003.03A   The term RELATIVE shall apply to third degree relatives which include great grandparents, aunts and uncles, nieces and nephews, and great grandchildren.

003.03B   The term RELATIVE shall not apply to fourth degree relatives which include great, great grandparents, great aunts and uncles, first cousins, grand nieces and nephews and great, great grand children.

003.05   TOTAL FAMILY means the beginning farmer or livestock producer and his or her spouse and dependents.

003.06   VIABLY SIZED FARM means a farm or livestock production facility that has the potential to provide an adequate source of income to support the beginning farmer or livestock producer.

004.03   Is a resident of Nebraska as defined in Neb. Rev. Stat. §77-2714.01, who intends to rent or lease agricultural assets eligible for the Beginning Farmer Tax Credit on land located within the state borders of Nebraska;

004.04   Provides the majority of the day-to-day physical labor and management of the farm or livestock production;

004.05   Demonstrates, by the judgement of the Board, an adequate farming or livestock production experience, including, but not limited to one or more of the following:

004.05A   Growing up on or having been involved in the day-to-day operation of a farm or ranch; or

004.05B   Receiving an educational certificate or degree from a two or four year agriculture based program; or

004.05C   Having been employed by a farm or livestock business; or

004.05D   Possessing other agricultural experience as explained on the application.

004.07   Demonstrates a profit potential shown by:

004.07A   A current net worth statement as provided in subsection 004.01; and

004.07B   A cash flow analysis with a positive outcome which includes all farm and off farm income and expenses including any rented ground, facilities, livestock or other assets under the tax credit act and family living expenses as referred to in §§77-5209(4).

004.07B(1)   The cash flow analysis will be signed and dated (within twelve months of the application date) by the beginning farmer and a lawyer, banker, loan officer, or an accountant, who gives his or her title and states in writing that the information appears to be accurate; and

004.07B(2)   The Board has the authority to request an updated cash flow analysis.

004.08A   The beginning farmer or livestock producer will provide proof of completion of the financial management program;

004.08B   The Board may grant a waiver if:

004.08B(1)   The applicant shows he or she has recent equivalent education; or

004.08B(2)   A financial management program is not available within one hour's driving time; or

004.08C   A financial management program is not available before participation in the Act and the applicant has registered and plans to attend the next financial management program. If the planned class is not completed within one year of the application date, the Board will reconsider the eligibility of the beginning farmer or livestock producer at the next scheduled Board meeting.

004.10   The beginning farmer will not be a relative, as defined in subsection 003.03, of the owner of agricultural assets or the owner's partner, member, shareholder, or trustee in which the beginning farmer or livestock producer is seeking to enter into a rental agreement; and

004.11   A qualified beginning farmer or livestock producer who has participated in a Board approved and certified three-year rental agreement with an owner of agricultural assets shall not be eligible to file a subsequent application on that same asset with the Board. He or she may refer to the Board for additional support and participate in programs, including educational and financial programs and seminars, established or recommended by the Board that are applicable to the continued success of such farmer or livestock producer.

004.12   The Board agrees not to discriminate against any applicant on the basis of race, color, religion, national origin, sex or disability.

005.02A   Be a resident of the State of Nebraska;

005.02B   Have derived at least fifty percent of his or her income for income tax purposes from farming or livestock production over a period of at least five out of the last fifteen years; and

005.02C   Have provided at least fifty percent of the day-to-day physical labor and management of a farm over a period at of least five out of the last fifteen years.

005.03A   Have at least one general partner who is a resident of the State of Nebraska;

005.03B   Derive at least fifty percent of its income from farming or livestock production over a period of at least five out of the last fifteen years; and

005.03C   Have one or more partners who have provided at least fifty percent of the day-to-day physical labor and management of a farm over a period of at least five out of the last fifteen years to qualify for the granting of tax credits by the Board under the act.

005.05   The Board agrees not to discriminate against any applicant on the basis of race, color, religion, national origin, sex or disability.

006.03   The completed application forms as listed in subsection 006.01 may be submitted to the Beginning Farmer Program, Department of Agriculture, P.O. Box 94947, Lincoln, NE 68509-4947.

007.03   The Board will review the application packets from the beginning farmer and the owner of agricultural assets to determine the eligibility criteria;

007.03A   The Board may request additional information from the applicants and delay making a determination of eligibility until the added information is reviewed at the next board meeting;

007.03B   The Board will determine eligibility of the beginning farmer or livestock producer by a majority vote by the Board that states that the definition of the beginning farmer or livestock producer in subsection 003.02, the eligibility criteria in section 004 and the application packet and process in part 006.01A has been met and that he or she is qualified to participate in the Beginning Farmer Tax Credit Program;

007.03C   The Board will determine eligibility of the owner of agricultural assets by a majority vote by the Board that states that the definition of an owner of agricultural assets in section 77-5203 of the Beginning Farmer Tax Credit Act, the eligibility criteria in section 005 and the application packet and process in part 006.01B has been met and that he or she is qualified to participate in the Beginning Farmer Tax Credit Program;

007.03D   If the beginning farmer or livestock producer or the owner of agricultural assets application is denied, the Board will send a notice to the applicants by certified mail, which will include the reason for denial and describe the steps for appealing the decision.

