Opinion ID: 2176035
Heading Depth: 1
Heading Rank: 6

Heading: stege's affidavit

Text: Stege's affidavit recites that the Ethanol Production Incentive Cash Fund (EPICF), created by § 66-1345, was initially funded by a transfer of $11 million from the Ethanol Authority and Development Cash Fund. The Ethanol Authority and Development Cash Fund was funded by a checkoff program on grain sold in Nebraska. Additional moneys are transferred into the EPICF pursuant to statute from money which may be appropriated by the Legislature; money received as gifts, bequests, grants, or other contributions from public or private sources; money made available due to failure to fulfill conditional requirements pursuant to investment agreements entered into prior to April 30, 1992; money received as return on investment of the fund; and money otherwise credited to the fund from sources deemed appropriate by the Legislature. § 66-1345(1). Stege stated that in January 1993, it became the duty of the Department of Revenue at the end of each calendar quarter to notify the State Treasurer of the amount of the motor fuel tax that was not collected in the preceding calendar quarter due to the ethanol tax credits provided by § 66-1344. The State Treasurer is then directed to transfer from the EPICF to the Highway Trust Fund an amount equal to the credits less the amounts mandated in § 66-1345(2). As of September 1, 1993, the EPICF's balance was $16,746,500. No general fund moneys have been appropriated to the EPICF since its inception. The ethanol tax credits cannot be funded from either the Highway Cash Fund or the Highway Trust Fund. Under §§ 66-1344 and 66-1347, upon meeting certain conditions, the ethanol producer is eligible to receive a credit of 20 cents per gallon of ethanol produced in Nebraska. The credit is given only for ethanol produced at a plant in Nebraska at which all fermentation, distillation, and dehydration takes place. A producer receives credit for all qualified gallons for 60 months beginning with the first month for which the producer is eligible. Credits will not be granted after December 31, 2000. The credit is in the form of a transferable motor fuel tax credit certificate, which an ethanol producer can then transfer to any individual or entity which is responsible for paying motor fuel taxes under Nebraska law, Stege stated. Stege's affidavit provided an example of the ethanol tax credit program. If an ethanol producer produces 1 million gallons per month, the producer submits to the department a form indicating the amount of qualified production in the previous month. Based on production of 1 million gallons and a credit of 20 cents per gallon, a credit of $200,000 is applied to the producer. The ethanol producer designates a company or individual to which the $200,000 in motor fuel tax credits shall be assigned. Typically, the credits are assigned to an oil jobber to reduce the oil jobber's motor fuel tax liability. If the oil jobber's monthly fuel tax is less than $200,000, the credit can be carried over until it is depleted. The jobber, in a private and separate transaction, remits to the ethanol producer a check for $200,000 less any negotiated fee. The State of Nebraska does not enter into any surety or guarantee agreement with respect to the issuance of the credits. Stege estimated that sales of gasoline containing the oxygenate ethanol composed 47 percent of all gasoline sold in Nebraska in 1992.