under subsection (5) of section 66-1525. If the department determines that a responsible person was ordered to take remedial action for a release which was later found to be from a tank not owned or operated by such person, (a) such person shall be fully reimbursed and shall not be required to pay the first cost or percent of the remaining cost as provided in this subsection and (b) the first cost and percent of the remaining cost not required to be paid by the person ordered to take remedial action shall be paid to the fund as a cost of remedial action by the owner or operator of the tank found to be the cause of the release. In no event shall reimbursements or payments from the fund exceed the annual aggregate of one million nine hundred eighty-five thousand dollars per responsible person. Reimbursement of a cost incurred as a result of a suspension ordered by the department shall not be limited by this subsection if the suspension was caused by insufficiency in the fund to provide reimbursement.

(3) The department may make partial reimbursement during the time that remedial action is being taken if the department is satisfied that the remedial action being taken is as required by the department.

(4) If the fund is insufficient for any reason to reimburse the amount set forth in this section, the maximum amount that the fund shall be required to reimburse is the amount in the fund. If reimbursements approved by the department exceed the amount in the fund, reimbursements with interest shall be made when the fund is sufficiently replenished in the order in which the applications for them were received by the department, except that an application pending before the department on January 1, 1996, submitted by a local government as defined in section 13-2202 shall, after July 1, 1996, be reimbursed first when funds are available. This exception applies only to local government applications pending on and not submitted after January 1, 1996.

(5) Applications for reimbursement properly made before, on, or after April 16, 1996, shall be considered bills for goods or services provided for third parties for purposes of the Prompt Payment Act.

(6) There shall be no reimbursement from the fund for the cost of remedial action or for the cost of paying third-party claims for any releases reported on or after July 1, 2028.

(7) For purposes of this section, occurrence shall mean an accident, including continuous or repeated exposure to conditions, which results in a release from a tank.

The State of Nebraska shall not be liable for any reimbursement under the Petroleum Release Remedial Action Act in the event that the fund is insufficient to reimburse the amount set forth in section 66-1523. Interest on any unpaid application for reimbursement shall continue to accrue on the principal amount of the application pursuant to the Prompt Payment Act until the principal amount of the reimbursement is paid, except such interest is not a liability of the state and is not required to be paid during any period of time that the fund is insufficient to pay the reimbursement.

On and after April 16, 1996, the department shall pay any unpaid applications by first paying the principal amount of all unpaid applications and then any accrued interest on the unpaid applications, except that the department shall not pay interest on interest. Notwithstanding provisions of the Prompt Payment Act and for purposes of applications on file with the department on April 16, 1996, applicants shall request payment of interest within ninety days of such date. For applications filed after April 16, 1996, all provisions of the Prompt Payment Act shall apply.

(1) Any responsible person or his or her designated representative who has taken remedial action in response to a release first reported after July 17, 1983, and on or before June 30, 2028, or against whom there is a third-party claim may apply to the department under the rules and regulations adopted and promulgated pursuant to section 66-1518 for reimbursement for the costs of the remedial action or third-party claim. Partial payment of such reimbursement to the responsible person may be authorized by the department at the approved stages prior to the completion of remedial action when a remedial action plan has been approved. If any stage is projected to take more than ninety days to complete partial payments may be requested every sixty days. Such partial payment may include the eligible and reasonable costs of such plan or pilot projects conducted during the remedial action.

(2) No reimbursement may be made unless the department makes the following eligibility determinations:

(a) The tank was in substantial compliance with any rules and regulations of the United States Environmental Protection Agency, the State Fire Marshal, and the department which were applicable to the tank. Substantial compliance shall be determined by the department taking into consideration the purposes of the Petroleum Release Remedial Action Act and the adverse effect that any violation of the rules and regulations may have had on the tank thereby causing or contributing to the release and the extent of the remedial action thereby required;

(b) Either the State Fire Marshal or the department was given notice of the release in substantial compliance with the rules and regulations adopted and promulgated pursuant to the Environmental Protection Act and the Petroleum Products and Hazardous Substances Storage and Handling Act. Substantial compliance shall be determined by the department taking into consideration the purposes of the Petroleum Release Remedial Action Act and the adverse effect that any violation of the notice provisions of the rules and regulations may have had on the remedial action being taken in a prompt, effective, and efficient manner;

(c) The responsible person reasonably cooperated with the department and the State Fire Marshal in responding to the release;

(d) The department has approved the plan submitted by the responsible person for the remedial action in accordance with rules and regulations adopted and promulgated by the department pursuant to the Environmental Protection Act or the Petroleum Products and Hazardous Substances Storage and Handling Act or that portion of the plan for which payment or reimbursement is requested. However, responsible persons may undertake remedial action prior to approval of a plan by the department or during the time that remedial action at a site was suspended at any time after April 1995 because the fund was insufficient to pay reimbursements and be eligible for reimbursement at a later time if the responsible person complies with procedures provided to the responsible party by the department or set out in rules and regulations adopted and promulgated by the Environmental Quality Council;

(e) The costs for the remedial action were actually incurred by the responsible person or his or her designated representative after May 27, 1989, and were eligible and reasonable;

(f) If reimbursement for a third-party claim is involved, the cause of action for the third-party claim accrued after April 26, 1991, and the Attorney General was notified by any person of the service of summons for the action within ten days of such service; and

(g) The responsible person or his or her designated representative has paid the amount specified in subsection (1) or (2) of section 66-1523.

(3) The State Fire Marshal shall review each application prior to consideration by the department and provide to the department any information the State Fire Marshal deems relevant to subdivisions (2)(a) through (g) of this section. The State Fire Marshal shall issue a determination with respect to an applicant's compliance with rules and regulations adopted and promulgated by the State Fire Marshal. The State Fire Marshal shall issue a compliance determination to the department within thirty days after receiving an application from the department.

(4) The department may withhold taking action on an application during the pendency of an enforcement action by the state or federal government related to the tank or a release from the tank.

(5) Reimbursements made for a remedial action may be reduced as much as one hundred percent for failure by the responsible person to comply with applicable statutory or regulatory requirements. In determining the amount of the reimbursement reduction, the department shall consider:

(a) The extent of and reasons for noncompliance;

(b) The likely environmental impact of the noncompliance; and

(c) Whether noncompliance was negligent, knowing, or willful.

(6) Except as provided in subsection (4) of this section, the department shall notify the responsible person of its approval or denial of the remedial action plan within one hundred twenty days after receipt of a remedial action plan which contains all the required information. If after one hundred twenty days the department fails to either deny, approve, or amend the remedial action plan submitted, the proposed plan shall be deemed approved. If the remedial action plan is denied, the department shall provide the reasons for such denial.

The amount of reimbursement to be paid for remedial action which was done by a third party shall not be subject to legal process or attachment if paid to the responsible person for the purpose of payment to a third party who performed the remedial action.

If the responsible person who has received partial reimbursement from the fund for remedial action does not complete the remedial action as required by the rules and regulations, the responsible person shall reimburse to the fund an amount equal to the reimbursements received from the fund.

Nothing in the Petroleum Release Remedial Action Act shall be construed to bar a common-law, statutory, or any other cause of action which may be maintained against a responsible person by a private person who, subsequent to a release, received a conveyance of any right, title, or interest in the parcel of real property on which such release occurred.

Nothing in the Petroleum Release Remedial Action Act shall be construed to prohibit a responsible person from assigning to a third party any right, title, or interest which the responsible person may have in and to the proceeds from reimbursement for remedial action. Such third party may be a designated representative for the purposes of the act.

(1) The department shall reimburse the responsible person from the fund for damages to fixtures and costs of tangible personal property related to the remedial action as set forth in subsections (2) and (3) of this section.

(2) The responsible person shall be reimbursed from the fund for reasonable repair or replacement costs approved in a remedial action plan for fixtures which are damaged by the remedial action, except in the case of intentional acts or gross negligence by the responsible person or his or her agents. Costs for removal of fixtures are eligible for reimbursement at the time of site closure if such fixtures were a part of the approved remedial action. All fixtures reimbursed by the fund which are attached to real property are owned by the responsible person or the property owner, if different from the responsible person.

(3) The responsible person shall be reimbursed from the fund for the value of tangible personal property purchased by the responsible person and used in the remedial action. Reimbursement shall be according to the current schedule of reasonable rates made available by the department pursuant to section 66-1518. All tangible personal property reimbursed by the fund is owned by the state. The department may use tangible personal property reimbursed by the fund in other remedial actions, store such property until needed, maintain the property, or sell or dispose of such property in a manner beneficial to the fund. Any proceeds from the sale or disposal of such property shall be remitted to the State Treasurer for credit to the fund.

(1) The department may undertake remedial actions in response to a release first reported after July 17, 1983, and on or before June 30, 2028, with money available in the fund if:

(a) The responsible person cannot be identified or located;

(b) An identified responsible person cannot or will not comply with the remedial action requirements; or

(c) Immediate remedial action is necessary, as determined by the Director of Environment and Energy, to protect human health or the environment.

(2) The department may pay the costs of a third-party claim meeting the requirements of subdivision (2)(f) of section 66-1525 with money available in the fund if the responsible person cannot or will not pay the third-party claim.

(3) Reimbursement for any damages caused by the department or a person acting at the department's direction while investigating or inspecting or during remedial action on property other than property on which a release or suspected release has occurred shall be considered as part of the cost of remedial action involving the site where the release or suspected release occurred. The costs shall be reimbursed from money available in the fund. If such reimbursement is deemed inadequate by the party claiming the damages, the party's claim for damages caused by the department shall be filed as provided in section 76-705.

(4) All expenses paid from the fund under this section, court costs, and attorney's fees may be recovered in a civil action in the district court of Lancaster County. The action may be brought by the county attorney or Attorney General at the request of the director against the responsible person. All recovered expenses shall be deposited into the fund.

The department shall cooperate in any action necessary to obtain federal funding to carry out the Petroleum Release Remedial Action Act.

A person, other than a responsible person, may file a claim with the State Claims Board under the State Miscellaneous Claims Act for (1) property damage caused by a release and (2) reasonable costs directly incurred due to uninhabitability of a dwelling or unfitness of a water supply caused by a release. For purposes of claims made under this section, property damage means damage to real estate or water well contaminated as a result of a release. Claims approved under this section shall be approved on the basis of merit and eligibility as set forth in section 66-1525. Claims approved under this section shall be reduced by any third-party claim, as defined in section 66-1515.01, for the same damage. A claim approved under this section shall not be considered to be from a collateral source in a judicial proceeding for the same damage. Any claim under this section shall be paid from the Petroleum Release Remedial Action Cash Fund within sixty days after the claim is approved pursuant to section 81-8,300, subject to section 66-1523. A claim approved under this section shall not exceed two hundred thousand dollars and the total claims paid for property damage shall not exceed eight hundred thousand dollars per occurrence.

Sections 66-1601 to 66-1627 shall be known and may be cited as the Propane Education and Research Act.

The purposes of the Propane Education and Research Act are (1) to authorize the creation of an industry-financed entity which will enable the Nebraska propane industry to educate the public and industry employees about proper safety and procedures in the storage, handling, transportation, and use of propane in any of its traditional residential, commercial, recreational, or agricultural applications and (2) to support efforts to increase the efficiency and value of propane energy service to the industry and its customers.

For purposes of the Propane Education and Research Act, the definitions found in sections 66-1604 to 66-1616 shall be used.

Bulk means quantities of more than five thousand gallons.

Council means the Propane Education and Research Council established under sections 66-1617 and 66-1618.

Education means any action which provides information, instruction, or safety guidelines about propane, propane equipment, mechanical and technical practices, and uses of propane to propane consumers or industry employees.

Industry means those persons involved in the production, transportation, and sale of propane and in the manufacture and distribution of propane utilization equipment.

Industry trade association means an organization which represents a segment of the industry and which is exempt from tax under section 501(c)(3) or (6) of the Internal Revenue Code.

Manufacturer and distributor of liquefied petroleum gas equipment means any person engaged in manufacturing, assembling, and marketing appliances, containers, and products used in the liquefied petroleum gas industry and any person in the wholesale marketing of appliances, containers, and products used in the liquefied petroleum gas industry.

Odorized propane means propane with odorant added.

Person means any: Individual; partnership; limited liability company; association; public or private corporation; trustee; receiver; assignee; agent; municipality or other governmental subdivision; public agency; other legal entity; or any officer or governing or managing body of any public or private corporation, municipality, governmental subdivision, public agency, or other legal entity.

Propane means propane, butane, mixtures, and liquefied petroleum gas as defined by the National Fire Protection Association Standard 58 for the Storage and Handling of Liquefied Petroleum Gases the chemical composition of which is predominantly C3H8, whether recovered from natural gas or crude oil.

Qualified industry organization means any organization or industry trade association the members of which are engaged in the sale or distribution of odorized propane to the ultimate consumer or the sale of propane utilization equipment to the ultimate consumer.

Research means any type of study, investigation, or other activity performed by a qualified public or private research group for the purpose of advancing and improving the existing technology related to the propane industry, including the development of increased efficiency of propane use, of enhancing the safety of propane and propane utilization equipment, or of furthering the development of such information and products.

Retail marketer means any person with bulk propane storage engaged in the sale of odorized propane to the ultimate consumer or to retail propane dispensers within Nebraska.

Wholesaler, supplier, or importer means the owner of the propane at the time it is first delivered into Nebraska regardless of the state where production occurs, with ownership of the propane determined by the freight on board designation.

(1) One or more qualified industry organizations, which in the aggregate represent at least thirty-five percent of the total volume of odorized propane sold at retail in the State of Nebraska, may conduct a referendum among retail marketers for the creation of the Propane Education and Research Council. The organization conducting the referendum shall pay the cost of the referendum. If the council is established, the council shall reimburse the organization for the costs incurred by the independent accounting firm under subsection (2) of this section and any other costs for the referendum incurred which the council finds reasonable and necessary.

(2) The referendum shall be conducted by an independent accounting firm selected by the qualified industry organization initiating the referendum. Each retail marketer voting in the referendum shall be allowed one vote for each gallon of retail odorized propane sold by such retail marketer within the State of Nebraska in the previous calendar year or other specified representative period. All persons voting in the referendum shall certify to the independent accounting firm the volume of odorized propane represented by their votes. This information shall be treated as confidential information. Only vote totals shall be made public.

