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Nebraska Incentives and Laws

Listed below are the summaries of all current Nebraska incentives, laws, regulations, funding opportunities, and other initiatives related to alternative fuels and vehicles, advanced technologies, or air quality. You can go directly to summaries of:

• State Incentives (7)
• Utility/Private Incentives (1)
• Laws and Regulations (6)

State Incentives

Cellulosic Ethanol Investment Tax Credit

A qualified investor may receive a tax credit of up to 40% of an investment in a small business that is improving, researching, developing, or producing a proprietary product, process, or service related to cellulosic ethanol. A qualified investor is an individual, trust, or pass-through entity that meets certain requirements set by the Nebraska Department of Economic Development. An eligible small business must employ up to 25 individuals, be headquartered in Nebraska, and employ over half of its employees in the state or have over half of its total payroll paid or incurred in the state. Up to $3 million in tax credits is available annually, and up to $1 million in tax credits is available for a single qualified small business. Tax credits are available until 2017. (Reference Legislative Bill 389, 2011)

Ethanol Production Tax Credit

A new ethanol facility that reached a minimum annual production capacity of 100,000 gallons, before denaturing, before June 30, 2004, may be eligible for a tax credit in the form of a transferable motor vehicle tax credit certificate of $0.18 per gallon of ethanol produced. This credit is available to the facility for 96 consecutive months beginning with the first calendar month of eligibility and ending no later than June 30, 2012. Credits are available for up to 15,625,000 gallons of ethanol produced annually at each facility, and for up to 125,000,000 gallons of ethanol produced at each facility by the end of the 96-month period. Credits are only available for ethanol produced at a facility in Nebraska at which all fermentation, distillation, and dehydration takes place. Producers must have entered into an agreement with the Nebraska Tax Commissioner before April 16, 2004, to receive credits and submit the claims for credits to the Nebraska Department of Revenue within three years of the date of ethanol production, or by September 30, 2012, whichever occurs first. Other restrictions may apply. (Reference Nebraska Statutes 66-1344 and 66-1344.01)

Biodiesel Production Investment Tax Credit

Investors in Nebraska biodiesel production facilities are eligible to receive a tax credit of 30% of the amount invested in the facility between January 1, 2008, and January 1, 2015, not to exceed $250,000. The credit is only available for facilities that produce B100, perform all processing in Nebraska, and are at least 51% owned by Nebraska individuals or entities. The state may reclaim the tax credit if the biodiesel production facility remains in operation for less than three years. B100 is a pure biodiesel containing mono-alkyl esters of long chain fatty acids derived from vegetable oils or animal fats that meets ASTM standard D6751. (Reference Nebraska Statutes 77-27,236)

Alternative Fuel Vehicle (AFV) and Fueling Infrastructure Loans

The Nebraska Energy Office administers the Dollar and Energy Saving Loan Program (Program). The Program makes low-cost loans available for a variety of alternative fuel projects, including the replacement of conventional vehicles with AFVs; the purchase of new AFVs; the conversion of conventional vehicles to operate on alternative fuels; and the construction or purchase of a fueling station or equipment. The maximum loan amount is $750,000 per borrower, and the interest rate is 5% or less.

Alternative Fuel Tax Refund

The Motor Fuel Tax Enforcement and Collection Division of the Nebraska Department of Revenue will refund taxes paid on compressed natural gas, liquefied natural gas, and liquefied petroleum gas or propane when the fuel is used to operate buses capable of carrying seven or more passengers within or near a municipality. (Reference Nebraska Statutes 66-6,100 and 66-6,109.01)

Ethanol and Biodiesel Tax Exemption

Motor fuels sold to an ethanol or biodiesel production facility and motor fuels manufactured at an ethanol or biodiesel facility are exempt from certain motor fuel tax laws the Motor Fuels Division of the Nebraska Department of Revenue enforces. (Reference Nebraska Statutes 66-489 and 66-496)

Idle Reduction Weight Exemption

The maximum gross weight limit and the axle weight limit for any vehicle or combination of vehicles equipped with idle reduction technology may exceed the state's gross weight limit by up to 400 pounds per vehicle to compensate for the additional weight of the idle reduction technology. (Reference Nebraska Statutes 60-6,294)

Utility/Private Incentives

Compressed Natural Gas (CNG) Vehicle Rebate - Metropolitan Utilities District

Residential gas customers in the Omaha area served by the Metropolitan Utilities District are eligible for a $500 rebate for the purchase of a dedicated CNG vehicle. Rebates are available on a first-come first-served basis, and applicants must provide proof of purchase for the vehicle. Additional restrictions may apply. Commercial rebates are available on a case-by-case basis.

Laws and Regulations

Low-Speed Vehicle Access to Roadways

Low-speed vehicles may only travel on roadways with a posted speed limit of up to 35 miles per hour (mph), but may cross highways with a posted speed limit of over 35 mph. A low-speed vehicle is any four-wheeled motor vehicle with a gross vehicle weight rating of up to 3,000 pounds whose top speed is at least 20 mph but not more than 25 mph. A low-speed vehicle must be manufactured in compliance with federal standards for low-speed vehicles as referenced in Title 49 of the Code of Federal Regulations, section 571.500. (Reference Legislative Bill 289, 2011, and Nebraska Statutes 60-119.01 and 60-336.01)

Alternative Fuel Use

All state employees operating flexible fuel or diesel vehicles as part of the state fleet must use E85 or biodiesel blends whenever reasonably available. Additionally, the Nebraska Transportation Services Bureau and Nebraska Department of Roads must take steps to increase access to E85 and blends of 2% biodiesel (B2) for state vehicle operators. (Reference Executive Order 05-03, 2005)

Alternative Fuel Vehicle (AFV) Registration

A fee of $75 is required for the registration of an AFV that operates on electricity, solar power, or any other source of energy not otherwise taxed under the state motor fuel tax laws. Compressed natural gas, liquefied natural gas, and liquefied petroleum gas or propane are not subject to this requirement. (Reference Legislative Bill 289, 2011, and Nebraska Statutes 60-306)

Alternative Fuel Excise Tax

An excise tax of $0.075 per gallon or gasoline gallon equivalent (GGE) is imposed on all compressed natural gas (CNG), liquefied natural gas (LNG), and liquefied petroleum gas or propane sold for use in registered motor vehicles. Additionally, each retailer of such fuel must pay an excise tax of $0.028 per gallon or GGE on all CNG, LNG, and propane fuel sold for use in registered motor vehicles. Additional taxes as specified annually under these statutes may apply. (Reference Nebraska Statutes 66-6,102; 66-6,107; and 66-6,109)

Advanced Biofuels Strategic Plan

The Natural Resources Committee of the Legislature (Committee) worked with Bio Nebraska, a nonprofit corporation, to develop a five-year strategic plan to grow the bioscience industry in the state. The Nebraska Bioscience Roadmap 2010 includes recommendations related to the development of advanced biofuels. The Committee will prepare and present annual updates on the strategic plan to the Legislature. (Reference Nebraska Statutes 50-501)

Regional Biofuels Corridor

Nebraska joined Indiana, Iowa, Kansas, Michigan, Minnesota, North Dakota, South Dakota, and Wisconsin in adopting a cooperative initiative under the Energy Security and Climate Stewardship Platform Plan (Platform). The Platform establishes a regional biofuels corridor program and directs state transportation, agriculture, and regulatory officials to develop a system of coordinated signage across the Midwest for biofuels and advanced transportation fuels and to collaborate to create regional E85 corridors. The program requires standardized fuel product coding at fueling stations as well as increased education for retailers about converting existing fueling infrastructure to dispense E85.