1.1                          A bill for an act 
  1.2             relating to agriculture; removing limitations on 
  1.3             ownership and use of agricultural lands by limited 
  1.4             liability companies; amending Minnesota Statutes 1994, 
  1.5             section 500.24, subdivision 3. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 1994, section 500.24, 
  1.8   subdivision 3, is amended to read: 
  1.9      Subd. 3.  [FARMING AND OWNERSHIP OF AGRICULTURAL LAND BY 
  1.10  CORPORATIONS RESTRICTED.] No corporation, limited liability 
  1.11  company, pension or investment fund, or limited partnership 
  1.12  shall engage in farming; nor shall any corporation, limited 
  1.13  liability company, pension or investment fund, or limited 
  1.14  partnership, directly or indirectly, own, acquire, or otherwise 
  1.15  obtain an interest, whether legal, beneficial or otherwise, in 
  1.16  any title to real estate used for farming or capable of being 
  1.17  used for farming in this state.  Livestock that are delivered 
  1.18  for slaughter or processing may be fed and cared for by a 
  1.19  corporation up to 20 days prior to slaughter or processing.  
  1.20  Provided, however, that the restrictions in this subdivision do 
  1.21  not apply to corporations or partnerships in clause (b) and do 
  1.22  not apply to corporations, limited partnerships, and pension or 
  1.23  investment funds that record its name and the particular 
  1.24  exception under clauses (a) to (s) under which the agricultural 
  1.25  land is owned or farmed, have a conservation plan prepared for 
  2.1   the agricultural land, report as required under subdivision 4, 
  2.2   and satisfy one of the following conditions under clauses (a) to 
  2.3   (s): 
  2.4      (a) a bona fide encumbrance taken for purposes of security; 
  2.5      (b) a family farm corporation, an authorized farm 
  2.6   corporation, a family farm partnership, or an authorized farm 
  2.7   partnership as defined in subdivision 2 or a general 
  2.8   partnership; 
  2.9      (c) agricultural land and land capable of being used for 
  2.10  farming owned by a corporation as of May 20, 1973, or a pension 
  2.11  or investment fund as of May 12, 1981, including the normal 
  2.12  expansion of such ownership at a rate not to exceed 20 percent 
  2.13  of the amount of land owned as of May 20, 1973, or, in the case 
  2.14  of a pension or investment fund, as of May 12, 1981, measured in 
  2.15  acres, in any five-year period, and including additional 
  2.16  ownership reasonably necessary to meet the requirements of 
  2.17  pollution control rules; 
  2.18     (d) agricultural land operated for research or experimental 
  2.19  purposes with the approval of the commissioner of agriculture, 
  2.20  provided that any commercial sales from the operation must be 
  2.21  incidental to the research or experimental objectives of the 
  2.22  corporation.  A corporation, limited partnership, or pension or 
  2.23  investment fund seeking to operate agricultural land for 
  2.24  research or experimental purposes must submit to the 
  2.25  commissioner a prospectus or proposal of the intended method of 
  2.26  operation, containing information required by the commissioner 
  2.27  including a copy of any operational contract with individual 
  2.28  participants, prior to initial approval of an operation.  A 
  2.29  corporation, limited partnership, or pension or investment fund 
  2.30  operating agricultural land for research or experimental 
  2.31  purposes prior to May 1, 1988, must comply with all requirements 
  2.32  of this clause except the requirement for initial approval of 
  2.33  the project; 
  2.34     (e) agricultural land operated by a corporation or limited 
  2.35  partnership for the purpose of raising breeding stock, including 
  2.36  embryos, for resale to farmers or operated for the purpose of 
  3.1   growing seed, wild rice, nursery plants or sod.  An entity that 
  3.2   is organized to raise livestock other than dairy cattle under 
  3.3   this clause that does not meet the definition requirement for an 
  3.4   authorized farm corporation must: 
  3.5      (1) sell all castrated animals to be fed out or finished to 
  3.6   farming operations that are neither directly nor indirectly 
  3.7   owned by the business entity operating the breeding stock 
  3.8   operation; and 
  3.9      (2) report its total production and sales annually to the 
  3.10  commissioner of agriculture; 
  3.11     (f) agricultural land and land capable of being used for 