(3) Upon approval by retail marketers representing a majority of the votes cast in the referendum, the qualified industry organization initiating the referendum shall certify the vote to the Governor, the Propane Education and Research Council shall be created, and its members shall be appointed by the Governor as provided in section 66-1618.

(1) The council shall be appointed by the Governor within sixty days after the date the vote is certified to the Governor pursuant to section 66-1617. The council shall consist of nine members, including four members representing retail marketers, one member representing wholesalers, suppliers, and importers, one member representing manufacturers and distributors of liquefied petroleum gas equipment, one member representing the academic or propane research community, one propane user or consumer, and the State Fire Marshal or his or her designee. Other than the State Fire Marshal or his or her designee and the representatives of the research community and consumers, members shall be full-time employees or owners of businesses in the industry or representatives of agriculture cooperatives. Only one person from any company or an affiliated company may serve on the council at a time. All members shall be Nebraska residents, except that the members representing wholesalers, suppliers, and importers and manufacturers and distributors of liquefied petroleum gas equipment may be residents of other states.

(2) Members of the council shall serve terms of three years, except that, of the initial members, three shall be appointed for terms of one year and three shall be appointed for terms of two years. Members filling unexpired terms shall be appointed in a manner consistent with this section. Members may serve a maximum of two consecutive full terms, except that members filling unexpired terms may serve a maximum of seven consecutive years. Members filling unexpired terms shall be appointed in a manner consistent with this section. Former members may be reappointed if they have not been members for a period of two years.

(1) The council shall provide rules and regulations to carry out its responsibilities under the Propane Education and Research Act.

(2) The council may enter into contracts with, use facilities and equipment of, or employ the personnel of a qualified industry organization in carrying out the council's responsibilities under the act.

(3) The council shall protect the handling of council funds through fidelity bonds.

(4) The administrative costs of operating the council shall not exceed twenty percent of the funds collected pursuant to section 66-1621 in any fiscal year.

(5) The council shall operate in accordance with the Open Meetings Act.

(6) At the beginning of each fiscal year, the council shall prepare a budget plan which includes the estimated costs of all programs, projects, and contracts. The council shall provide an opportunity for public comment on the budget. The council shall prepare and make available to the public an annual report detailing the activities of the council in the previous year, those planned for the coming year, and the costs related to the activities.

(7) The council shall keep minutes, books, and records that clearly reflect all of the acts and transactions of the council. The books of the council shall be audited by a certified public accountant at least once each fiscal year and at such other times as the council may designate. Copies of the audit shall be provided to the executive director, if one is appointed by the council, to all members of the council, to the Clerk of the Legislature, and to any other member of the industry upon request.

(8) The council shall issue notice of meetings and shall require reports on the activities of the committees and subcommittees and on compliance, violations, and complaints regarding the implementation of the Propane Education and Research Act.

The council shall develop programs and projects and enter into contracts or agreements for implementing the Propane Education and Research Act, including, but not limited to, programs to enhance consumer and employee safety and training, programs to provide research and development to improve existing propane technology, programs to increase efficiency of propane use, and any other programs to educate the public about the environmental and safety aspects of propane. At least seventy percent of the funds collected pursuant to section 66-1621 shall be used for education or for improvement of propane utilization safety equipment technology. No funds shall be used for the sole purpose of advertising propane or propane utilization equipment. Safety issues shall receive first priority in the development of all programs and projects funded by the council. The council shall provide for the payment of the costs for the programs and projects with funds collected pursuant to such section and shall coordinate its activities with qualified industry organizations to provide efficient delivery of services and to avoid unnecessary costs or duplication of activities.

(1) The council may levy a propane education and research fee on odorized propane sold in Nebraska to fund the Propane Education and Research Act. The fee shall not exceed two-tenths of one cent per gallon. The fee shall be calculated by multiplying the fee rate by the number of net gallons of odorized propane on a bill of lading, an invoice, or a shipping document of the wholesaler, supplier, or importer who first sells or offers for sale odorized propane or uses odorized propane in this state, who shall pay the fee. If the quantity specified in the bill of lading, invoice, or shipping document is listed in units other than gallons, the wholesaler, supplier, or importer shall convert those units to gallons, using conversion tables approved by the council, prior to remitting the fee to the council.

Fee payments shall be remitted to the council on a regular basis as established by the council. Nonodorized propane shall not be subject to the fee until odorized. The council may establish a late payment charge and provide for interest, at a rate equal to the maximum rate of interest allowed per annum under section 45-104.01 as such rate may from time to time be adjusted by the Legislature, to be imposed on any person who fails to remit any amount due under the act.

(2) Any funds which are due to the State of Nebraska and collected from a national assessment levied on propane shall be designated and accrue to the benefit of the council and shall be spent in accordance with the federal Propane Education and Research Act of 1996.

(3) Funds collected by the council shall not be used in any manner for influencing legislation or for political campaign contributions.

The Propane Education and Research Act does not preempt or supersede any other program relating to propane safety or education which has been organized and is operating under state law.

All retail marketers of retail propane in Nebraska shall carry minimum liability insurance coverage of at least two million dollars, with proof of insurance provided to the State Fire Marshal. All persons employed in the installation or service of any propane system shall fully comply with training requirements provided in applicable sections governing the sale of propane as set forth by the National Fire Protection Association. Applicable requirements for guidelines as set forth by the National Fire Protection Association shall be enforced by the office of the State Fire Marshal.

Violation of this section shall subject the violator to a civil penalty of not less than one hundred dollars per day and not more than one thousand dollars per day. In case of a continuing violation, each day constitutes a separate offense. The amount of the penalty shall be based on the degree and extent of the violation. The Attorney General or each county attorney to whom the State Fire Marshal reports a violation shall institute appropriate proceedings without delay to assure compliance with this section.

(1) The council may on its own initiative and shall upon the petition of retail marketers representing at least thirty-five percent, as determined by the council, of the total volume of odorized propane sold at retail in the State of Nebraska hold a referendum to be conducted by an independent accounting firm selected by the council to determine whether the council should be suspended or terminated. The council shall pay the costs of the referendum under this section.

(2) The council shall be suspended or terminated if suspension or termination is approved by retail marketers representing more than fifty percent, as determined by the council, of the total volume of odorized propane sold at retail in the State of Nebraska.

It is the intent of the Legislature that the price of propane shall always be determined by market forces. The council shall take no action to interfere in any manner with the free market process.

Any person who unreasonably fails or refuses to pay any fee due under the Propane Education and Research Act may be subject to legal action by the council to recover the fees due, plus interest and costs.

The district court or county court of the county in which the violation occurs or in which the person required to pay the fee under section 66-1621 resides shall have jurisdiction to enjoin violations of the Propane Education and Research Act or the rules and regulations provided for under the act, as well as jurisdiction for civil actions to recover fees due, plus interest and costs. If neither of the jurisdictional considerations in this section applies, the district court of Lancaster County shall have jurisdiction.

Sections 66-1801 to 66-1868 shall be known and may be cited as the State Natural Gas Regulation Act.

For purposes of the State Natural Gas Regulation Act:

(1) Agricultural ratepayer means a ratepayer whose usage of natural gas does not qualify the ratepayer as a high-volume ratepayer and (a) whose principal use of natural gas is for agricultural crop or livestock production, irrigation pumping, crop drying, or animal feed or food production or (b) whose service is provided on an interruptible basis;

(2) Appropriate pretax revenue means the revenue necessary to produce net operating income equal to:

(a) The jurisdictional utility's weighted cost of capital multiplied by the net original cost of eligible infrastructure system replacements, including recognition of accumulated deferred income taxes and accumulated depreciation associated with eligible infrastructure system replacements which are included in an infrastructure system replacement cost recovery charge;

(b) Recovery of state, federal, and local income or excise taxes applicable to such income; and

(c) Recovery of depreciation expenses;

(3) BTU means the amount of energy necessary to raise the temperature of one pound of water one degree Fahrenheit;

(4) City means any city or village in the State of Nebraska;

(5) Commission means the Public Service Commission;

(6) Eligible infrastructure system replacement means jurisdictional utility plant projects that:

(a) Do not increase revenue by directly connecting the infrastructure system replacement to new customers;

(b) Are in service and used and required to be used;

(c) Were not included in the jurisdictional utility's rate base in its most recent general rate proceeding; and

(d) May enhance the capacity of the system but are only eligible for infrastructure system replacement cost recovery to the extent the jurisdictional utility plant project constitutes a replacement of existing infrastructure;

(7) Gas gathering system means a natural gas pipeline system used primarily for transporting natural gas from a wellhead, or from a metering point for natural gas produced by one or more wells, to a point of entry into a main transmission line;

(8) General rate filing means any filing which requests changes in overall revenue requirements for a jurisdictional utility but does not include a filing for an infrastructure system replacement cost recovery charge;

(9) High-volume ratepayer means a ratepayer whose natural gas requirements equal or exceed five hundred therms per day as determined by average daily consumption;

(10) Infrastructure system replacement cost recovery charge revenue means revenue produced through an infrastructure system replacement cost recovery charge exclusive of revenue from all other rates and charges;

(11) Interstate pipeline means any corporation, company, individual, or association of persons or their trustees, lessees, or receivers engaged in natural gas transportation subject to the jurisdiction of the Federal Energy Regulatory Commission under the federal Natural Gas Act, 15 U.S.C. 717 et seq., as such act existed on January 1, 2003;

(12) Intrastate natural gas utility business means all of that portion of the business of a natural gas public utility over which the commission has jurisdiction under the State Natural Gas Regulation Act;

(13) Jurisdictional utility means a natural gas public utility subject to the jurisdiction of the commission. Jurisdictional utility does not mean a natural gas public utility which is not subject to the jurisdiction of the commission pursuant to section 66-1803;

(14) Jurisdictional utility plant projects means only the following:

(a) Mains, valves, service lines, regulator stations, vaults, and other pipeline system components installed to comply with state or federal safety requirements as replacements for existing facilities;

(b) Main relining projects, service line insertion projects, joint encapsulation projects, and other similar projects extending the useful life or enhancing the integrity of pipeline system components undertaken to comply with state or federal safety requirements; and

(c) Facility relocations required due to construction or improvement of a highway, road, street, public way, or other public work by or on behalf of the United States, this state, a political subdivision of this state, or another entity having the power of eminent domain, if the costs related to such relocations have not been reimbursed to the jurisdictional utility;

(15) Natural gas public utility means any corporation, company, individual, or association of persons or their trustees, lessees, or receivers that owns, controls, operates, or manages, except for private use, any equipment, plant, or machinery, or any part thereof, for the conveyance of natural gas through pipelines in or through any part of this state. Natural gas public utility does not mean a natural gas utility owned or operated by a city or a metropolitan utilities district. Natural gas public utility does not include any activity of an otherwise jurisdictional corporation, company, individual, or association of persons or their trustees, lessees, or receivers as to the marketing or sale of compressed natural gas for end use as motor vehicle fuel. Natural gas public utility does not include any gas gathering system or interstate pipeline;

(16) Rate means every compensation, charge, fare, toll, tariff, rental, and classification, or any of them, demanded, observed, charged, or collected by any jurisdictional utility for any service;

(17) Rate area means the geographic area within the state served by a single natural gas public utility through a common pipeline system from the same natural gas supply source within the common system for which the utility has similar costs for serving ratepayers of the same class; and

(18) Therm is equivalent to one hundred thousand BTUs.

(1) A natural gas public utility shall not be subject to the jurisdiction of the commission or the requirements of the State Natural Gas Regulation Act if (a) it distributes, sells, or transports natural gas or provides natural gas services to persons receiving services through fewer than seven thousand five hundred meters in the state, (b) it has entered into an agreement with a city in which it distributes, sells, or transports natural gas or provides natural gas services that establishes the terms and conditions of the service and the rates to be paid and such agreement is authorized by an ordinance in effect at the time of the distribution, sale, or transportation of natural gas or provision of natural gas services, and (c) the terms and conditions of such agreement are applicable to customers, if any, served by the natural gas public utility outside the jurisdiction of the city.

(2) Any ratepayer or city served by a natural gas public utility pursuant to subsection (1) of this section, the commission, the public advocate, or the natural gas public utility providing service pursuant to subsection (1) of this section may pursue an action in the district court of the county in which such utility operates for a determination as to whether or not such utility is subject to the jurisdiction of the commission and the requirements of the act by reason of the failure to meet one or more of the qualifying factors set out in subsection (1) of this section.

(1) The commission shall have full power, authority, and jurisdiction to regulate natural gas public utilities and may do all things necessary and convenient for the exercise of such power, authority, and jurisdiction. Except as provided in the Nebraska Natural Gas Pipeline Safety Act of 1969, and notwithstanding any other provision of law, such power, authority, and jurisdiction shall extend to, but not be limited to, all matters encompassed within the State Natural Gas Regulation Act.

(2) The State Natural Gas Regulation Act and all grants of power, authority, and jurisdiction in the act made to the commission shall be liberally construed, and all incidental powers necessary to carry into effect the provisions of the act are expressly granted to and conferred upon the commission.

(1) The commission may adopt and promulgate rules and regulations to govern its proceedings and with regard to the mode and manner of all investigations, tests, audits, inspections, filings, and hearings. The commission may adopt and promulgate rules and regulations governing matters in the State Natural Gas Regulation Act and in furtherance of the act, including, but not limited to:

(a) Procedures and requirements for applications for rate and tariff changes;

(b) Requirements for jurisdictional utilities to maintain and make available to the public and the commission records and information;

(c) Requirements and procedures regarding customer billings and meter readings;

(d) Requirements regarding availability of meter tests;

(e) Requirements regarding billing adjustments for meter errors;

(f) Procedures and requirements for handling customer disputes and complaints;

(g) Procedures and requirements regarding temporary service, changes in location of service, and service interruptions;

(h) Standards and procedures to ensure nondiscriminatory credit policies;

(i) Procedures, requirements, and record-keeping guidelines regarding deposit policies;

(j) Procedures, requirements, and record-keeping guidelines regarding customer refunds;

(k) Policies for refusal of natural gas service;

(l) Policies for disconnection and transfer of natural gas service;

(m) Customer payment plans for delinquent bills;

(n) Requirements regarding advertising;

(o) The assessment and taxation of costs and fees;

(p) Procedures, requirements, and policies regarding the preservation, confidentiality, and disclosure of records in the possession of the commission; and

(q) Reporting requirements for transactions involving affiliated interests of jurisdictional utilities.

