Opinion ID: 2176035
Heading Depth: 1
Heading Rank: 8

Heading: debtor or creditor

Text: The key question in our determination of the constitutionality of §§ 66-1344 and 66-1347 is whether the state acts as a debtor by extending the state's credit to private corporations, associations, or individuals. In prior cases where the state became a debtor in the interest of private parties, we held the statutes unconstitutional. See, Haman v. Marsh, 237 Neb. 699, 467 N.W.2d 836 (1991); Chase v. County of Douglas, 195 Neb. 838, 241 N.W.2d 334 (1976); State ex rel. Beck v. City of York, 164 Neb. 223, 82 N.W.2d 269 (1957). The ethanol tax credits may be used to pay Nebraska motor fuel taxes. Black's Law Dictionary 403 (6th ed. 1990) defines a debt as [a] fixed and certain obligation to pay money or some other valuable thing or things, either in the present or in the future. The motor fuel taxes are fixed and certain obligations to pay money in the present or in the future to the state. Black's further defines a debtor as [o]ne who owes a debt to another who is called the creditor. Id. at 404. It is clear that a taxpayer responsible for paying motor fuel taxes is a debtor to the State of Nebraska and, conversely, that the state is a creditor of the taxpayer. The redemption of the motor fuel tax credit requires the state to forgo the collection of that portion of the motor fuel tax which is a debt owed to the state. The state is in the position of a creditor excusing the payment of the motor fuel tax by the debtor. The tax credit merely offsets a debt owed to the state. Although the motor fuel taxes collected are reduced because of the ethanol credits, the ethanol tax credit program does not place the state in the position of a debtor or guarantor. Until the state is owed the motor fuel tax, the tax credit cannot be used by the party who has the tax credit. The credit is only redeemable against a debt that is owed by a party to the state. The state forgives an indebtedness, but is never obligated to pay any money or extend a credit of the state. Contrary to Callan's argument, the state does not create or incur an indebtedness. The state always remains a creditor in relation to the motor fuel tax. We therefore conclude that the state is not a debtor, surety, or guarantor of the debt of another with respect to the tax credits authorized by § 66-1344. Many provisions in the Nebraska Revenue Act of 1967, Neb.Rev.Stat. §§ 77-2701 through 77-27,135.01 (Reissue 1990 & Cum. Supp.1994), allow taxpayers to decrease their tax liability by the use of various types of credit. See, e.g., §§ 77-2704.12(3), 77-2715.07, and 77-2734.03. See, also, Neb.Rev. Stat. §§ 77-1736.08 and 77-27,188 (Cum. Supp.1994) and 77-4105 (Reissue 1990). In all these cases, the revenues of the state are reduced from the level at which they would be if the tax credits were not allowed. However, in none of these instances involving tax credits does the state guarantee payment or lend its credit to the transaction. If the issuance of the credits exhausts the EPICF, the state cannot fund the credits from the Highway Trust Fund, the Highway Cash Fund, or otherwise. There is no obligation on the general fund of the state. It is true that § 66-1345 directs the State Treasurer to transfer money periodically from the EPICF to the Highway Trust Fund in an amount equal to the number of tax credits redeemed, less certain amounts as specified by the statute. Money from a state fund administered by the Nebraska Ethanol Board is transferred to a state fund administered by the Department of Revenue. The Legislature has chosen to internally reimburse the Department of Revenue for income that was not received through the usual motor fuel tax. The transfer of money from one state agency to another cannot be considered the loaning of the state's credit to private industry. The EPICF does not implicate the credit of the state. Nor does the fact that the Highway Trust Fund might not be reimbursed if the EPICF is depleted implicate article XIII, § 3. There is no obligation to replace revenue uncollected because of a tax credit. In the case of other tax credits, the Legislature has chosen to allow the income to remain uncollected. In this case, if the ethanol fund is insufficient to replace the lost revenue, the Highway Trust Fund remains unreimbursed. In either case, the state has chosen to forgo the collection of revenue. In neither case is the state a debtor to any party. A statute is presumed to be constitutional, and all reasonable doubts regarding constitutionality should be resolved in favor of its validity. See Slack Nsg. Home v. Department of Soc. Servs., 247 Neb. 452, 528 N.W.2d 285 (1995). The party asserting the unconstitutionality of a statute has the burden of overcoming this presumption by clearly demonstrating that the statute is unconstitutional. See, State v. Popco, Inc., 247 Neb. 440, 528 N.W.2d 281 (1995); In re Application A-16642, 236 Neb. 671, 463 N.W.2d 591 (1990). When a challenged statute is susceptible of more than one reasonable construction, a court uses the construction that will achieve the purposes of the statute and preserve the statute's validity. Ehlers v. Perry, 242 Neb. 208, 494 N.W.2d 325 (1993). Although the amount of motor fuel taxes collected by the state is reduced by the ethanol tax credit program, the state is not placed in the position of a debtor. The tax credit is used to offset a debt owing to the state. The credit of the state is not involved. We find that Callan's arguments are not persuasive. Since Callan has failed to meet the first prong of the Haman test, further analysis is unnecessary. Summary judgment is to be granted when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Tompkins v. Raines, 247 Neb. 764, 530 N.W.2d 244 (1995). We find that there is no genuine issue as to any material fact as to the constitutionality of the ethanol tax credit program and that Balka is entitled to a judgment as a matter of law. We therefore affirm the judgment of the district court. AFFIRMED.