Nebraska Laws and Incentives for Ethanol

The list below contains summaries of all Nebraska laws and incentives related to Ethanol.

State Incentives

Cellulosic Ethanol Investment Tax Credit

A qualified investor may receive a tax credit of up to 40% of an investment, up to $350,000, 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 Nebraska Revised Statutes 49-801.01; 77-2715.07; 77.6301-77.6306)

Alternative Fuel Vehicle (AFV) and Fueling Infrastructure Loans

The Nebraska Energy Office administers the Dollar and Energy Saving Loan Program, which 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. For more information, see the Dollar and Energy Saving Loans website.

Ethanol and Biodiesel Tax Exemption

Motor fuels sold to an ethanol or biodiesel production facility and motor fuels manufactured at and sold from 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 Revised Statutes 66-489 and 66-496)

Laws and Regulations

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)