(2) The commission may:

(a) Confer with officers of other states and officers of the United States on any matter pertaining to the commission's official duties;

(b) Enter into and establish fair and equitable cooperative agreements or contracts with or act as an agent or licensee for the United States, or any official, agency, or instrumentality thereof, or any similar commission of another state, for the purpose of carrying out the commission's duties and to that end receive and disburse any contributions, grants, or other financial assistance as a result of or pursuant to such agreements or contracts; and

(c) Make joint investigations, hold joint hearings within or outside the state, and issue joint or concurrent orders in conjunction or concurrence with such official, agency, instrumentality, or commission.

(3) The Attorney General, when requested, shall give the commission such counsel and advice as the commission may from time to time require. The Attorney General shall aid and assist the commission in all judicial hearings, suits, and proceedings in which the commission requests the Attorney General's assistance.

Every jurisdictional utility shall publish and file with the commission copies of all schedules of rates and shall furnish the commission copies of all terms and conditions of service and contracts between jurisdictional utilities pertaining to any and all jurisdictional services to be rendered by such jurisdictional utilities. The commission may adopt and promulgate reasonable rules and regulations regarding the form and filing of all schedules of rates and all rules and regulations of such jurisdictional utility, including such protection of confidentiality as requested by the jurisdictional utility, and the jurisdictional utility's suppliers and ratepayers, for contracts entered into by them, and as the commission determines reasonable and appropriate.

Except as otherwise provided in the State Natural Gas Regulation Act, all orders, rules, regulations, practices, services, rates, charges, classifications, and tolls fixed by the commission shall be prima facie reasonable unless or until changed or modified by the commission or in pursuance of proceedings instituted in court as provided in the act.

(1) The provisions of this section do not apply to general rate filings.

(2) Unless the commission otherwise orders, no jurisdictional utility shall make effective any changed rate or any term or condition of service pertaining to the service or rates of such utility, except by filing the same with the commission at least thirty days prior to the proposed effective date. The commission, for good cause, may allow such changed rate or any term or condition of service pertaining to the service or rates of any such utility, to become effective on less than thirty days' notice. If the commission allows a change to become effective on less than thirty days' notice, the effective date of the allowed change shall be the date established in the commission order approving such change or the date of the order if no effective date is otherwise established. Any such proposed change shall be shown by filing with the commission a schedule showing the changes, and such changes shall be plainly indicated by proper reference marks in amendments or supplements to existing tariffs, schedules, or classifications, or in new issues thereof.

(3) Whenever any jurisdictional utility files with the commission the changes desired to be made and put in force by such utility, the commission, either upon complaint or upon its own motion, may give notice and hold a hearing upon such proposed changes. Pending such hearing, the commission may suspend the operation of such change and defer the effective date of such change in rate or any term or condition of service pertaining to the service or rates of any such utility, by delivering to such utility a statement in writing of its reasons for such suspension. The commission may not suspend a tariff filed pursuant to section 66-1868.

(4) The commission shall not delay the effective date of the proposed change in rate or any term or condition of service pertaining to the service or rates of any such jurisdictional utility, more than one hundred eighty days beyond the date the utility filed its application requesting the proposed change. If the commission does not suspend the proposed change within thirty days after the date the same is filed by the utility, such proposed change shall be deemed approved by the commission and shall take effect on the proposed effective date. If the commission has not issued a final order on the proposed change in any rate or any term or condition of service pertaining to the service or rates of any such utility, within one hundred eighty days after the date the utility files its application requesting the proposed change, then the proposed change shall be deemed approved by the commission and the proposed change shall be effective immediately, except that (a) in any proceeding initiated as a result of a filing by a utility of new or changed rates or terms and conditions of service, the commission shall, within thirty days of the receipt of such filing, review the applications, documents, and submissions made with such filing to determine whether or not they conform to the minimum requirements of the commission regarding such filings as established by applicable rule, regulation, or commission order. If such applications, documents, or submissions fail to substantially conform with such requirements, they will be deemed defective and the filing shall not be deemed to have been made until such applications, documents, and submissions are determined to be in conformity by the commission with minimum standards, and (b) nothing in this subsection shall preclude the jurisdictional utility and the commission from agreeing to a waiver or an extension of the one-hundred-eighty-day period.

(5) Except as provided in subsection (4) of this section, no change shall be made in any rate or in any term or condition of service pertaining to the service or rates of any such jurisdictional utility, without the consent of the commission. Within thirty days after such changes have been authorized by the commission or become effective as provided in subsection (4) of this section, copies of all tariffs, schedules, and classifications, and all terms or conditions of service, except those determined to be confidential under rules and regulations adopted by the commission, shall be available for public inspection in every office and facility open to the general public of such jurisdictional utility in this state.

(6) Except as to the time limits prescribed in subsection (4) of this section, proceedings under this section shall be conducted in accordance with rules and regulations adopted and promulgated pursuant to section 75-110.

(1) The commission, upon its own initiative, may investigate all schedules of rates, contracts, and terms and conditions of service of jurisdictional utilities. If after notice, investigation, and hearing the commission finds that such rates or terms and conditions of service are unjust, unreasonable, unjustly discriminatory, or unduly preferential, the commission shall have the power to establish and order substituted therefor such rates and such terms and conditions of service as are just and reasonable, effective as of the date of the order.

(2) If after investigation and hearing it is found that any term or condition of service, measurement, practice, act, or service complained of is unjust, unreasonable, unduly preferential, unjustly discriminatory, or otherwise in violation of the State Natural Gas Regulation Act or of the orders of the commission or if it is found that any service is inadequate or that any reasonable service cannot be obtained, the commission may substitute therefor, effective as of the date of the order, such other terms or conditions of service, measurements, practices, acts, or service and make such order respecting any such changes in such terms and conditions of service, measurements, practices, acts, or service as are just and reasonable. When, in the judgment of the commission, public necessity and convenience require, the commission may establish just and reasonable rates, charges, or privileges, but all such rates, charges, and privileges shall be open to all users of a like kind of service under similar circumstances and conditions. Hearings shall be conducted in accordance with rules and regulations adopted and promulgated pursuant to section 75-110.

(1) A jurisdictional utility may provide service at negotiated rates, contracts, and terms and conditions of service under contract to high-volume ratepayers. Service under the contracts shall be provided on such terms and conditions and for such rates or charges as the jurisdictional utility and the high-volume ratepayer agree, without regard to any rates, tolls, tariffs, or charges the jurisdictional utility may have filed with the commission. Upon the request of the commission, the jurisdictional utility shall file such contracts with the commission. The contracts are not public records within the meaning of sections 84-712 to 84-712.09 and their disclosure to any other person or corporation for any purpose is expressly prohibited, except that they may be used by the commission in any investigation or proceeding. Except as provided in this subsection, high-volume ratepayers shall not be subject to the jurisdiction of the commission.

(2) A jurisdictional utility may change any rate or other charge demanded or received from or terms and conditions applicable to its agricultural ratepayers and interruptible ratepayers not otherwise qualifying as high-volume ratepayers, upon notice to the commission and to the public. The commission may not suspend such rate or charge filed by a jurisdictional utility, except that the commission, after hearing and order, may change any such rate or other charge demanded or received from a jurisdictional utility's agricultural ratepayers upon complaint effective as of the date of the order, if such rate or other charge is found in such complaint proceeding to be unduly preferential or unjustly discriminatory. The provisions of this subsection apply notwithstanding any provision in the State Natural Gas Regulation Act to the contrary.

(1) Upon a complaint in writing made against any jurisdictional utility (a) that any rates or terms and conditions of service of such utility are in any respect unreasonable, unjust, unjustly discriminatory, or unduly preferential, (b) that any terms and conditions of service or act whatsoever affecting or relating to any service performed or to be performed by such utility for the public, is in any respect unreasonable, unjust, unjustly discriminatory, or unduly preferential, or (c) that any service performed or to be performed by such utility for the public is inadequate, insufficient, or cannot be obtained, the commission may proceed, with or without notice, to make such investigation as it deems necessary.

(2) No order changing such rates, terms and conditions, or acts complained of shall be made or entered by the commission without a formal public hearing in accordance with rules and regulations adopted and promulgated pursuant to section 75-110, of which due notice shall be given by the commission to such utility or to such complainant or complainants, if any.

(3) The commission shall have power to require jurisdictional utilities to make such improvements and do such acts as are or may be required by law to be done by any such utility, including refunds as authorized by law.

(4) The commission may hold public hearings in the area being impacted by any rate investigation or rate increase being considered by the commission to hear public comments.

(5) If after investigation and hearing the rates or terms and conditions of service of any jurisdictional utility are found unjust, unreasonable, unjustly discriminatory, or unduly preferential, or in any way in violation of the provisions of the State Natural Gas Regulation Act or of any of the laws of the State of Nebraska, the commission shall have the power to establish, and to order substituted therefor, to be effective as of the date of the order, such rates or terms and conditions of service as the commission determines to be just, reasonable, and necessary. If it is found that any term or condition of service, practice, or act relating to any service performed or to be performed by such utility is in any respect unreasonable, unjust, insufficient, unjustly discriminatory, or unduly preferential, or otherwise in violation of any of the provisions of the act or of any of the laws of the State of Nebraska, the commission may substitute therefor by order such other terms and conditions of service, practice, service, or act as it determines to be just, reasonable, and necessary, to be effective as of the date of the order.

On timely filing of a petition for intervention, any county or city may intervene, on behalf of ratepayers located within their respective boundaries, in any rate proceeding before the commission that involves the rates of a jurisdictional utility serving ratepayers located within their respective boundaries.

In proceedings for review of an action of the commission, the commission and any jurisdictional utility which participated in the agency proceeding and could be bound by the review shall be parties to the proceedings and shall have all rights and privileges granted by the State Natural Gas Regulation Act to any other party to such proceedings.

Any action of the commission pursuant to the State Natural Gas Regulation Act is subject to review in accordance with section 75-136.

(1) Every jurisdictional utility shall file with the commission an annual report and such monthly or other regular reports, or special reports, and such other information as the commission may require.

(2) Any jurisdictional utility which fails, neglects, or refuses to file with the commission any annual reports, statements, monthly or regular reports, or special reports required by the commission pursuant to the State Natural Gas Regulation Act or rules and regulations of the commission shall be subject to a civil penalty of not more than five hundred dollars.

No jurisdictional utility shall purchase or acquire, take, or hold any part of the voting stock, bonds, or other forms of indebtedness of any competing jurisdictional utility, either as owner or pledgee, unless authorized by the commission.

(1) Any jurisdictional utility property may be deemed to be completed and dedicated to commercial service if construction of the property will be commenced and completed in one year or less.

(2) The commission may determine that property of a jurisdictional utility which has not been completed and dedicated to commercial service may be deemed to be used and useful in the utility's service to the public.

The commission shall have authority to examine and audit all accounts of jurisdictional utilities, and all items shall be allocated to the accounts prescribed by the commission. Every jurisdictional utility shall be required to keep and render its books, accounts, papers, and records accurately and truthfully in accordance with the system of accounts prescribed by the Federal Energy Regulatory Commission. All accounting information provided by jurisdictional utilities regarding Nebraska jurisdictional operations shall be presented in accordance with the system of accounts prescribed by the Federal Energy Regulatory Commission. The agents, accountants, or examiners hired or contracted by the Public Service Commission shall have authority under the direction of the commission to inspect and examine any and all relevant books, accounts, papers, records, property, and memoranda kept by such utilities.

(1) For purposes of this section, nonregulated private enterprise means: (a) The business of selling or otherwise providing any gas or electric household appliance; (b) the business of installing any gas or electric household appliance; or (c) the business of servicing any gas or electric household appliance under a contract providing for maintenance or repair of such appliance for a period of time specified by the contract.

(2) Each jurisdictional utility shall maintain, in accordance with generally accepted accounting principles, separate accounts for all nonregulated private enterprise engaged in by such utility. The accounting shall include both costs and revenue associated with such enterprise. Costs to be allocated to such separate accounts shall include materials, labor, insurance, transportation, and all other direct and indirect costs of engaging in the nonregulated private enterprise. Costs or revenue required to be allocated to such separate accounts shall not be included in any rate, toll, or charge for any utility service of the utility.

(3) Except as provided in subsection (4) of this section, the commission may at any time examine and audit the books, accounts, papers, records, and memoranda kept by a natural gas public utility in order to determine compliance with this section.

(4) No audit shall be conducted pursuant to this section more often than once every two years, but nothing in this subsection shall be construed to limit the authority of the commission pursuant to other provisions of the State Natural Gas Regulation Act to examine and audit, for any purpose, the books, accounts, papers, records, and memoranda kept by a natural gas public utility.

No franchise ordinance involving a jurisdictional utility adopted on or after May 31, 2003, shall include provisions contrary to or inconsistent with the State Natural Gas Regulation Act. A city shall file with the commission copies of any such franchise ordinance adopted on or after May 31, 2003, within thirty days of its passage.

No franchise or certificate of convenience granted to a jurisdictional utility shall be assigned, transferred, or leased unless the assignment, transfer, or lease has been approved by the commission as being consistent with the public interest.

Any person who knowingly makes any false entry in the accounts, books of account, records, or memoranda kept by any jurisdictional utility, who knowingly destroys, mutilates, alters, or by any other means or device falsifies the record of any such account, book of accounts, record, or memorandum, who knowingly neglects or fails to make full, true, and correct entries in such account, book of accounts, record, or memorandum of all facts and transactions pertaining to such utility, or who knowingly makes any false statement required to be made to the commission, shall be guilty of a Class IV felony.

The commission may compel compliance with the State Natural Gas Regulation Act and compel compliance with the orders of the commission by proceeding in mandamus, injunction, or other appropriate civil remedies or by appropriate criminal proceedings in any court of competent jurisdiction.