007.03D(1)   The applicants may request a "reconsideration" mediation with the Board at their next scheduled meeting; or

007.03D(2)   The applicants may request an appeal following the mediation or chose to forgo the mediation step and go directly to appeal in accordance with the Administrative Procedure Act.

008.01   Beginning January 1, 2001, a qualified owner of agricultural assets shall be allowed a refundable tax credit, under the Internal Revenue Code of 1986, as amended, to be applied against the state income tax liability of such owner for agricultural assets leased or rented to a qualified beginning farmer or livestock producer. The credit allowed shall be for assets located in Nebraska;

008.02   The amount of annual tax credit for the owner of agricultural assets will be based on the rent received by the owner;

008.02A   Such assets shall be rented or leased at prevailing community rates as agreed to by the beginning farmer or livestock producer and the owner of the agricultural assets;

802.02B   The tax credit will be equal to five percent of;

008.02B(1)   The annual gross cash rental income paid by the beginning farmer or livestock producer to the owner of said assets; or

008.02B(2)   The approved cash equivalent of the annual share rental agreement as stated in a signed joint agreement which records the method of determining a fair and reasonable cash equivalent of the dollar amounts of the owner's portion of the share rental agreement as stated in divisions 006.01A(5)(b) and 006.01B(2)(b) to be paid each year for three years;

008.02C   If the Board does not approve the dollar amount as the cash equivalent of the share rental agreement, the beginning farmer and the owner of the agricultural assets may submit a new plan for approval or begin the appeal process in part 007.03D;

008.03A   A tax credit certificate will be completed by the Board and given to the Nebraska Department of Revenue each year of the lease or rental agreement;

008.03B   One copy of the certificate will be kept for the Beginning Farmer Program files, and two copies of the certificates will be mailed to the owner of the agricultural assets: one copy to be attached to his or her Nebraska income tax return and the other copy for their personal records;

008.03C   The tax credit shall be granted by the Department of Revenue when the agricultural asset owner files their annual Nebraska income tax return;

008.03D   A tax credit may be granted each year for a period of up to three years;

008.03D(1)   Each agricultural asset will not be rented or leased by the beginning farmer or livestock producer as part of the Beginning Farmer Tax Credit Act more than three years, except as allowed in section 009;

008.03D(2)   An owner of agricultural assets may receive a tax credit on more than one lease with different parties or with the same party during the same three year period;

008.03D(3)   An agricultural asset may receive tax credits from one to three years while being owned by one owner except as allowed in subsection 009.02; and

008.03D(4)   A qualified beginning farmer or livestock producer may be eligible to rent or lease more than one agricultural asset from one or more qualified owners of agricultural assets.

009.01   Quarterly, the Board will review the rental agreements between beginning farmers and owners of agricultural assets for tax credit certification;

009.02   Annually, during the last quarter before the end of the agricultural asset owner's tax year, the Board will certify or terminate by a majority vote, the tax credit eligibility as per sections 008 and 009 and sub section 004.11;

009.03   An owner of agricultural assets or qualified beginning farmer or livestock producer may terminate such agreement according to the terms of said contractual agreement or for reasonable cause. The agricultural owner's tax credit shall be affected as follows:

009.03A   The owner of the agricultural asset shall not be eligible for further credits on that particular asset unless the rental agreement is terminated prior to the end of the three-year period through no fault of the owner of agricultural asset;

009.03B   If the Board finds that such a termination was not the fault of the owner of agricultural assets, they may approve the owner for credits arising from a subsequent qualifying rental agreement with a different qualified beginning farmer or livestock producer;

009.03C   If an agreement is terminated without fault on the part of the owner of agricultural assets as determined by the Board, the tax credit shall not be retroactively disallowed;

009.03D   If an agreement is terminated with fault on the part of the owner of agricultural assets as determined by the Board, any prior tax credits claimed by such owner shall be disallowed and recaptured and shall be immediately due and payable to the State of Nebraska;

009.03E   If an agreement is terminated without fault on the part of the beginning farmer as determined by the Board, the beginning farmer who is eligible may rent or lease additional agricultural assets from the same or other eligible owner's of agricultural assets as part of the tax credit program; or

009.03F   Should an agricultural asset be sold during the 3 year term, the new owner and the rental agreement must qualify under the act in order for the tax credit to apply.

009.05   Allowable tax credit shall be distributed in the same manner as income is distributed to the partners, members, shareholders, or beneficiaries of a partnership, a corporation, a syndicate, or an estate or trust; and

009.06   If a dispute arises, the beginning farmer or livestock producer or the owner of the agricultural assets may voluntarily request mediation to determine a solution that is acceptable to both.