Exhibit 10.8
STATE OF NEBRASKA
NEBRASKA DEPARTMENT OF REVENUE
ETHANOL PRODUCTION CREDIT AGREEMENT
This agreement is entered into pursuant to Neb. Rev. Stat (S) 66-1344 and
Laws 2001, LB 536, Section 7, between Oregon Trail Ethanol Coalition, LLC,
hereinafter referred to as "OTEC," and the State of Nebraska, by the State Tax
Commissioner, hereinafter referred to as "the State."
It is hereby agreed between OTEC and the State that:
1. OTEC is in the process of planning and constructing an ethanol
production facility and, upon completion of the anticipated construction, will
own and control an ethanol production facility located in either Thayer or
Nuckolls County.
2. OTEC hereby agrees to produce ethanol at the facility and any expansion
thereof.
3. The State agrees to furnish OTEC the tax credits as provided by and
limited in Neb. Rev. Stat (S) 66-1344 in effect on the date of the agreement.
Credits in the amount of eighteen cents per gross gallon of ethanol produced,
before denaturing, will be furnished following the procedures described below.
The tax credits furnished by the State shall be in the form of nonrefundable,
transferable motor vehicle fuel tax credit certificates.
4. The name plate design capacity for the production of ethanol, before
denaturing, at this facility at the commencement of production will be forty
million (40,000,000) gross gallons.
5. The credits will be given only for ethanol produced at the ethanol
production facility identified above at which all fermentation, distillation and
dehydration take place.
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Oregon Trail Ethanol Coalition, LLC
6. OTEC may begin to apply for credits once it attains a minimum rate of
ethanol production, before denaturing, of one hundred thousand (100,000) gross
gallons annually. This minimum rate of ethanol production must be accomplished
prior to June 30, 2004.
7. In order to show that it can accurately measure the requisite minimum
rate of production, OTEC shall initially provide the State with documentation
indicating that the metering devices used to measure the minimum rate of
production have been approved by the State of Nebraska, Department of
Agriculture, Division of Weights and Measures. In order to show that it can
accurately measure the quantity of ethanol produced thereafter, OTEC shall
provide the State with documentation annually indicating that the metering
devices used to measure the production of ethanol have been approved by the
State of Nebraska, Department of Agriculture, Division of Weights and Measures.
8. The initial application to receive credits filed by OTEC must establish
that the minimum rate of ethanol production required has been attained. The
initial application shall cover a period of one calendar month or any part
thereof, but in no event shall the period be less than one day. Once the minimum
rate of ethanol production has been established, OTEC can receive credits for a
period of ninety-six (96) consecutive months, but in no event can OTEC apply for
any credits for ethanol production which occurs after June 30, 2012. The
applications used to apply for credits following the initial application shall
be for periods measured by whole calendar months except that the last
application of the agreement may be for a partial calendar month.
9. Not more than fifteen million six hundred twenty-five thousand
(15,625,000) gross gallons of ethanol produced annually at the ethanol
production facility will be eligible for the tax credits. Not more than one
hundred twenty-five million (125,000,000) gross gallons of ethanol produced at
the ethanol facility by the end of the ninety-six (96) consecutive-month period
described above shall be eligible for the tax credits.
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Oregon Trail Ethanol Coalition, LLC
10. OTEC must provide to the State copies of the reports filed with the
Federal Bureau of Alcohol, Tobacco and Firearms on an annual basis.
11. This agreement may be amended to include any proposed expansion that is
not contemplated at the time of this agreement.
12. This agreement shall not be assigned by OTEC without first receiving
written consent from the State. Such consent shall not be unreasonably withheld
and, if granted, shall be provided within thirty days of a written request for
said consent. If such consent is granted, a fully executed amendment to this
agreement reflecting the assignment shall be provided to the State no later than
ten days following the execution of the assignment.
13. This agreement shall be binding between the parties hereto. It shall be
governed by the laws of the State of Nebraska. No oral statements, proposals, or
agreements shall be binding on either party.
The undersigned parties hereto accept and bind themselves to the provisions
of this agreement.
Dated this 15/th/ day of January, 2002.
OREGON TRAIL ETHANOL COALITION, LLC
By /s/ Mark Jagels and /s/ Mike Schardt
--------------------------------- --------------------------------------
Mark Jagels Mike Schardt
Co-Chair Co-Chair
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Oregon Trail Ethanol Coalition, LLC
Dated this 17/th/ day of January.
NEBRASKA DEPARTMENT OF REVENUE
By /s/ Mary Jane Egr
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Mary Jane Egr
State Tax Commissioner