(1) The commission shall have power to intervene in any case pending before the relevant federal agency in which interstate rates, service, or safety issues affecting the interest of Nebraska residents, ratepayers, or natural gas public utilities are involved, and the commission is hereby empowered and authorized to pay all expenses of investigation and prosecution of litigation instituted under this section.

(2) If any interstate rate, toll, charge, term or condition of service, classification, or schedule of rates or tolls is found to be unjust, unreasonable, excessive, unjustly discriminatory, unduly preferential, in violation of interstate commerce law, or in conflict with the rules, regulations, or orders of a federal agency, the commission may apply by petition or other proper method to the relevant federal agency for relief.

(1) Every rate made, demanded, or received by any natural gas public utility shall be just and reasonable. Rates shall not be unreasonably preferential or discriminatory and shall be reasonably consistent in application to a class of ratepayers. Rates negotiated with agricultural ratepayers and high-volume ratepayers in conformity with the State Natural Gas Regulation Act shall not be considered discriminatory.

(2) No jurisdictional utility shall, as to rates or terms and conditions of service, make or grant any unreasonable preference or advantage to any person or subject any person to any unreasonable prejudice or disadvantage.

(3) The commission, in the exercise of its power and duty to determine just and reasonable rates for natural gas public utilities, shall give due consideration to the public need for adequate, efficient, and reasonable natural gas service and to the need of the jurisdictional utility for revenue sufficient to enable it to meet the cost of furnishing the service, including adequate provisions for depreciation of its utility property used and useful in rendering service to the public, and to earn a fair and reasonable return upon the investment in such property.

(4) Cost of service shall include operating expenses and a fair and reasonable return on rate base, less appropriate credits.

(5) In determining a fair and reasonable return on the rate base of a jurisdictional utility, a rate-of-return percentage shall be employed that is representative of the utility's weighted average cost of capital including, but not limited to, long-term debt, preferred stock, and common equity capital.

(6) The rate base of the jurisdictional utility shall consist of the utility's property, used and useful in providing utility service, including the applicable investment in utility plant, less accumulated depreciation and amortization, allowance for working capital, such other items as may be reasonably included, and reasonable allocations of common property, less such investment as may be reasonably attributed to other than investor-supplied capital unless such deduction is otherwise prohibited by law.

(7) Operating expenses shall consist of expenses prudently incurred to provide natural gas service including (a) a reasonable allocation of common expenses as authorized and limited by section 66-1819 and (b) the quantity and type of purchased services regulated by the Federal Energy Regulatory Commission.

(8) In determining the cost of service, the Public Service Commission shall give effect to all costs and allocations as reflected in the rate schedules approved by the Federal Energy Regulatory Commission.

(9) The Public Service Commission may include in a jurisdictional utility's rate base the full or partial value of stranded investment which was prudently incurred when the investment actually was, or reasonably was expected to be, used and useful in providing service to ratepayers and was stranded due to changes in regulation or other circumstances reasonably beyond the utility's control and subject to any reasonable obligation of the utility to mitigate the cost.

(10) Subsidization is prohibited. For purposes of this subsection, subsidization means the establishment of rates to be collected from a ratepayer or class of ratepayers of a jurisdictional utility that (a) include costs that properly are includable in rates charged to other ratepayers or classes of ratepayers of the utility, or other persons, firms, companies, or corporations doing business with the jurisdictional utility, (b) exclude costs that properly are includable in rates charged to such ratepayers or classes of ratepayers, or (c) include costs that properly are chargeable or allocable to a nonregulated private enterprise engaged in by such jurisdictional utility.

If the commission determines on complaint or upon its own initiative, and after hearing on due notice in accordance with rules and regulations adopted and promulgated pursuant to section 75-110, that the payment of any dividend by a jurisdictional utility will impair the financial condition of such company so that such utility cannot maintain its property in a safe operating condition and render adequate service to its ratepayers, the commission shall enter an order prohibiting the payment of such dividends until such time as such company has shown to the commission that the conditions upon which such order was based have ceased to exist.

(1) A jurisdictional utility shall not subject property used in its intrastate natural gas utility business in this state to an encumbrance for the purpose of securing the payment of any new indebtedness or replacement indebtedness in an amount exceeding one hundred million dollars attributable to this state unless first approved by the commission. Approval or disapproval by the commission shall be by formal written order, which shall be issued within forty-five days of the filing of the application.

(2) Upon the application of a jurisdictional utility for approval of and prior to the encumbrances, the commission may make such inquiry or investigation, hold such hearings, and examine such witnesses, books, papers, documents, or contracts as in its discretion it may deem necessary. If the commission finds that the proposed financing is reasonable and proper and in the public interest and will not be detrimental to the interests of the ratepayers affected thereby, the commission shall by written order grant its permission for the proposed financing.

(1) No reorganization or change of control of a jurisdictional utility shall take place without prior approval by the commission. The commission shall not approve any proposed reorganization or change of control if the commission finds, after public notice and public hearing, that the reorganization or change of control will adversely affect the utility's ability to serve its ratepayers.

(2) For purposes of this section, reorganization or change of control means any transaction which, regardless of the means by which it is accomplished, results in a change in the ownership of a majority of the voting capital stock of a jurisdictional utility and does not include a mortgage or pledge transaction entered into to secure a bona fide borrowing by the party granting the mortgage or making the pledge.

(1) The commission shall not disclose to or allow inspection by anyone, including, but not limited to, parties to a regulatory proceeding before the commission, any information of a jurisdictional utility that qualifies as a record which may be withheld from the public upon request of the party submitting such record if the information qualifies under subdivision (3) of section 84-712.05, unless the commission finds that disclosure is warranted after consideration of the following factors:

(a) Whether disclosure will significantly aid the commission in fulfilling its functions;

(b) The harm or benefit which disclosure will cause to the public interest;

(c) The harm which disclosure will cause to the utility; and

(d) Alternatives to disclosure that will serve the public interest and protect the utility.

(2) If the commission finds that disclosure is warranted pursuant to subsection (1) of this section, the commission shall give the utility notice before disclosing such information.

(1) The office of public advocate is created as a separate and independent division within the commission. The public advocate shall represent the interests of Nebraska citizens and all classes of jurisdictional utility ratepayers, other than high-volume ratepayers, in matters involving jurisdictional utilities and shall act as trial staff before the commission. In the exercise of his or her powers, the public advocate shall consider all relevant factors, including, but not limited to, the provision of safe, efficient, and reliable utility services at just and reasonable rates.

(2) Notwithstanding the provisions of section 75-105, the executive director of the commission, upon consultation with the members of the commission, shall appoint the public advocate. The public advocate shall serve a four-year term and shall be removed only for good cause. The executive director shall be responsible for reviewing the performance of the public advocate, for removing the public advocate in accordance with law, and for filling any vacancy in that position in the same manner as the original appointment.

(3) The public advocate shall be an attorney and shall have experience in consumer-related utility issues or in the operation, management, or regulation of utilities. No person owning stocks or bonds in a corporation subject in whole or in part to regulation by the commission or who has any pecuniary interest in such corporation shall be appointed as public advocate.

(1) The public advocate shall have the power to:

(a) Investigate the legality and reasonableness of rates, charges, and practices of jurisdictional utilities except for tariffs subject to section 66-1868;

(b) Petition for relief, request, initiate, and intervene in any proceeding before the commission concerning such utilities except for tariffs subject to section 66-1868;

(c) Represent and appear for ratepayers and the public in proceedings before the commission and in any negotiations or other measures to resolve disputes that give rise to such proceedings except for tariffs subject to section 66-1868;

(d) Represent and appear for ratepayers and the public in any negotiations or other measures to resolve disputes that give rise to proceedings before the commission and make and seek approval of agreements to settle such disputes except for tariffs subject to section 66-1868; and

(e) Make motions for rehearing or reconsideration, appeal, or seek judicial review of any order or decision of the commission regarding jurisdictional utilities except for tariffs subject to section 66-1868.

(2) The public advocate shall not advocate for or on behalf of any single individual, organization, or entity.

(3) The public advocate may enter into stipulations with other parties in any proceeding to balance the interests of those it represents with the interests of the jurisdictional utilities as a means of improving the quality of resulting decisions in a highly technical environment and minimizing the cost of regulation.

The office of the public advocate shall be located at the same location as the commission but shall be kept separate from the commission's other offices as provided by rules and regulations adopted and promulgated by the commission. The public advocate may hire or contract with attorneys, legal assistants, experts, consultants, secretaries, clerks, and such other staff necessary for the full and efficient discharge of the duties of the office as permitted by the budget of the public advocate as approved by the commission. The public advocate shall employ and supervise personnel as authorized by the budget approved by the commission. The employees of the public advocate shall not be supervised or directed by the commission. Funding for the office of public advocate shall be approved by the commission and collected through the assessment process as provided for in sections 66-1840 and 66-1841. The commission shall decide all matters of shared administrative and clerical personnel.

The public advocate and his or her employees or agents shall have free access to all files, records, and documents of the commission except:

(1) Personal information in confidential personnel records;

(2) Records which represent the work product of legal counsel of the commission, and records of confidential or privileged communications between the members of the commission and its legal counsel, when the records relate to a proceeding before the commission in which the public advocate is, or is appearing for, a party; and

(3) Records that are designated as confidential pursuant to commission rules and regulations, except as permitted by a nondisclosure agreement between a specified representative of the public advocate and the commission and the person who claims the records at issue are confidential.

The files, records, and documents of the public advocate shall be separately kept, maintained, and controlled by the public advocate.

In any proceeding before the commission in which the public advocate is a party or is appearing for a party, the public advocate shall be considered a party for purposes of the restrictions on ex parte communications set forth in sections 75-130.01 and 84-914.

The commission is hereby authorized to designate or appoint, from among its employees, examiners and referees to make investigations that are required of the commission by law. Such investigations shall be made and conducted as and in the manner and at the place directed by the commission. The examiners and referees shall report their findings and recommendations to the commission.

(1) The commission is hereby authorized to contract for professional services and expert assistance, including, but not limited to, the services of engineers, accountants, attorneys, and economists, to assist in investigations and appraisals.

(2) Such contracts shall be negotiated by the chairperson of the commission, the executive director, or the designee of the executive director. The commission shall consider all proposals by persons applying to perform such contracts and shall award the contracts.

(1) The provisions of this section apply only to general rate filings.

(2) Except as provided in subsection (3) of this section, a jurisdictional utility shall provide written notice to each city that will be affected by a proposed change in rates simultaneously with the filing with the commission of a request for a change in rates pursuant to the State Natural Gas Regulation Act. Such notice shall identify the cities that will be affected by the rate filing. The jurisdictional utility shall also file the information prescribed by the act and rules and regulations for rate changes adopted and promulgated by the commission with each city affected by such proposed rate change in electronic or digital format or, upon request, as paper documents.

(3) A jurisdictional utility may determine not to participate in negotiations with affected cities. Such decision, if indicated by written notice in the initial rate filing to the commission, shall relieve it from the duty of supplying notice to such cities as specified in subsection (2) of this section. The jurisdictional utility shall, not later than fifteen days after the initial filing, inform the commission by written notice of any decision not to participate in negotiations.

(4) Affected cities shall have a period of sixty days after the date of such filing within which to adopt a resolution evidencing their intent to negotiate an agreed rate change with the jurisdictional utility. A copy of the resolution adopted by each city under this section, notice of the rejection by a city of such a resolution, or written notice by an authorized officer of the city of the city's rejection of negotiations shall be provided to the commission and to the jurisdictional utility within seven days after its adoption.

(5) Any city may, at any time, by resolution adopted by its governing body and filed with the commission, indicate its rejection of participation in any future negotiations pertaining to any rate change whenever the same may be filed. Such resolution shall be treated as a duly filed notice of rejection of participation in negotiations for any rate filing by a jurisdictional utility at any time thereafter. The city filing a resolution pursuant to this subsection shall be bound thereby until such time as a resolution by the governing body of that city revoking its prior rejection of participation is filed with the commission.

(6) If the commission receives resolutions adopted prior to the expiration of the sixty-day period provided for in subsection (4) of this section evidencing the intent to negotiate from cities representing more than fifty percent of the ratepayers within the affected cities, the commission shall certify the case for negotiation between such cities and the jurisdictional utility and shall take no action upon the rate filing until the negotiation period and any stipulated extension has expired or an agreement on rates is submitted, whichever occurs first. The commission's certification shall be issued within eight business days after the earlier of (a) receipt of a copy of the resolutions from cities representing fifty percent or more of ratepayers within the affected cities or (b) the end of the sixty-day period provided for in subsection (4) of this section.

(7) When (a) the commission receives notice or has written documentary evidence on file from cities representing more than fifty percent of the ratepayers within the affected cities which notice or documents either expressly reject negotiations or reject such a resolution or (b) the commission receives written notice from the jurisdictional utility expressly rejecting negotiations, the rate change review by the commission shall proceed immediately from the date when the commission makes such a determination or receives such notice.

(8) When the sixty-day period provided for in subsection (4) of this section has expired without the receipt by the commission of resolutions from cities representing more than fifty percent of the ratepayers within the affected cities evidencing their intent to negotiate an agreed rate change review by the commission with the jurisdictional utility, the rate change shall proceed immediately from the date when the commission makes such a determination.

(9) If commission certification to pursue negotiations is received, cities adopting resolutions to negotiate and the jurisdictional utility shall enter into good faith negotiations over such proposed rate change.

(10)(a) The jurisdictional utility's filed rates may be placed into effect as interim rates, subject to refund, upon the adoption of final rates sixty days after the filing with the commission, if the commission certifies the rate filing for negotiations.

(b) If the rate filing is not certified by the commission for negotiations, the jurisdictional utility's filed rates may be placed into effect as interim rates, subject to refund, upon the adoption of final rates, ninety days after filing with the commission.

(11) Negotiations between the cities and the jurisdictional utility shall continue for a period not to exceed ninety days after the date of the rate filing, except that the parties may mutually agree to extend such period to a future date certain and shall provide such stipulation to the commission.

