(1) There is hereby established the Commission on Indian Affairs. For purposes of sections 81-2501 to 81-2508, commission shall mean the Commission on Indian Affairs.

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(2) The commission shall consist of fourteen members who shall be enrolled tribal members of a federally recognized Indian tribe residing within the State of Nebraska and from the following categories: Two from the Omaha Tribe reservation; two from the Winnebago Tribe reservation; two from the Santee Tribe reservation; two from the Ponca Tribe of Nebraska; one from the city of Lincoln; two from the city of Omaha; one from the district comprised of Sioux, Dawes, Sheridan, and Box Butte counties; one from the district comprised of Garden, Deuel, Cheyenne, Kimball, Banner, Morrill, and Scotts Bluff counties; and one member at large. The commission may have such nonvoting, ex officio members as shall be appointed by the commission and who need not be of Indian ancestry. The commission shall elect one of its members as chairperson. Members of the commission shall serve four-year terms or for the unexpired term in the event of a vacancy, except that when making the initial appointments of members representing new categories or districts one-half of the members shall serve two-year terms and one-half of the members shall serve four-year terms. Members of the commission serving on September 6, 1991, shall serve until their terms expire.

(3) As the terms of the voting members expire, their successors shall be appointed by the Governor from a panel of nominees submitted by the group to be represented, with three names being submitted for each appointment to be made.

(a) Nominations for successors representing the Omaha Tribe reservation, the Winnebago Tribe reservation, and the Santee Tribe reservation shall be submitted by the respective tribal councils.

(b) The initial and subsequent nominations for appointment of members to represent the Ponca Tribe of Nebraska shall be made by the Tribal Council of the tribe.

(c) The initial and subsequent nominations for appointment of members representing the districts specified in subsection (2) of this section shall be made by separate panels comprised of five residents of each district. The composition and terms of membership on such panels shall be determined by the commission. Each panel shall be governed by rules and regulations established by the commission.

(d) Nominations for successors representing the cities of Lincoln and Omaha shall be governed by rules and regulations established by the commission to insure adequate representation for those American Indian residents of the respective cities.

(e) The initial and subsequent nominations for appointment of the member at large shall be governed by rules and regulations established by the commission to insure adequate representation for those Nebraska residents of American Indian ancestry not otherwise represented on the commission.

(f) Appointments for unexpired terms shall follow the same procedure as for initial and subsequent appointments. Voting members shall be eligible for reappointment.