SF 1445

as introduced - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to agriculture; modifying the definition of 
  1.3             family farm partnership; amending Minnesota Statutes 
  1.4             1996, section 500.24, subdivision 2. 
  1.5   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.6      Section 1.  Minnesota Statutes 1996, section 500.24, 
  1.7   subdivision 2, is amended to read: 
  1.8      Subd. 2.  [DEFINITIONS.] For the purposes of this section, 
  1.9   the terms defined in this subdivision have the meanings here 
  1.10  given them: 
  1.11     (a) "Farming" means the production of (1) agricultural 
  1.12  products; (2) livestock or livestock products; (3) milk or milk 
  1.13  products; or (4) fruit or other horticultural products.  It does 
  1.14  not include the processing, refining, or packaging of said 
  1.15  products, nor the provision of spraying or harvesting services 
  1.16  by a processor or distributor of farm products.  It does not 
  1.17  include the production of timber or forest products or the 
  1.18  production of poultry or poultry products. 
  1.19     (b) "Family farm" means an unincorporated farming unit 
  1.20  owned by one or more persons residing on the farm or actively 
  1.21  engaging in farming. 
  1.22     (c) "Family farm corporation" means a corporation founded 
  1.23  for the purpose of farming and the ownership of agricultural 
  1.24  land in which the majority of the voting stock is held by and 
  1.25  the majority of the stockholders are persons or the spouses of 
  2.1   persons related to each other within the third degree of kindred 
  2.2   according to the rules of the civil law, and at least one of 
  2.3   said related persons is residing on or actively operating the 
  2.4   farm, and none of whose stockholders are corporations; provided 
  2.5   that a family farm corporation shall not cease to qualify as 
  2.6   such hereunder by reason of any devise or bequest of shares of 
  2.7   voting stock. 
  2.8      (d) "Authorized farm corporation" means a corporation 
  2.9   meeting the following standards under clause (1) or (2): 
  2.10     (1)(i) its shareholders do not exceed five in number; 
  2.11     (ii) all its shareholders, other than any estate are 
  2.12  natural persons; 
  2.13     (iii) it does not have more than one class of shares; and 
  2.14     (iv) its revenues from rent, royalties, dividends, interest 
  2.15  and annuities does not exceed 20 percent of its gross receipts; 
  2.16  and 
  2.17     (v) shareholders holding 51 percent or more of the interest 
  2.18  in the corporation must be residing on the farm or actively 
  2.19  engaging in farming; 
  2.20     (vi) the authorized farm corporation, directly or 
  2.21  indirectly, owns or otherwise has an interest, whether legal, 
  2.22  beneficial, or otherwise, in any title to no more than 1,500 
  2.23  acres of real estate used for farming or capable of being used 
  2.24  for farming in this state; and 
  2.25     (vii) a shareholder of the authorized farm corporation is 
  2.26  not a shareholder in other authorized farm corporations that 
  2.27  directly or indirectly in combination with the authorized farm 
  2.28  corporation own not more than 1,500 acres of real estate used 
  2.29  for farming or capable of being used for farming in this state; 
  2.30  or 
  2.31     (2)(i) the corporation is engaged in the production of 
  2.32  livestock other than dairy cattle; and not engaged in farming 
  2.33  activities otherwise prohibited under this section; 
  2.34     (ii) all its shareholders other than an estate, are natural 
  2.35  persons or a family farm corporation; 
  2.36     (iii) it does not have more than one class of shares; 
  3.1      (iv) its revenue from rent, royalties, dividends, interest 
  3.2   and annuities does not exceed 20 percent of its gross receipts; 
  3.3      (v) shareholders holding 75 percent or more of the control 
  3.4   and financial investment in the corporation must be farmers 
  3.5   residing in Minnesota and at least 51 percent of the required 
  3.6   percentage of farmers must be actively engaged in livestock 
  3.7   production; 
  3.8      (vi) the authorized farm corporation, directly or 
  3.9   indirectly, owns or otherwise has an interest, whether legal, 
  3.10  beneficial, or otherwise, in any title to no more than 1,500 
  3.11  acres of real estate used for farming or capable of being used 
  3.12  for farming in this state; 
  3.13     (vii) a shareholder of the authorized farm corporation is 
  3.14  not a shareholder in other authorized farm corporations that 
  3.15  directly or indirectly in combination with the authorized farm 
  3.16  corporation own not more than 1,500 acres of real estate used 
  3.17  for farming or capable of being used for farming in this state; 
  3.18  and 
  3.19     (viii) the corporation was formed for the production of 
  3.20  livestock other than dairy cattle by natural persons or family 
  3.21  farm corporations that provide 75 percent or more of the capital 
  3.22  investment. 