(12) Notwithstanding any other provision of law, any information exchanged between the jurisdictional utility and cities is not a public record within the meaning of sections 84-712 to 84-712.09 and its disclosure to the commission, its staff, the public advocate, or any other person or corporation, for any purpose, is expressly prohibited.

(13) If the cities and the jurisdictional utility reach agreement upon new rates, such agreement shall be reduced to writing, including proposed findings of fact, proposed conclusions of law, and a proposed commission order, and filed with the commission. If cities representing more than fifty percent of the ratepayers within the cities affected by the proposed rate change enter into an agreement upon new rates and such agreement is filed with and approved by the commission, such rates shall be effective and binding upon all of the jurisdictional utility's ratepayers affected by the rate filing.

(14) Any agreement filed with the commission shall be presumed in the public interest, and absent any clear evidence on the face of the agreement that it is contrary to the standards and provisions of the State Natural Gas Regulation Act, the agreement shall be approved by the commission within a reasonable time.

(15)(a) Except as provided in subdivision (c) of this subsection, if the negotiations fail to result in an agreement upon new rates, the rates requested in the rate filing shall become final and no longer subject to refund if the commission has not taken final action within two hundred ten days after the date of the expiration of the negotiation period or after the date upon which the jurisdictional utility and the cities file a written agreement that the negotiations have failed and that the rate change review by the commission should proceed as provided in subsection (7) of this section.

(b) Except as provided in subdivision (c) of this subsection, if the filing is not certified for negotiations, the rate requested in the rate filing shall become final and no longer subject to refund if the commission has not taken final action within one hundred eighty days after the date of the expiration of the sixty-day period provided for in subsection (4) of this section or the date that the commission receives notice or has accumulated written documentary evidence on file from cities representing more than fifty percent of the ratepayers within the affected cities, whichever is earlier, if such notice or documents either expressly reject negotiations or reject such a resolution.

(c) The commission may extend the deadlines specified in subdivision (a) or (b) of this subsection by a period not to exceed an additional sixty days upon a finding that additional time is necessary to properly fulfill its responsibilities in the proceeding.

(16) Within thirty days after such changes have been authorized by the commission or become effective, copies of all tariffs, schedules, and classifications, and all terms or conditions of service, except those determined to be confidential under rules and regulations adopted and promulgated by the commission, shall be available for public inspection in every office and facility open to the general public of the jurisdictional utility in this state.

(1) The Municipal Rate Negotiations Revolving Loan Fund is created. The fund shall be used to make loans to cities for rate negotiations under section 66-1838 or negotiations or litigation under section 66-1867, except that transfers may be made from the fund to the General Fund at the direction of the Legislature. Only one loan may be made for each rate filing made by a jurisdictional utility within the scope of each section. Money in the Municipal Natural Gas Regulation Revolving Loan Fund that is not necessary to finance rate proceedings initiated prior to May 31, 2003, shall be transferred to the Municipal Rate Negotiations Revolving Loan Fund on May 31, 2003, and repayments of loans or other obligations owing to the Municipal Natural Gas Regulation Revolving Loan Fund on May 31, 2003, shall be deposited in the Municipal Rate Negotiations Revolving Loan Fund upon receipt. Any obligations against or commitments of money from the Municipal Natural Gas Regulation Revolving Loan Fund on May 31, 2003, shall be obligations or commitments of the Municipal Rate Negotiations Revolving Loan Fund.

(2) The Municipal Rate Negotiations Revolving Loan Fund shall be administered by the commission which shall adopt and promulgate rules and regulations to carry out this section. The rules and regulations shall include:

(a) Loan application procedures and forms; and

(b) Fund-use monitoring and quarterly accounting of fund use.

(3) Applicants for a loan from the fund shall provide a budget statement which specifies the proposed use of the loan proceeds. Such proceeds may only be used for the costs and expenses incurred by the city to analyze rate filings for the purposes specified in section 66-1838 or 66-1867. Such costs and expenses may include the cost of rate consultants and attorneys and any other necessary costs related to the negotiation process or litigation under section 66-1867. Disbursements from the fund shall be audited by the commission. The affected jurisdictional utility may petition the commission to initiate a proceeding to determine whether the disbursements from the fund were expended by the negotiating cities consistent with the requirements of this section.

(4) The fund shall be audited as part of the regular audit of the commission's budget, and copies of the audit shall be available to all cities and any jurisdictional utility. Audits conducted pursuant to this section are public records.

(5) Any money in the fund available for investment shall be invested by the state investment officer pursuant to the Nebraska Capital Expansion Act and the Nebraska State Funds Investment Act. If the fund balance exceeds four hundred thousand dollars, the income on the money in the fund shall be credited to the permanent school fund until the balance of the Municipal Rate Negotiations Revolving Loan Fund falls below such amount.

(6) A city which receives a loan under this section shall be responsible to provide for the opportunity for all other cities engaged in the same negotiations with the same jurisdictional utility to participate in all negotiations. Such city shall not exclude any other city from the information or benefits accruing from the use of loan funds.

(7) Upon the conclusion of negotiations, regardless of the result, the loan shall be repaid by the jurisdictional utility to the commission within thirty days after the date upon which it is billed by the commission. The utility shall recover the amount paid on the loan by a special surcharge on ratepayers who are or will be affected by the rate increase request. These ratepayers may be billed on their monthly statements for a period not to exceed twelve months, and the surcharge may be shown as a separate item on the statements as a charge for rate negotiation expenses.

(1) Whenever, in order to carry out the duties imposed upon it by law, the commission, in a proceeding upon its own motion, on complaint, or upon an application to it, including rate filings, deems it necessary to investigate any jurisdictional utility or make appraisals of the property of any jurisdictional utility, such utility, in case the expenses reasonably attributable to such investigation or appraisal exceed the sum of one hundred dollars, including both direct and indirect expenses incurred by the commission or its staff, shall pay such expenses which shall be assessed against such utility by the commission. Such expenses shall be assessed beginning on the date that the proceeding is filed or beginning three business days after the commission gives the utility notice of the assessment by United States mail, whichever is later. The commission shall give such utility notice and opportunity for a hearing in accordance with rules and regulations adopted and promulgated pursuant to section 75-110. At such hearing, the utility may be heard as to the necessity of such investigation or appraisal and may show cause, if any, why such investigation or appraisal should not be made or why the costs thereof should not be assessed against such utility. The finding of the commission as to the necessity of the investigation or appraisal and the assessment of the expenses thereof shall be conclusive, except that no such utility shall be liable for payment of any such expenses incurred by the commission in connection with any proceeding before or within the jurisdiction of any federal regulatory body.

(2) The commission shall ascertain the expenses of any such investigation or appraisal and by order assess such expenses against the jurisdictional utility investigated or whose property is appraised in such proceeding and shall render a bill therefor, by United States mail, to the jurisdictional utility, either at the conclusion of the investigation or appraisal or from time to time during such investigation or appraisal. Such bill shall constitute notice of such assessment and demand of payment thereof. Upon a bill rendered to such utility, within fifteen days after the mailing thereof, such utility shall pay to the commission the amount of the assessment for which it is billed. Such payment when made shall be remitted by the commission to the State Treasurer for credit to the Public Service Commission Regulation Fund for the use of the commission. The total amount, in any one fiscal year, for which any utility shall be assessed under this section shall not exceed the following: (a) For a jurisdictional utility that has not filed an annual report with the commission as provided in the State Natural Gas Regulation Act prior to the beginning of the commission's fiscal year, actual expenses, including direct and indirect expenses, incurred by the commission; and (b) for any other jurisdictional utility, one percent of the utility's gross operating jurisdictional revenue less gas cost derived from intrastate natural gas utility business as reflected in the last annual report filed with the commission pursuant to the act prior to the beginning of the commission's fiscal year. The commission may render bills in one fiscal year for costs incurred within a previous fiscal year.

(3) The commission, in accordance with the procedures prescribed by subsection (2) of this section, may assess against an entity, other than an individual residential ratepayer or individual agricultural ratepayer, that is not subject to assessment pursuant to subsection (1) of this section actual expenses of any services extended, filings processed, or actions certified by the commission for the entity.

(1) The commission shall determine, within thirty days after each quarter-year for each such quarter-year, the total amount of its expenditures during such period of time. The total amount shall include the salaries of members and employees and all other lawful expenditures of the commission, including all expenditures in connection with investigations or appraisals made under the State Natural Gas Regulation Act, except that there shall not be included in such total amount of expenditures for the purpose of this section the expenditures during such period of time which are otherwise provided for by fees and assessments pursuant to the act.

(2) From the amount determined under subsection (1) of this section, the commission shall deduct (a) all amounts collected under section 66-1840 during such period of time and (b) all other funds collected with regard to jurisdictional utilities.

(3) To the remainder, after making the deductions under subsection (2) of this section, the commission shall add such amount as in its judgment may be required to satisfy any deficiency in the prior assessment period's assessment and to provide for anticipated increases in necessary expenditures for the current assessment period.

(4) The amount determined under subsections (1) through (3) of this section shall be assessed by the commission against all jurisdictional utilities and shall not exceed, during any fiscal year, the greater of one hundred dollars or each utility's proportionate share of the total amount determined under this section based upon meters served by each utility as a proportion of all meters of jurisdictional utilities. Such assessment shall be paid to the commission within fifteen days after the notice of assessment has been mailed to such utilities, which notice of assessment shall constitute demand of payment thereof.

(5) The commission shall remit all money received by or for it for the assessment imposed under this section to the State Treasurer for credit to the Public Service Commission Regulation Fund.

(6)(a) Until June 1, 2007, a jurisdictional utility may recover the amount of any assessments or charges paid to the commission pursuant to this section and section 66-1840 through a special surcharge on ratepayers which may be billed on the monthly statements for up to a twelve-month period immediately following their payment by the jurisdictional utility. The surcharge shall be shown on the statements as a charge for state regulatory assessments. The commission shall permit the utility to include in such surcharge interest upon the amount of the charges and assessments paid to the commission prior to their recovery from ratepayers. Such interest shall be at a rate not to exceed the rate established by section 45-103.

(b) On and after June 1, 2007, the commission by general rule and regulation shall authorize the recovery of the amount of any assessments or charges paid to the commission pursuant to this section and section 66-1840 in a general rate filing or through a special surcharge which may be billed on the monthly statements for up to a twelve-month period immediately following their payment by the jurisdictional utility.

The Public Service Commission Regulation Fund is created. Transfers may be made from the Public Service Commission Regulation Fund to the General Fund at the direction of the Legislature. The commission shall remit all money received by or for it in payment of the fees or assessments imposed by the State Natural Gas Regulation Act to the State Treasurer for credit to the fund. Any money in the fund available for investment shall be invested by the state investment officer pursuant to the Nebraska Capital Expansion Act and the Nebraska State Funds Investment Act.

If any jurisdictional utility against which an assessment has been made pursuant to the State Natural Gas Regulation Act, within fifteen days after the notice of such assessment, (1) neglects or refuses to pay the same or (2) fails to file objections to the assessment with the commission as provided in section 66-1844, the commission shall transmit to the State Treasurer a certified copy of the notice of assessment, together with notice of neglect or refusal to pay the assessment, and on the same day the commission shall mail by registered mail to the utility against which the assessment has been made a copy of the notice which it has transmitted to the State Treasurer. If any such utility fails to pay such assessment to the State Treasurer within ten days after receipt of such notice and certified copy of such assessment, the assessment shall bear interest at the rate of fifteen percent per annum from and after the date on which the copy of the notice was mailed by registered mail to such utility.

(1) Within fifteen days after the date of the mailing of any notice of assessment under sections 66-1840 and 66-1841, the jurisdictional utility against which such assessment has been made may file with the commission objections setting out in detail the ground upon which such objector regards such assessment to be excessive, erroneous, unlawful, or invalid. The commission, after notice to the objector, shall hold a hearing in accordance with rules and regulations adopted and promulgated pursuant to section 75-110. The commission shall determine if the assessment or any part of the assessment is excessive, erroneous, unlawful, or invalid and shall render an order upholding, invalidating, or amending the assessment. An amended assessment shall have in all respects the same force and effect as though it were an original assessment.

(2) If any assessment against which objections have been filed is not paid within ten days after service of an order finding that such objections have been overruled and disallowed by the commission, the commission shall give notice of such delinquency to the State Treasurer and to the objector in the manner provided for in the State Natural Gas Regulation Act. The State Treasurer shall then collect the amount of such assessment. If an amended assessment is not paid within ten days after service of the order of the commission, the commission shall notify the State Treasurer and the objector as in the case of delinquency in the payment of an original assessment. The State Treasurer shall then collect the amount of such assessment as provided in the case of an original assessment.

Every jurisdictional utility against which an assessment is made shall pay the amount thereof and, after such payment, may under the conditions in the State Natural Gas Regulation Act, at any time within one year from the date the payment was made, sue the state in an action at law to recover the amount paid with legal interest thereon from the date of payment, upon the ground that the assessment was excessive, erroneous, unlawful, or invalid in whole or in part. If it is finally determined in such action that any part of the assessment, for which payment was made, was excessive, erroneous, unlawful, or invalid, the State Treasurer shall make a refund to the claimant as directed by the court.

(1) No action for recovery of any amount paid pursuant to the State Natural Gas Regulation Act shall be maintained in any court unless objections have been filed with the commission as provided in section 66-1844. In any action for recovery of any payments made under the act, the claimant shall be entitled to raise every relevant issue of law, but the commission's findings of fact made pursuant to the act shall be prima facie evidence of the facts therein stated.

(2) The following shall be deemed to be findings of fact of the commission within the meaning of the act: (a) Determinations of fact expressed in notices of assessments given pursuant to the act; and (b) determinations of fact set out in those minutes of the commission which record the action of the commission in connection with making the assessments and passing upon objections thereto.

Natural gas utilities owned and operated by a city or a metropolitan utilities district shall establish rates and conditions of service for all residential ratepayers of each such utility in a nondiscriminatory manner.

For purposes of this section and section 66-1849:

(1) Aggregator means a person who combines retail end users into a group and arranges for the acquisition of competitive natural gas services without taking title to those services; and

(2)(a) Competitive natural gas provider means a person who takes title to natural gas and sells it for consumption by a retail end user. Competitive natural gas provider includes an affiliate of a natural gas public utility.