  3.12  farming leased by a corporation or limited partnership in an 
  3.13  amount, measured in acres, not to exceed the acreage under lease 
  3.14  to such corporation as of May 20, 1973, or to the limited 
  3.15  partnership as of May 1, 1988, and the additional acreage 
  3.16  required for normal expansion at a rate not to exceed 20 percent 
  3.17  of the amount of land leased as of May 20, 1973, for a 
  3.18  corporation or May 1, 1988, for a limited partnership in any 
  3.19  five-year period, and the additional acreage reasonably 
  3.20  necessary to meet the requirements of pollution control rules; 
  3.21     (g) agricultural land when acquired as a gift (either by 
  3.22  grant or a devise) by an educational, religious, or charitable 
  3.23  nonprofit corporation or by a pension or investment fund or 
  3.24  limited partnership; provided that all lands so acquired by a 
  3.25  pension or investment fund, and all lands so acquired by a 
  3.26  corporation or limited partnership which are not operated for 
  3.27  research or experimental purposes, or are not operated for the 
  3.28  purpose of raising breeding stock for resale to farmers or 
  3.29  operated for the purpose of growing seed, wild rice, nursery 
  3.30  plants or sod must be disposed of within ten years after 
  3.31  acquiring title thereto; 
  3.32     (h) agricultural land acquired by a pension or investment 
  3.33  fund or a corporation other than a family farm corporation or 
  3.34  authorized farm corporation, as defined in subdivision 2, or a 
  3.35  limited partnership other than a family farm partnership or 
  3.36  authorized farm partnership as defined in subdivision 2, for 
  4.1   which the corporation or limited partnership has documented 
  4.2   plans to use and subsequently uses the land within six years 
  4.3   from the date of purchase for a specific nonfarming purpose, or 
  4.4   if the land is zoned nonagricultural, or if the land is located 
  4.5   within an incorporated area.  A pension or investment fund or a 
  4.6   corporation or limited partnership may hold such agricultural 
  4.7   land in such acreage as may be necessary to its nonfarm business 
  4.8   operation; provided, however, that pending the development of 
  4.9   agricultural land for nonfarm purposes, such land may not be 
  4.10  used for farming except under lease to a family farm unit, a 
  4.11  family farm corporation, an authorized farm corporation, a 
  4.12  family farm partnership, or an authorized farm partnership, or 
  4.13  except when controlled through ownership, options, leaseholds, 
  4.14  or other agreements by a corporation which has entered into an 
  4.15  agreement with the United States of America pursuant to the New 
  4.16  Community Act of 1968 (Title IV of the Housing and Urban 
  4.17  Development Act of 1968, United States Code, title 42, sections 
  4.18  3901 to 3914) as amended, or a subsidiary or assign of such a 
  4.19  corporation; 
  4.20     (i) agricultural lands acquired by a pension or investment 
  4.21  fund or a corporation or limited partnership by process of law 
  4.22  in the collection of debts, or by any procedure for the 
  4.23  enforcement of a lien or claim thereon, whether created by 
  4.24  mortgage or otherwise; provided, however, that all lands so 
  4.25  acquired be disposed of within ten years after acquiring the 
  4.26  title if acquired before May 1, 1988, and five years after 
  4.27  acquiring the title if acquired on or after May 1, 1988, 
  4.28  acquiring the title thereto, and further provided that the land 
  4.29  so acquired shall not be used for farming during the ten-year or 
  4.30  five-year period except under a lease to a family farm unit, a 
  4.31  family farm corporation, an authorized farm corporation, a 
  4.32  family farm partnership, or an authorized farm partnership.  The 
  4.33  aforementioned ten-year or five-year limitation period shall be 
  4.34  deemed a covenant running with the title to the land against any 
  4.35  grantee, assignee, or successor of the pension or investment 
  4.36  fund, corporation, or limited partnership.  Notwithstanding the 
  5.1   five-year divestiture requirement under this clause, a financial 
  5.2   institution may continue to own the agricultural land if the 
  5.3   agricultural land is leased to the immediately preceding former 
  5.4   owner, but must divest of the agricultural land within the 
  5.5   ten-year period.  Livestock acquired by a pension or investment 
  5.6   fund, corporation, or limited partnership in the collection of 
