(1) Any contracting public body may determine its authority to incur indebtedness and to apply or pledge the ad valorem taxes, all as provided in the Nebraska Redevelopment Act, and the legality of all proceedings in connection therewith. For this purpose a petition may be filed in the district court in the county in which the area of operation, or part thereof, of the contracting public body is located against the state and its taxpayers and citizens. Such action shall constitute a bond validation proceeding.

(2) The petition shall set out the contracting public body's authority for incurring the indebtedness and pledging or applying such ad valorem taxes and for all the other essential proceedings had or taken in connection therewith, the amount of the indebtedness issued or to be issued, and the interest they are to bear.

(3) The court shall issue an order, directed against the state and its taxpayers and citizens, requiring the state through the Attorney General to appear at a designated time and place within the county where the petition is filed and show why the petition should not be granted and the proceedings and bonds or tax matters validated. A copy of the petition and order shall be served on the Attorney General at least twenty days before the time fixed for hearing. The Attorney General shall examine the petition, and if it appears or there is reason to believe that it is defective, insufficient, or untrue, or if in the opinion of the Attorney General the issuance of the indebtedness in question has not been duly authorized, defense shall be made by the Attorney General. The Attorney General shall have access, for the purposes of such action, to all records and proceedings of the contracting public body, and any officer, agent, or employee having charge, possession, or control of any of the books, papers, or records of the contracting public body shall exhibit them for examination on demand of the Attorney General and shall furnish, without cost, duly authenticated copies which pertain to the proceedings for the issuance of the indebtedness and the pledge or application of taxes or which may affect their legality.

(4) At the hearing the court shall determine all questions of law and fact and make such orders as will enable it to properly try and determine the action and render a final judgment with the least possible delay. The company and any bondholder may intervene in such proceeding.

(5) The Attorney General, a contracting public body, company, or any bondholder may appeal such order in the normal manner and time for appeals from the district court prescribed by law and applicable court rules.

(6) If the judgment validates such indebtedness, tax matters, and proceedings and no appeal is taken within the time prescribed, or if taken and the judgment is affirmed, such judgment is forever conclusive as to all matters adjudicated against the plaintiff and all persons affected by the action, including all taxpayers and citizens.

(7) If any judgment extends into more than one county it shall be recorded in each such county.

(8) The court costs shall be paid by the contracting public body filing the petition except as the court otherwise determines is equitable.

(9) No judge shall be disqualified in any validation action because he or she is a landowner or taxpayer of any county or city affected.