(b) Competitive natural gas provider does not include the following:

(i) A jurisdictional utility;

(ii) A city-owned or operated natural gas utility or metropolitan utilities district in areas in which it provides natural gas service through pipes it owns; or

(iii) A natural gas public utility that is not subject to the act as provided in section 66-1803 in areas in which it is providing natural gas service in accordance with section 66-1803.

(1) The commission shall certify all competitive natural gas providers and aggregators providing natural gas services. In an application for certification, a competitive natural gas provider or aggregator shall reasonably demonstrate managerial, technical, and financial capability sufficient to obtain and deliver the services such provider or aggregator proposes to offer. The commission may establish reasonable conditions or restrictions on the certificate at the time of issuance. The commission shall adopt and promulgate rules and regulations to establish specific criteria for certification. The commission shall make a determination on an application for certification within ninety days after its submission unless the commission determines that additional time is necessary to consider the application. If the commission determines that additional time is necessary to consider the application, the commission may extend the time for making a determination for an additional sixty days.

(2) The commission may resolve disputes involving the provision of natural gas services by a competitive natural gas provider or aggregator.

(3) The commission shall allocate the costs and expenses reasonably attributable to certification and dispute resolution as authorized in this section to persons identified as parties to such proceeding who are engaged in or who seek to engage in providing natural gas services or other persons identified as participants in such proceeding. The funds received for the costs and expenses of certification and dispute resolution shall be remitted to the State Treasurer for credit to the Public Service Commission Regulation Fund.

(1) The State Natural Gas Regulation Act shall not be enforced retroactively before May 31, 2003. A rate filing made pursuant to the provisions of the Municipal Natural Gas Regulation Act prior to such date shall be governed by the act by its terms as in effect on the date of the filing. The enactment into law of the State Natural Gas Regulation Act shall not have the effect of releasing or waiving any right of action by the state, any body corporate and politic, municipal corporation, person, or corporation, pending on May 31, 2003, for any right which may have arisen or accrued under the Municipal Natural Gas Regulation Act.

(2) The rates, terms and conditions of service, and rate areas of a jurisdictional utility in effect on or before May 31, 2003, shall remain in effect after May 31, 2003, and shall be treated as if approved and adopted by the commission pursuant to the State Natural Gas Regulation Act.

(3) The rate areas established pursuant to the Municipal Natural Gas Regulation Act and in effect on May 31, 2003, shall be the initial rate areas in effect under the State Natural Gas Regulation Act. Each jurisdictional utility shall file with the commission a map showing the boundaries of such areas and intervening and adjacent rural territories served within such rate areas.

(4) Except as provided in subsection (5) of this section, following the filing of maps pursuant to subsection (3) of this section, a jurisdictional utility may file with the commission a revised map or maps of any affected rate areas reflecting changes in the boundaries of one or more of the initially filed rate areas and such changes shall become effective upon filing. The commission may, upon its own initiative or upon complaint, review such rate area boundaries and, following notice and hearing, reject or modify proposed changes upon the basis that the proposed changes in boundaries are unduly preferential, unjustly discriminatory, or not just and reasonable.

(5) A rate area containing a city of the primary class shall not be changed to include any other city until after June 1, 2007.

(6) The commission may waive application of the definition of high-volume ratepayer for all ratepayers (a) who prior to April 16, 2004, obtained natural gas service from a jurisdictional utility pursuant to subsection (3) of former section 19-4604, as such section existed prior to May 24, 2003, and (b) whose current consumption of natural gas would qualify such ratepayers to receive natural gas service pursuant to such former section if the section had not been repealed. All ratepayers meeting such criteria may be treated as high-volume ratepayers pursuant to the State Natural Gas Regulation Act. The authority granted pursuant to this subsection and any such waiver shall expire on June 1, 2007.

(1) Notwithstanding any other provisions in the State Natural Gas Regulation Act, a jurisdictional utility may file with the commission rates and one or more rate schedules and other charges, and rules and regulations pertaining thereto, that enable the utility to provide service to ratepayers under customer choice and other programs offered by a utility to unbundle one or more elements of the service provided by the utility.

(2) The commission shall not eliminate or modify the terms of any customer choice or other unbundling programs in existence on May 31, 2003, or as thereafter modified by a filing made by the jurisdictional utility, except as permitted by the act after complaint or the commission's own motion and hearing. In any rate determination made under the act, the commission shall not penalize the utility for any action prudently taken or decision prudently made under its approved bundling program, by imputing revenue at maximum rates or otherwise.

(3) The commission may not modify the provisions of a program under this section except upon complaint or the commission's own motion, wherein the commission finds, after hearing, that one or more aspects of the program are unduly preferential, unjustly discriminatory, or not just and reasonable.

(1) Except as otherwise expressly authorized in the State Natural Gas Regulation Act, no person, public or private, shall extend duplicative or redundant natural gas mains or other natural gas services into any area which has existing natural gas utility infrastructure or where a contract has been entered into for the placement of natural gas utility infrastructure.

(2) The prohibition in subsection (1) of this section shall not apply in any area in which two or more jurisdictional utilities share authority to provide natural gas within the same territory under franchises issued by the same city.

(3) The prohibition in subsection (1) of this section shall not apply to the extension by a jurisdictional utility of a transmission line connecting to distribution facilities owned or operated by a jurisdictional utility, a city, or a metropolitan utilities district or to serve city-owned electric generating facilities located within the boundaries of a city within which the jurisdictional utility extending the transmission line provides natural gas service to customers.

(4)(a) The prohibition in subsection (1) of this section shall not apply to the extension by a metropolitan utilities district of a transmission line connecting to distribution facilities owned or operated by such metropolitan utilities district.

(b) The extension by a metropolitan utilities district of a transmission line connecting to distribution facilities owned or operated by such metropolitan utilities district shall not constitute an enlargement or expansion of its natural gas service area and shall not be considered part of its natural gas service area.

(c) The extension of a transmission line by a jurisdictional utility as provided in subsection (3) of this section shall not constitute an enlargement or expansion of the jurisdictional utility's natural gas service area and shall not be considered part of its natural gas service area if the transmission line makes its connection to distribution facilities in a county in which the natural gas service area or a portion of the natural gas service area of a metropolitan utilities district is located.

(5) The prohibition in subsection (1) of this section shall not apply to the extension by a city that owns or operates a natural gas utility of a transmission line that connects to its own distribution facilities.

(6) For purposes of this section, a transmission line means a pipeline, other than a gathering pipeline, distribution pipeline, or service line, that transports natural gas.

(7) Nothing in this section shall be construed to authorize a jurisdictional utility to extend a transmission line to a high-volume ratepayer with an existing source and adequate supply of natural gas that is located outside the area in which that jurisdictional utility has existing natural gas utility infrastructure.

(1) Except as provided in subsection (2) of this section, no jurisdictional utility shall transact business in Nebraska until it has obtained a certificate from the commission that public convenience will be promoted by the transaction of the business and permitting the applicants to transact the business of a jurisdictional utility in this state.

(2) A jurisdictional utility transacting business in this state shall be issued a certificate of convenience based upon its natural gas service as of May 31, 2003.

(3) Every jurisdictional utility shall be required to furnish reasonably adequate and sufficient service and facilities for the use of any and all products or services rendered, furnished, supplied, or produced by such utility.

(1) The commission shall allow jurisdictional utilities to implement and thereafter modify gas supply cost adjustment rate schedules that reflect increases or decreases in the cost of the utility's gas supply such as (a) federally regulated wholesale rates for energy delivered through interstate facilities, (b) direct costs for natural gas delivered, or (c) costs for fuel used in the manufacture of gas. Such costs may, in the discretion of the commission, include costs related to gas price volatility risk management activities, the costs of financial instruments purchased to hedge against gas price volatility, if prudent, and other relevant factors. Gas supply cost adjustment rate schedules in effect on May 31, 2003, shall continue in effect until changed pursuant to the provisions of the State Natural Gas Regulation Act. In each such proceeding the burden of proof shall be upon the utility.

(2) Unless the commission otherwise orders and except as otherwise provided in this section, no change shall be made by any jurisdictional utility in any purchased gas adjustment schedule, except after thirty days' notice to the commission and to the public as provided in this section. Such notice shall be given by filing with the commission and keeping open for public inspection new schedules or supplements stating plainly the change or changes to be made in the schedule or schedules then in force, and the time when the change or changes will go into effect, and by publication in a newspaper of general circulation of notice to ratepayers affected by such change. The utility may propose and the commission, for good cause shown, may allow changes without requiring the thirty days' notice, by an order specifying the changes to be made and the time when they shall take effect and the manner in which they shall be filed and published. When any change is proposed in any rate or other charge to ratepayers, such proposed change shall be plainly indicated on the new schedule filed with the commission.

(3) The commission may modify a jurisdictional utility's gas supply cost adjustment rate schedule under procedures specified in the act for setting rates by order of the commission.

(4) Once annually, the commission may initiate public hearings, upon complaint, to determine whether the gas supply cost adjustment schedule of a jurisdictional utility reflects the costs of the utility's gas supply and whether such costs were prudently incurred and to reconcile any amounts collected from ratepayers with the actual costs of gas supplies incurred by the utility.

(5) Any refund, including interest thereon, if any, received by the jurisdictional utility with respect to services purchased under Federal Energy Regulatory Commission natural gas tariff related to increased rates paid by the utility subject to refund, and applicable to natural gas services purchased for service to Nebraska ratepayers, shall be passed along to presently served Nebraska ratepayers by an appropriate adjustment shown as a credit on subsequent bills during a period selected by the utility, not to exceed twelve months, or by a cash refund at the option of the utility. The utility shall not be required to return such refunds to ratepayers served at competitively set or negotiated rates, or under alternative rate mechanisms, when the ratepayer is paying less than the full rate determined pursuant to the gas supply cost adjustment rate schedule, or under a customer choice or unbundling program.

(6) The provisions of this section shall not be construed to modify or otherwise restrict the Public Service Commission's authority to establish alternative rate mechanisms as authorized by the act, when such mechanisms modify a utility's recovery of gas supply costs.

The commission may authorize, consistent with general regulatory principles, including, but not limited to (1) banded rates with a minimum and maximum rate that allows the jurisdictional utility to offer ratepayers rates within the rate band for the purpose of attracting additional natural gas service demand or to retain such demand, (2) mechanisms for the determination of rates by negotiation, and (3) customer choice and other programs to be offered by a natural gas public utility to unbundle one or more elements of the service provided by the utility.

A jurisdictional utility shall not be required to obtain prior approval from the commission to begin the construction of any new plant, equipment, property, or facility that the utility determines to be necessary to provide adequate and reliable service to ratepayers.

The rights and remedies given by the State Natural Gas Regulation Act shall be construed as cumulative of all other laws in force in this state relating to jurisdictional utilities and shall not repeal any other remedies or rights now existing in this state for the enforcement of the duties and obligations of jurisdictional utilities or the rights of the commission to regulate and control the same except where inconsistent with the act.

Whenever any city is furnished natural gas pursuant to a franchise agreement with a jurisdictional utility, a metropolitan utilities district shall not solicit such city to enter into a franchise agreement or promote discontinuance of natural gas service with the utility unless a specific invitation to submit a proposal on such a franchise has been formally presented to the board of directors of the metropolitan utilities district. For purposes of this section, a specific invitation to submit a proposal means a resolution adopted by the governing body of the city.

Whenever a specific invitation to submit a proposal is received by the board of directors of a metropolitan utilities district, the invitation will be considered by the board at its next regularly scheduled monthly meeting.

Sections 66-1858 to 66-1864 shall be applicable to a jurisdictional utility only when it is operating in a county in which there is located the natural gas service area, or portion of the natural gas service area, of a metropolitan utilities district and only with regard to matters arising within any such county. Within the limits of a municipal county, the provisions of sections 66-1858 to 66-1864 shall be applicable to the extent and in the manner provided by the Legislature as required by section 13-2802.

No jurisdictional utility or metropolitan utilities district may extend or enlarge its natural gas service area or extend or enlarge its natural gas mains or natural gas services unless it is in the public interest to do so. In determining whether or not an extension or enlargement is in the public interest, the district or the utility shall consider the following:

(1) The economic feasibility of the extension or enlargement;

(2) The impact the enlargement will have on the existing and future natural gas ratepayers of the metropolitan utilities district or the jurisdictional utility;

(3) Whether the extension or enlargement contributes to the orderly development of natural gas utility infrastructure;

(4) Whether the extension or enlargement will result in duplicative or redundant natural gas utility infrastructure; and

(5) Whether the extension or enlargement is applied in a nondiscriminatory manner.

In determining whether an enlargement or extension of a natural gas service area, natural gas mains, or natural gas services is in the public interest pursuant to section 66-1860, the following shall constitute rebuttable presumptions:

(1) Any enlargement or extension by a metropolitan utilities district within a city of the metropolitan class or its extraterritorial zoning jurisdiction is in the public interest;

(2) Any enlargement or extension by a jurisdictional utility within a city other than a city of the metropolitan class in which it serves natural gas on a franchise basis or its extraterritorial zoning jurisdiction is in the public interest; and

(3) Any enlargement or extension by a metropolitan utilities district within its statutory boundary or within a city other than a city of the metropolitan or primary class in which it serves natural gas on a franchise basis or its extraterritorial zoning jurisdiction is in the public interest.

Any enlargement or extension by a metropolitan utilities district within the boundaries of a city of the metropolitan class involving the exercise of the power of eminent domain pursuant to subsection (2) of section 14-2116 shall, by reason of such exercise, be conclusively determined to be in the public interest.

A metropolitan utilities district or jurisdictional utility shall not extend duplicative or redundant interior natural gas mains or natural gas services into a subdivision, whether residential, commercial, or industrial, which has existing natural gas utility infrastructure or which has contracted for natural gas utility infrastructure with another utility.

