Provide for a tax on diesel fuels, change provisions relating to refunds for motor fuel taxes, the petroleum release remedial action fee, and the Motor Fuel Tax Enforcement and Collection Cash Fund, change and eliminate provisions of the Ethanol Development Act, and eliminate the Ethanol Production Incentive Cash Fund
LB815 revises Nebraska’s motor fuel tax and ethanol-related statutes. The bill imposes a new tax on certain diesel fuels, including a one-quarter cent per gallon tax on dyed diesel meeting specified sulfur/cetane conditions, and directs the first $140,000 collected each fiscal year from that diesel tax to the Motor Fuel Tax Enforcement and Collection Cash Fund, with the remainder credited to the Agricultural Alcohol Fuel Tax Fund. It also updates refund procedures for motor fuel taxes, including rules for claims, minimum refund amounts, documentation requirements, and transfers from the Highway Trust Fund to offset approved refunds.
The bill also changes the petroleum release remedial action fee by adjusting the fee structure, maintaining licensing and collection requirements, and creating the Petroleum Release Remedial Action Collection Fund to cover Department of Revenue administrative costs. In addition, LB815 makes extensive changes to the Ethanol Development Act, including revising legislative findings, redefining terms, restructuring the Nebraska Ethanol Board, and expanding or clarifying the board’s authority to promote ethanol production, blended fuels, research, market development, and related agricultural processing. The bill repeals or eliminates several original and cumulative statutory provisions, including the Ethanol Production Incentive Cash Fund, and harmonizes effective dates so some provisions became operative on October 1 while others took effect on their stated dates.
LB815 amends multiple sections of Nebraska’s motor fuel, petroleum fee, and ethanol development laws. It creates a new diesel fuel tax, modifies refund and exemption rules for motor fuel taxes, changes how petroleum release remedial action fees are assessed and administered, and redirects revenue into the Motor Fuel Tax Enforcement and Collection Cash Fund, the Agricultural Alcohol Fuel Tax Fund, and the Petroleum Release Remedial Action Collection Fund. It also substantially revises the Ethanol Development Act by updating the Nebraska Ethanol Board’s structure and duties and by eliminating the Ethanol Production Incentive Cash Fund and other obsolete provisions.
The bill appears to have been generally supported and moved through the Legislature with little visible opposition in the recorded votes. An Agriculture Committee amendment was adopted unanimously, the bill advanced without dissent, and final passage was achieved by a clear 35-14 vote. The governor approved the bill, indicating it had enough support to become law despite some recorded floor opposition.
The main points of contention likely centered on the new diesel fuel tax, the reallocation of fuel-tax and fee revenues, and the elimination or restructuring of ethanol incentive programs. Those changes affect fuel suppliers, distributors, refiners, importers, the Department of Revenue, the Nebraska Ethanol Board, agricultural producers, and parties eligible for refunds or fund transfers. The final floor vote shows meaningful opposition, suggesting disagreement over the tax burden and the policy shift away from prior ethanol incentive funding, even though committee action on the amendment was unanimous.