Court Opinion

ID: 3546029
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:56:47.801989+00
Date Added: 2024-06-11T13:40:28.426840
License: Public Domain

REQUESTED BY: Senator Loran Schmit Nebraska State Legislature State Capitol, Room 1103 Lincoln, Nebraska 68509
Dear Senator Schmit:
You have asked our opinion on the constitutionality of three proposals to fund the construction of plants to produce grain alcohol.
One proposal would provide a grant of funds appropriated from the general fund for the construction of such plants.
A second proposal would provide a refundable tax credit for the production of alcohol with any excess of a refund over a producer's tax liability to be paid by the Department of Revenue from the general fund.
The third proposal would be similar to the second except that the excess over the tax liability would not be refundable, but would carry over as a credit against tax liability in future years.
It seems quite clear that the purpose of the proposals set forth above is to promote the development of alcohol plants in the state. In light of this we point out that in the adoption of Article XIII, Section 2, of the Nebraska Constitution, a mechanism has been created for the encouragement of industrial development. We doubt that there would be any question but that none of the three proposals suggested would meet the requirements or fall within the requirements of this provision of our Constitution.
Your question is directed to the constitutionality of the proposals considering the provision of Article XIII, Section 3, of the Nebraska Constitution, which provides in part: "The credit of the state shall never be given or loaned in aid of any individual, association, or corporation, . . ."
In Oxnard Beet Sugar Company v. State, 73 Neb. 57,102 N.W. 80 (1905), our Supreme Court held a statute offering a bounty for the manufacture of sugar and chicory unconstitutional for the reason that the Legislature cannot appropriate or pledge the public money for private purposes.
Later cases to the same effect are United Community Services v. Omaha National Bank, 162 Neb. 786, 77 N.W.2d 576
(1956), and State ex rel. Beck v. City of York, 164 Neb. 223,82 N.W.2d 269 (1957).
In light of the above, it is doubtful that any of the above proposals to encourage the construction of plants for the production of grain alcohol would be upheld by our courts.
Very truly yours,
ROBERT M. SPIRE Attorney General