(1) Except as provided in subsections (2) and (3) of this section, no jurisdictional utility or metropolitan utilities district proposing to extend or enlarge its natural gas service area or extend or enlarge its natural gas mains or natural gas services after July 14, 2006, shall undertake or pursue such extension or enlargement until the proposal has been submitted to the commission for its determination that the proposed extension or enlargement is in the public interest. Any proposal for extension or enlargement shall be filed with the commission, and the commission shall promptly make such application public in such manner as the commission deems appropriate. The commission shall schedule the matter for hearing and determination in the county where the extension or enlargement is proposed, and the matter shall be subject to the applicable procedures provided in the State Natural Gas Regulation Act and sections 75-112, 75-129, and 75-134 to 75-136. In making a determination whether a proposed extension or enlargement is in the public interest, the commission shall consider the factors set forth in sections 66-1860 and 66-1861. Ratepayers of the jurisdictional utility or the metropolitan utilities district shall have the right to appear and present testimony before the commission on any matter submitted to the commission under sections 66-1858 to 66-1864 and shall have such testimony considered by the commission in arriving at its determination.

(2) If any metropolitan utilities district proposes to extend or enlarge its system within the corporate boundaries of the city of the metropolitan class it serves or within the boundaries of the extraterritorial zoning jurisdiction of such city, the metropolitan utilities district may pursue such extension or enlargement without the need for commission approval or the requirement to file and request permission to pursue such extension or enlargement.

(3) If no person or entity has filed with the commission a protest alleging that the proposed extension or enlargement is not in the public interest within fifteen business days after the date upon which the application was made public, the enlargement or extension shall be conclusively presumed to be in the public interest and the jurisdictional utility or metropolitan utilities district may proceed with the extension or enlargement without further commission action.

All books, records, vouchers, papers, contracts, engineering designs, and any other data of the metropolitan utilities district relating to the public interest of an extension or enlargement of natural gas mains or natural gas services or relating to natural gas service areas, whether in written or electronic form, shall be open and made available for public inspection, investigation, comment, or protest upon reasonable request during business hours, except that such books, records, vouchers, papers, contracts, designs, and other data shall be subject to section 84-712.05. Any books, records, vouchers, papers, contracts, designs, or other data not made available to the metropolitan utilities district or jurisdictional utility with regard to a proceeding before the commission regarding matters arising pursuant to sections 66-1858 to 66-1864 shall not be considered by the commission in determining whether an enlargement or extension is in the public interest.

(1) Beginning January 1, 2010, a jurisdictional utility may file an application and proposed rate schedules with the commission to establish or change infrastructure system replacement cost recovery charge rate schedules that will allow for the adjustment of the jurisdictional utility's rates and charges to provide for the recovery of costs for eligible infrastructure system replacements. The commission shall not approve any infrastructure system replacement cost recovery charge rate schedules if such schedules would produce total annualized infrastructure system replacement cost recovery charge revenue below the lesser of one million dollars or one-half percent of the jurisdictional utility's base revenue level approved by the commission in the jurisdictional utility's most recent general rate proceeding. The commission shall not approve any infrastructure system replacement cost recovery charge rate schedules if such schedules would produce total annualized infrastructure system replacement cost recovery charge revenue exceeding ten percent of the jurisdictional utility's base revenue level approved by the commission in the jurisdictional utility's most recent general rate proceeding. Any infrastructure system replacement cost recovery charge rate schedules and any future changes thereto shall be calculated and implemented in accordance with the State Natural Gas Regulation Act. Infrastructure system replacement cost recovery charge revenue shall be subject to a refund based upon a finding and order of the commission to the extent provided in subsections (6) and (8) of section 66-1866 or as approved by the affected cities to the extent provided in subsection (6) and subdivision (7)(c) of section 66-1867.

(2) The commission shall not approve any infrastructure system replacement cost recovery charge rate schedules for any jurisdictional utility that has not had a general rate proceeding decided or dismissed by issuance of a commission order within the sixty months immediately preceding the application by the jurisdictional utility for an infrastructure system replacement cost recovery charge.

(3) A jurisdictional utility shall not collect an infrastructure system replacement cost recovery charge rate for a period exceeding sixty months after its initial approval unless within such sixty-month period the jurisdictional utility has filed for or is the subject of a new general rate proceeding, except that the infrastructure system replacement cost recovery charge rate may be collected until the effective date of new rate schedules established as a result of the new general rate proceeding or until the general rate proceeding is otherwise decided or dismissed by issuance of a commission order without new rates being established.

(1) This section applies to applications for an infrastructure system replacement cost recovery charge by a jurisdictional utility whose last general rate filing was not the subject of negotiations with affected cities as provided for in section 66-1838.

(2) When a jurisdictional utility governed by this section files an application with the commission seeking to establish or change any infrastructure system replacement cost recovery charge rate schedules, it shall submit to the commission with the application proposed infrastructure system replacement cost recovery charge rate schedules and supporting documentation regarding the calculation of the proposed infrastructure system replacement cost recovery charge rate schedules, including (a) a list of eligible projects, (b) a description of the projects, (c) the location of the projects, (d) the purpose of the projects, (e) the dates construction began and ended, (f) the total expenses for each project at completion, and (g) the extent to which such expenses are eligible for inclusion in the calculation of the infrastructure system replacement cost recovery charge.

(3)(a) When an application, along with any associated proposed rate schedules and documentation, is filed pursuant to subsection (2) of this section, the public advocate shall conduct an examination of the proposed infrastructure system replacement cost recovery charge rate schedules.

(b) The public advocate shall cause an examination to be made of information regarding the jurisdictional utility to confirm that the underlying costs are in accordance with the State Natural Gas Regulation Act and to confirm proper calculation of the proposed infrastructure system replacement cost recovery charge rates and rate schedules. The commission shall require a report regarding such examination to be prepared and filed with the commission not later than sixty days after the application is filed. No other revenue requirement or ratemaking issue shall be examined in consideration of the application or associated proposed rate schedules filed pursuant to the act unless the consideration of such affects the determination of the validity of the proposed infrastructure system replacement cost recovery charge rate schedules.

(c) The commission shall hold a hearing on the application and any associated rate schedules at which the public advocate shall present his or her report and shall act as trial staff before the commission. The commission shall issue an order to become effective not later than one hundred twenty days after the application is filed, except that the commission may, for good cause, extend such period for an additional thirty days.

(d) If the commission finds that an application complies with the requirements of the act, the commission shall enter an order authorizing the jurisdictional utility to impose an infrastructure system replacement cost recovery charge rate that is sufficient to recover appropriate pretax revenue, as determined by the commission pursuant to the act.

(4) A jurisdictional utility may apply for a change in any infrastructure system replacement cost recovery charge rate schedules approved pursuant to this section no more than once in any twelve-month period. Any such application for a change shall be pursued in the manner provided for in this section.

(5) In determining the appropriate pretax revenue, the commission shall consider the following factors:

(a) The net original cost of eligible infrastructure system replacements. For purposes of this section, the net original cost means the original cost of eligible infrastructure system replacements minus associated retirements of existing infrastructure;

(b) The accumulated deferred income taxes associated with the eligible infrastructure system replacements;

(c) The accumulated depreciation associated with the eligible infrastructure system replacements;

(d) The state, federal, and local income tax or excise tax rates at the time of such determination;

(e) The jurisdictional utility's actual regulatory capital structure as determined during the most recent general rate proceeding of the jurisdictional utility;

(f) The actual cost rates for the jurisdictional utility's debt and preferred stock as determined during the most recent general rate proceeding of the jurisdictional utility;

(g) The jurisdictional utility's cost of common equity as determined during the most recent general rate proceeding of the jurisdictional utility; and

(h) The depreciation rates applicable to the eligible infrastructure system replacements at the time of the most recent general rate proceeding of the jurisdictional utility.

(6)(a) The monthly infrastructure system replacement cost recovery charge rate shall be allocated among the jurisdictional utility's classes of customers in the same manner as costs for the same type of facilities were allocated among classes of customers in the jurisdictional utility's most recent general rate proceeding. An infrastructure system replacement cost recovery charge rate shall be assessed to customers as a monthly fixed charge and not based on volumetric consumption. Such monthly charge shall not increase more than fifty cents per residential customer over the base rates in effect at the time of the initial filing for any infrastructure system replacement cost recovery charge rate schedules. Thereafter, each subsequent filing shall not increase the monthly charge by more than fifty cents per residential customer over that charge in existence at the time of the most recent application for any infrastructure system replacement cost recovery charge rate schedules.

(b) At the end of each twelve-month period during which the infrastructure system replacement cost recovery charge rate schedules are in effect, the jurisdictional utility shall reconcile the differences between the revenue resulting from the infrastructure system replacement cost recovery charge and the appropriate pretax revenue as found by the commission for that period and shall submit the reconciliation and any proposed infrastructure system replacement cost recovery charge rate schedules adjustment to the commission for approval to recover or refund the difference, as appropriate, through adjustments of the infrastructure system replacement cost recovery charge rate.

(7)(a) A jurisdictional utility that has implemented any infrastructure system replacement cost recovery charge rate schedules pursuant to the act shall cease to collect such charges when new base rates and charges become effective for the jurisdictional utility following a commission order establishing customer rates in a general rate proceeding.

(b) In any subsequent general rate proceeding involving a jurisdictional utility which is collecting charges pursuant to any infrastructure system replacement cost recovery charge rate schedules, the commission shall reconcile any previously unreconciled infrastructure system replacement cost recovery charge revenue as necessary to ensure that the revenue matches as closely as possible to the appropriate pretax revenue as found by the commission for that period.

(8) In the event the commission disallows, during a subsequent general rate proceeding, recovery of costs associated with eligible infrastructure system replacements previously included in any infrastructure system replacement cost recovery charge rate schedules, the commission shall order the jurisdictional utility to make such rate adjustments as necessary to recognize and account for any such overcollections.

(9) Nothing in this section shall be construed to limit the authority of the commission to review and consider infrastructure system replacement costs along with other costs during any general rate proceeding of any jurisdictional utility.

(1) This section applies to applications for an infrastructure system replacement cost recovery charge by a jurisdictional utility whose last general rate filing was the subject of negotiations with affected cities as provided for in section 66-1838.

(2) When a jurisdictional utility governed by this section files an application with the commission seeking to establish or change any infrastructure system replacement cost recovery charge rate schedules, it shall submit proposed infrastructure system replacement cost recovery charge rate schedules and supporting documentation regarding the calculation of the proposed infrastructure system replacement cost recovery charge rate schedules with the application and shall provide written notice to each city that will be affected by the proposed infrastructure system replacement cost recovery charge rates simultaneously with the filing with the commission. Such notice shall identify the cities that will be affected by the filing. The jurisdictional utility shall file copies of the notice with the commission and shall file with the affected cities the information prescribed by this section with each city affected by the proposed infrastructure system replacement cost recovery charge in electronic or digital form or, upon request, in paper form.

(3) The jurisdictional utility shall file with the cities and the commission the infrastructure system replacement cost recovery charge rate schedules and supporting documentation regarding the calculation of the proposed infrastructure system replacement cost recovery charge rate schedules, including (a) a list of eligible projects, (b) a description of the projects, (c) the location of the projects, (d) the purpose of the projects, (e) the dates construction began and ended, (f) the total expenses for each project at completion, and (g) the extent to which such expenses are eligible for inclusion in the calculation of the infrastructure system replacement cost recovery charge rate.

(4)(a) Affected cities shall have a period of thirty days after the date of such filing within which to adopt a resolution evidencing their intent to negotiate an infrastructure system replacement cost recovery charge rate with the jurisdictional utility. A copy of the resolution in support of negotiations adopted by each city under this section or a copy of the resolution of the rejection of the offer of negotiations shall be provided to the commission and the jurisdictional utility within seven days after its adoption.

(b) If the commission receives resolutions adopted prior to the expiration of the thirty-day period provided for in subdivision (a) of this subsection evidencing the intent from cities representing more than fifty percent of the ratepayers within the affected cities to negotiate with the jurisdictional utility an infrastructure system replacement cost recovery charge rate, the commission shall certify the case for negotiation between such cities and the jurisdictional utility and shall take no action upon the application and filings regarding such charge until the negotiation period and any stipulated extension has expired or an agreement on rates is submitted, whichever occurs first.

(c) If the commission receives copies of resolutions from cities representing more than fifty percent of the ratepayers within the affected cities which expressly reject negotiations, the infrastructure system replacement cost recovery charge rate review shall proceed immediately from the date when the commission makes such a determination in the manner provided for in section 66-1866.

(d) If commission certification to pursue negotiations is entered, the cities that have adopted resolutions to negotiate and the jurisdictional utility shall enter into good faith negotiations over the proposed infrastructure system replacement cost recovery charge rate.

(e) Negotiations between the cities and the jurisdictional utility shall continue for a period not to exceed thirty days after the date of the commission's certification to pursue negotiations, except that the parties may mutually agree to extend such period to a future date certain and shall provide such stipulation to the commission.

(f) If the cities and the jurisdictional utility reach agreement upon the proposed infrastructure system replacement cost recovery charge rate schedules, such agreement shall be put into writing and filed with the commission. If cities representing more than fifty percent of the ratepayers within the cities affected by the proposed infrastructure system replacement cost recovery charge rate schedules enter into an agreement upon such charges and the agreement is filed with and approved by the commission, such infrastructure system replacement cost recovery charge rate schedules shall be effective and binding upon all of the jurisdictional utility's ratepayers within the affected cities. The commission shall enter its order either approving or rejecting such infrastructure system replacement cost recovery charge rate schedules within thirty days after the date of the filing of the agreement with the commission.

(g) Any agreement filed with the commission shall be presumed in the public interest, and absent any clear evidence on the face of the agreement that it is contrary to the standards and provisions of the State Natural Gas Regulation Act, the agreement shall be approved by the commission.

(h) If the negotiations fail to result in an agreement upon any infrastructure system replacement cost recovery charge rate schedules within the time permitted by this section for such negotiations, the jurisdictional utility may formally notify the commission of this fact and the matter shall be submitted for determination by the commission as a contested proceeding with the affected cities as one party and the jurisdictional utility as the other. The affected cities and the jurisdictional utility shall submit any documents, data, or information in support of the city's or jurisdictional utility's position to the commission in a report to be filed not later than fourteen days after the commission receives notice that negotiations have failed and formally notifies the parties that it will be hearing the matter as a contested case. The commission shall hold a hearing in the case not later than thirty-five days after the receipt of the reports of both parties. In determining the appropriate pretax revenue of the jurisdictional utility, the commission shall consider the factors set out in subsection (5) of section 66-1866. A final determination by the commission shall be rendered by the commission within twenty-one days after the adjournment of the hearing.