  3.23     (e) "Agricultural land" means land used for farming. 
  3.24     (f) "Pension or investment fund" means a pension or 
  3.25  employee welfare benefit fund, however organized, a mutual fund, 
  3.26  a life insurance company separate account, a common trust of a 
  3.27  bank or other trustee established for the investment and 
  3.28  reinvestment of money contributed to it, a real estate 
  3.29  investment trust, or an investment company as defined in United 
  3.30  States Code, title 15, section 80a-3.  "Pension or investment 
  3.31  fund" does not include a benevolent trust established by the 
  3.32  owners of a family farm, authorized farm corporation or family 
  3.33  farm corporation.  
  3.34     (g) "Farm homestead" means a house including adjoining 
  3.35  buildings that has been used as part of a farming operation or 
  3.36  is part of the agricultural land used for a farming operation. 
  4.1      (h) "Family farm partnership" means a limited partnership 
  4.2   formed for the purpose of farming and the ownership of 
  4.3   agricultural land in which the majority of the interests in the 
  4.4   partnership is held by and the majority of the partners are 
  4.5   persons or the spouses of persons related to each other within 
  4.6   the third degree of kindred according to the rules of the civil 
  4.7   law, none of the partners are corporations, and: 
  4.8      (1) at least one of the related persons is residing on or 
  4.9   the farm; 
  4.10     (2) at least one of the related persons is actively 
  4.11  operating the farm, and none of the partners are corporations; 
  4.12  or 
  4.13     (3) the agricultural land owned by the limited partnership 
  4.14  was, before its transfer to the limited partnership, owned by 
  4.15  one or more of the related persons for a period of five years. 
  4.16     A family farm partnership does not cease to qualify as a 
  4.17  family farm partnership because of a devise or bequest of 
  4.18  interest in the partnership.  
  4.19     (i) "Authorized farm partnership" means a limited 
  4.20  partnership meeting the following standards:  
  4.21     (1) it has been issued a certificate from the secretary of 
  4.22  state or is registered with the county recorder and farming and 
  4.23  ownership of agricultural land is stated as a purpose or 
  4.24  character of the business; 
  4.25     (2) its partners do not exceed five in number; 
  4.26     (3) all its partners, other than an estate, are natural 
  4.27  persons; 
  4.28     (4) its revenues from rent, royalties, dividends, interest, 
  4.29  and annuities do not exceed 20 percent of its gross receipts; 
  4.30     (5) its general partners hold at least 51 percent of the 
  4.31  interest in the land assets of the partnership and reside on the 
  4.32  farm or are actively engaging in farming not more than 1,500 
  4.33  acres as a general partner in an authorized limited partnership; 
  4.34     (6) its limited partners do not participate in the business 
  4.35  of the limited partnership including operating, managing, or 
  4.36  directing management of farming operations; 
  5.1      (7) the authorized farm partnership, directly or 
  5.2   indirectly, does not own or otherwise have an interest, whether 
  5.3   legal, beneficial, or otherwise, in a title to more than 1,500 
  5.4   acres of real estate used for farming or capable of being used 
  5.5   for farming in this state; and 
  5.6      (8) a limited partner of the authorized farm partnership is 
  5.7   not a limited partner in other authorized farm partnerships that 
  5.8   directly or indirectly in combination with the authorized farm 
  5.9   partnership own not more than 1,500 acres of real estate used 
  5.10  for farming or capable of being used for farming in this state.  
  5.11     (j) "Farmer" means a person who regularly participates in 
  5.12  physical labor or operations management in the farmer's farming 
  5.13  operation and files "Schedule F" as part of the person's annual 
  5.14  Form 1040 filing with the United States Internal Revenue Service.
  5.15     (k) "Actively engaged in livestock production" means that a 
  5.16  person performs day-to-day physical labor or day-to-day 
  5.17  operations management that significantly contributes to 
  5.18  livestock production and the functioning of a livestock 
  5.19  operation.