  5.7   debts, or by a procedure for the enforcement of lien or claim on 
  5.8   the livestock whether created by security agreement or otherwise 
  5.9   after August 1, 1994, must be sold or disposed of within one 
  5.10  full production cycle for the type of livestock acquired or 18 
  5.11  months after the livestock is acquired, whichever is later; 
  5.12     (j) agricultural land acquired by a corporation regulated 
  5.13  under the provisions of Minnesota Statutes 1974, chapter 216B, 
  5.14  for purposes described in that chapter or by an electric 
  5.15  generation or transmission cooperative for use in its business, 
  5.16  provided, however, that such land may not be used for farming 
  5.17  except under lease to a family farm unit, a family farm 
  5.18  corporation, or a family farm partnership; 
  5.19     (k) agricultural land, either leased or owned, totaling no 
  5.20  more than 2,700 acres, acquired after May 20, 1973, for the 
  5.21  purpose of replacing or expanding asparagus growing operations, 
  5.22  provided that such corporation had established 2,000 acres of 
  5.23  asparagus production; 
  5.24     (l) all agricultural land or land capable of being used for 
  5.25  farming which was owned or leased by an authorized farm 
  5.26  corporation as defined in Minnesota Statutes 1974, section 
  5.27  500.24, subdivision 1, clause (d), but which does not qualify as 
  5.28  an authorized farm corporation as defined in subdivision 2, 
  5.29  clause (d); 
  5.30     (m) a corporation formed primarily for religious purposes 
  5.31  whose sole income is derived from agriculture; 
  5.32     (n) agricultural land owned or leased by a corporation 
  5.33  prior to August 1, 1975, which was exempted from the restriction 
  5.34  of this subdivision under the provisions of Laws 1973, chapter 
  5.35  427, including normal expansion of such ownership or leasehold 
  5.36  interest to be exercised at a rate not to exceed 20 percent of 
  6.1   the amount of land owned or leased on August 1, 1975, in any 
  6.2   five-year period and the additional ownership reasonably 
  6.3   necessary to meet requirements of pollution control rules; 
  6.4      (o) agricultural land owned or leased by a corporation 
  6.5   prior to August 1, 1978, including normal expansion of such 
  6.6   ownership or leasehold interest, to be exercised at a rate not 
  6.7   to exceed 20 percent of the amount of land owned or leased on 
  6.8   August 1, 1978, and the additional ownership reasonably 
  6.9   necessary to meet requirements of pollution control rules, 
  6.10  provided that nothing herein shall reduce any exemption 
  6.11  contained under the provisions of Laws 1975, chapter 324, 
  6.12  section 1, subdivision 2; 
  6.13     (p) an interest in the title to agricultural land acquired 
  6.14  by a pension fund or family trust established by the owners of a 
  6.15  family farm, authorized farm corporation or family farm 
  6.16  corporation, but limited to the farm on which one or more of 
  6.17  those owners or shareholders have resided or have been actively 
  6.18  engaged in farming as required by subdivision 2, clause (b), 
  6.19  (c), or (d); 
  6.20     (q) agricultural land owned by a nursing home located in a 
  6.21  city with a population, according to the state demographer's 
  6.22  1985 estimate, between 900 and 1,000, in a county with a 
  6.23  population, according to the state demographer's 1985 estimate, 
  6.24  between 18,000 and 19,000, if the land was given to the nursing 
  6.25  home as a gift with the expectation that it would not be sold 
  6.26  during the donor's lifetime.  This exemption is available until 
  6.27  July 1, 1995; 
  6.28     (r) the acreage of agricultural land and land capable of 
  6.29  being used for farming owned and recorded by an authorized farm 
  6.30  corporation as defined in Minnesota Statutes 1986, section 
  6.31  500.24, subdivision 2, paragraph (d), or a limited partnership 
  6.32  as of May 1, 1988, including the normal expansion of the 
  6.33  ownership at a rate not to exceed 20 percent of the land owned 
  6.34  and recorded as of May 1, 1988, measured in acres, in any 
  6.35  five-year period, and including additional ownership reasonably 
  6.36  necessary to meet the requirements of pollution control rules; 
  7.1      (s) agricultural land owned or leased as a necessary part 
  7.2   of an aquatic farm as defined in section 17.47, subdivision 3. 
  7.3      Sec. 2.  [EFFECTIVE DATE.] 
  7.4      Section 1 is effective the date following final enactment.