(i) If information filed pursuant to subdivision (h) of this subsection is not considered a public record within the meaning of sections 84-712 to 84-712.09, such information may be submitted to the commission by the jurisdictional utility or affected cities for the limited purpose of consideration by the commission under this section subject to a protective order issued by the commission.

(j) Within thirty days after any infrastructure system replacement cost recovery charge rate schedules approved by the commission pursuant to this section become effective, copies of all documents relating to such infrastructure system replacement cost recovery charge rate schedules, except those determined to be confidential under rules and regulations adopted and promulgated by the commission or that may be withheld from the public pursuant to subdivision (h) or (j) of this subsection, shall be available for public inspection in every office and facility open to the general public of the jurisdictional utility in this state.

(5) A jurisdictional utility may apply for a change in any infrastructure system replacement cost recovery charge rate schedules approved pursuant to this section no more than once in any twelve-month period. Any such application for a change shall be pursued in the manner provided for in this section.

(6)(a) The monthly infrastructure system replacement cost recovery charge rate shall be allocated among the jurisdictional utility's classes of customers in the same manner as costs for the same type of facilities were allocated among classes of customers in the jurisdictional utility's most recent general rate proceeding. An infrastructure system replacement cost recovery charge rate shall be assessed to customers as a monthly fixed charge and not based on volumetric consumption. Such monthly charge shall not increase more than fifty cents per residential customer over the base rates in effect at the time of the initial filing for any infrastructure system replacement cost recovery charge rate schedules. Thereafter, each subsequent filing shall not increase the monthly charge by more than fifty cents per residential customer over that charge in existence at the time of the most recent application for any infrastructure system replacement cost recovery charge rate schedules.

(b) At the end of each twelve-month period during which the infrastructure system replacement cost recovery charge rate schedules are in effect, the jurisdictional utility shall reconcile the differences between the revenue resulting from an infrastructure system replacement cost recovery charge and the appropriate pretax revenue for that period and shall submit the reconciliation and any proposed infrastructure system replacement cost recovery charge rate schedules adjustment to the affected cities for approval to recover or refund the difference, as appropriate, through adjustments of the infrastructure system replacement cost recovery charge rate. Review and approval of such reconciliation or adjustment shall proceed in the manner set out in the commission order on the initial application for an infrastructure system replacement cost recovery charge rate.

(7)(a) A jurisdictional utility that has implemented any infrastructure system replacement cost recovery charge rate schedules pursuant to this section shall cease to collect such charges when new base rates and charges become effective for the jurisdictional utility following a commission order establishing or approving customer rates in a subsequent general rate proceeding.

(b) In any subsequent general rate proceeding involving a jurisdictional utility which is collecting charges pursuant to any infrastructure system replacement cost recovery charge rate schedules, the new general rates shall reflect a reconciliation of any previously unreconciled infrastructure system replacement cost recovery charge revenue as necessary to ensure that the revenue matches as closely as possible to the appropriate pretax revenue for that period as determined in the general rate proceeding.

(c) If, during a subsequent general rate proceeding, the recovery of certain costs associated with eligible infrastructure system replacements are disallowed, the new general rates approved shall include such adjustments as are necessary to recognize and account for any overcollections.

(8) Nothing in this section shall be construed to limit the authority of the commission or affected cities engaged in negotiations regarding a general rate filing with a jurisdictional utility to review and consider infrastructure system replacement cost recovery charge rates along with other costs during any general rate proceeding of such jurisdictional utility.

(1) Prior to undertaking rural infrastructure development pursuant to sections 66-2101 to 66-2107, a jurisdictional utility shall file a rural infrastructure surcharge tariff with the commission consistent with the agreement negotiated pursuant to subsection (2) of this section. The filing may be a joint filing with other jurisdictional utilities and may affect more than one electing city. With the rural infrastructure surcharge tariff, the jurisdictional utility shall file:

(a) A map of the unserved or underserved area it proposes to serve;

(b) A description of the project;

(c) Information regarding support of the project from individuals, businesses, or government entities;

(d) An executed agreement with the electing city or cities; and

(e) The factors the jurisdictional utility has considered pursuant to section 66-2105.

(2) An agreement submitted pursuant to subdivision (1)(d) of this section may include, but shall not be limited to, terms and conditions that address the following:

(a) Inclusion of representatives of the following possible parties: The electing city or cities; the jurisdictional utility; an interstate natural gas pipeline company; current and prospective customers; and any other interested parties;

(b) Impact on other cities, jurisdictional utilities, interstate natural gas pipeline companies, and current and prospective customers;

(c) The possibility of a joint filing with other jurisdictional utilities and agreements with other electing cities;

(d) The factors set forth in section 66-2105;

(e) The capacity of the project;

(f) The potential to enhance demand for natural gas capacity created by the project;

(g) Ownership of the project or parts of the project;

(h) Participation by the electing city or cities and other parties to determine the customer or customers which will receive the additional natural gas capacity created by the project;

(i) Any matters involving rights-of-way and easements and fees, taxes, and surcharges related thereto;

(j) The payment of costs of the rural infrastructure development, including, but not limited to: (i) Proposed rate increases for customers of the electing city or cities and within a city's extraterritorial zoning jurisdiction, including direct customers and residential or commercial customers; (ii) any city funds, including funds from the Local Option Municipal Economic Development Act, which may be used to pay for consultants, issue bonds, lower proposed rate increases, or otherwise finance the rural infrastructure development project; and (iii) contributions from direct customers or other sources, including, but not limited to, state or federal grants or loans; and

(k) Reimbursement of costs to the electing city or cities or ratepayers of the electing city or cities, including ratepayers in a city's extraterritorial zoning jurisdiction.

(3) A jurisdictional utility may file a gas supply cost adjustment tariff with the commission, consistent with the agreement negotiated pursuant to subsection (2) of this section, that adjusts the jurisdictional utility's residential or commercial customer rates to provide for the recovery of, but not limited to, costs related to ongoing gas supply, transmission, pipeline capacity, storage, financial instruments, or interstate pipeline charges or other related costs for rural infrastructure development.

(4) A rural infrastructure surcharge tariff or gas supply cost adjustment tariff shall become effective immediately upon filing with the commission of all items required under this section.

(5) Any rural infrastructure surcharge tariff or gas supply cost adjustment tariff, and any future changes thereto, applied to high-volume customers obtaining direct service and to general system residential or commercial customers subject to jurisdiction of the commission shall be calculated and implemented in a manner proposed by the jurisdictional utility consistent with the agreement negotiated pursuant to subsection (2) of this section.

(6) The rural infrastructure surcharge tariff or gas supply cost adjustment tariff, and any future changes thereto, shall first be applied to customers receiving direct service from the rural infrastructure development. If such resulting rates are uneconomic or commercially unreasonable to those customers, the jurisdictional utility shall recover the costs above the rates determined by the jurisdictional utility to be economical or commercially reasonable from general system residential or commercial customers in the electing city in a manner proposed by the jurisdictional utility consistent with the agreement negotiated pursuant to subsection (2) of this section.

(7) A jurisdictional utility may collect a rural infrastructure surcharge or gas supply cost adjustment until costs are fully recovered even if the jurisdictional utility has not filed for or is the subject of a new general rate proceeding within that period of time.

(8) No more than once annually, the commission may initiate a proceeding and conduct a public hearing to determine whether the rural infrastructure surcharge of a jurisdictional utility reflects the actual costs of the rural infrastructure development and to reconcile any amounts collected from ratepayers with actual costs incurred by the jurisdictional utility. The commission shall make a decision as to whether the rural infrastructure surcharge reflects actual costs within ninety days after initiating the proceeding. The rural infrastructure surcharge shall be presumed to reflect the actual costs of the rural infrastructure development, unless the contrary is shown.

(9) Any refund, including interest thereon, shall be made to presently served ratepayers in the electing city by an appropriate adjustment shown as a credit on subsequent bills during a period selected by the jurisdictional utility, not to exceed twelve months, or by a cash refund at the option of the jurisdictional utility. The jurisdictional utility shall not be required to provide such refunds to ratepayers served at competitively set or negotiated rates or under alternative rate mechanisms when the ratepayer is paying less than the full rate determined pursuant to the gas supply cost adjustment rate schedule or under a customer choice or unbundling program.

(10) A jurisdictional utility is not required to proceed with rural infrastructure development in an unserved or underserved area unless required to do so under an agreement with an electing city or cities.

(11) A jurisdictional utility utilizing a rural infrastructure surcharge shall separately identify the surcharge on each customer's bill using language sufficiently clear to identify the purpose of the surcharge.

(12) For purposes of this section:

(a) City means a city of the first or second class or village;

(b) Electing city means a city that has elected through its governing body to benefit from additional natural gas supply made possible by a rural infrastructure development and has executed an agreement with the jurisdictional utility serving the city and the city's extraterritorial zoning jurisdiction to provide the additional natural gas supply in accordance with terms and conditions mutually acceptable to the city and jurisdictional utility consistent with the agreement negotiated pursuant to subsection (2) of this section;

(c) Rural infrastructure development means planning, financing, development, acquisition, construction, owning, operating, and maintaining a natural gas pipeline facility or entering into agreements with an interstate pipeline for existing, new, or expanded capacity on the interstate pipeline's system for the transportation of natural gas necessary to supply unserved or underserved areas; and

(d) Rural infrastructure surcharge means a surcharge through which a jurisdictional utility may recover costs for rural infrastructure development.

(1) The Natural Gas Fuel Board is hereby established to advise the Department of Environment and Energy regarding the promotion of natural gas as a motor vehicle fuel in Nebraska. The board shall provide recommendations relating to:

(a) Distribution, infrastructure, and workforce development for natural gas to be used as a motor vehicle fuel;

(b) Loans, grants, and tax incentives to encourage the use of natural gas as a motor vehicle fuel for individuals and public and private fleets; and

(c) Such other matters as it deems appropriate.

(2) The board shall consist of eight members appointed by the Governor. The Governor shall make the initial appointments by October 1, 2012. The board shall include:

(a) One member representing a jurisdictional utility as defined in section 66-1802;

(b) One member representing a metropolitan utilities district;

(c) One member representing the interests of the transportation industry in the state;

(d) One member representing the interests of the business community in the state, specifically fueling station owners or operators;

(e) One member representing natural gas marketers or pipelines in the state;

(f) One member representing automobile dealerships or repair businesses in the state;

(g) One member representing labor interests in the state; and

(h) One member representing environmental interests in the state, specifically air quality.

(3) All appointments shall be subject to the approval of a majority of the members of the Legislature if the Legislature is in session, and if the Legislature is not in session, any appointment to fill a vacancy shall be temporary until the next session of the Legislature, at which time a majority of the members of the Legislature may approve or disapprove such appointment.

(4) Members shall be appointed for terms of four years, except that of the initial appointees the terms of the members representing a jurisdictional utility and a metropolitan utilities district shall expire on September 30, 2015, the terms of the members representing the transportation industry, the business community, natural gas marketers or pipelines, and automobile dealerships or repair businesses shall expire on September 30, 2014, and the terms of the members representing labor and environmental interests shall expire on September 30, 2013. Members may be reappointed. A member shall serve until a successor is appointed and qualified.

(5) A vacancy on the board shall exist in the event of death, disability, resignation, or removal for cause of a member. Any vacancy on the board arising other than from the expiration of a term shall be filled by appointment for the unexpired portion of the term. An appointment to fill a vacancy shall be made by the Governor with the approval of a majority of the Legislature, and any person so appointed shall have the same qualifications as the person whom he or she succeeds.

(6) The board shall meet at least once annually.

(7) The members shall not be reimbursed for expenses associated with carrying out their duties as members.

(8) The department shall provide administrative support to the board as necessary so that the board may carry out its duties.

The Legislature declares it is the public policy of this state to provide adequate natural gas pipeline facilities and service in order to expand and diversify the Nebraska economy resulting in increased employment, new and expanded businesses and industries, and new and expanded sources of tax revenue.

For purposes of sections 66-2101 to 66-2107:

(1) City means a city of the first or second class or village;

(2) Jurisdictional utility has the same meaning as in section 66-1802;

(3) Natural gas pipeline facility means a pipeline, pump, compressor, or storage or other facility, structure, or property necessary, useful, or incidental in the transportation of natural gas; and

(4) Rural infrastructure development means planning, financing, development, acquisition, construction, owning, operating, and maintaining a natural gas pipeline facility or entering into agreements with an interstate pipeline for existing, new, or expanded capacity on the interstate pipeline's system for the transportation of natural gas necessary to supply unserved or underserved areas; and

(5) Unserved or underserved area means an area in this state lacking adequate natural gas pipeline capacity to meet the demand of existing or potential end-use customers as determined by the jurisdictional utility presently serving the area. Unserved or underserved area does not include any area within a city of the primary or metropolitan class.

A city that has been authorized to utilize funds pursuant to the Local Option Municipal Economic Development Act for purposes of sections 66-1868 and 66-2101 to 66-2107 shall have all necessary powers to implement and to carry out its powers and duties under such sections.

A jurisdictional utility may undertake rural infrastructure development necessary to supply unserved or underserved areas in or adjacent to areas presently served by the jurisdictional utility and not served by another jurisdictional utility.

Prior to undertaking rural infrastructure development, a jurisdictional utility shall consider factors such as the economic impact to the area, economic feasibility, whether other options may be more in the public interest, such as utilization of any existing or planned interstate or intrastate pipeline facilities of private persons, companies, firms, or corporations, and the likelihood of successful completion and ongoing operation of the facility.

A jurisdictional utility shall not be subject to the State Natural Gas Regulation Act to the extent it is exercising power granted in section 66-2104 except as specifically provided otherwise but shall be subject to sections 75-501 to 75-503.

Sections 66-2101 to 66-2106 do not apply to a natural gas utility owned or operated by a city or a metropolitan utilities district.