SF 2108

as introduced - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to agriculture; changing certain net worth 
  1.3             requirements; removing the dairy exclusion from the 
  1.4             definition of "authorized livestock farm corporation"; 
  1.5             providing for transfer of feedlot permits; providing a 
  1.6             livestock investment credit against income tax; 
  1.7             changing certain interim zoning and ordinance 
  1.8             provisions and clarifying their effect; amending 
  1.9             Minnesota Statutes 2002, sections 41B.03, subdivisions 
  1.10            2, 3; 41B.045, subdivision 2; 41C.02, subdivision 12; 
  1.11            116.07, by adding a subdivision; 116.0711; 290.06, by 
  1.12            adding a subdivision; 394.34; 462.355, subdivision 4; 
  1.13            500.24, subdivision 2. 
  1.14  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.15     Section 1.  Minnesota Statutes 2002, section 41B.03, 
  1.16  subdivision 2, is amended to read: 
  1.17     Subd. 2.  [ELIGIBILITY FOR RESTRUCTURED LOAN.] In addition 
  1.18  to the eligibility requirements of subdivision 1, a prospective 
  1.19  borrower for a restructured loan must:  
  1.20     (1) have received at least 50 percent of average annual 
  1.21  gross income from farming for the past three years or, for 
  1.22  homesteaded property, received at least 40 percent of average 
  1.23  gross income from farming in the past three years, and farming 
  1.24  must be the principal occupation of the borrower; 
  1.25     (2) have projected annual expenses, including operating 
  1.26  expenses, family living, and interest expenses after the 
  1.27  restructuring, that do not exceed 95 percent of the borrower's 
  1.28  projected annual income considering prior production history and 
  1.29  projected prices for farm production, except that the authority 
  2.1   may reduce the 95 percent requirement if it finds that other 
  2.2   significant factors in the loan application support the making 
  2.3   of the loan; 
  2.4      (3) demonstrate substantial difficulty in meeting projected 
  2.5   annual expenses without restructuring the loan; and 
  2.6      (4) have a total net worth, including assets and 
  2.7   liabilities of the borrower's spouse and dependents, of less 
  2.8   than $400,000 $660,000 in 1999 2004 and an amount in subsequent 
  2.9   years which is adjusted for inflation by 
  2.10  multiplying $400,000 that amount by the cumulative inflation 
  2.11  rate as determined by the United States All-Items Consumer Price 
  2.12  Index. 
  2.13     Sec. 2.  Minnesota Statutes 2002, section 41B.03, 
  2.14  subdivision 3, is amended to read: 
  2.15     Subd. 3.  [ELIGIBILITY FOR BEGINNING FARMER LOANS.] (a) In 
  2.16  addition to the requirements under subdivision 1, a prospective 
  2.17  borrower for a beginning farm loan in which the authority holds 
  2.18  an interest, must:  
  2.19     (1) have sufficient education, training, or experience in 
  2.20  the type of farming for which the loan is desired; 
  2.21     (2) have a total net worth, including assets and 
  2.22  liabilities of the borrower's spouse and dependents, of less 
  2.23  than $200,000 $405,000 in 1991 2004 and an amount in subsequent 
  2.24  years which is adjusted for inflation by 
  2.25  multiplying $200,000 that amount by the cumulative inflation 
  2.26  rate as determined by the United States All-Items Consumer Price 
  2.27  Index; 
  2.28     (3) demonstrate a need for the loan; 
  2.29     (4) demonstrate an ability to repay the loan; 
  2.30     (5) certify that the agricultural land to be purchased will 
  2.31  be used by the borrower for agricultural purposes; 
  2.32     (6) certify that farming will be the principal occupation 
  2.33  of the borrower; 
  2.34     (7) agree to participate in a farm management program 
  2.35  approved by the commissioner of agriculture for at least the 
  2.36  first three years of the loan, if an approved program is 
  3.1   available within 45 miles from the borrower's residence.  The 
  3.2   commissioner may waive this requirement for any of the programs 
  3.3   administered by the authority if the participant requests a 
  3.4   waiver and has either a four-year degree in an agricultural 
  3.5   program or certification as an adult farm management instructor; 
  3.6   and 
  3.7      (8) agree to file an approved soil and water conservation 
  3.8   plan with the Soil Conservation Service office in the county 
  3.9   where the land is located.  
  3.10     (b) If a borrower fails to participate under paragraph (a), 
  3.11  clause (7), the borrower is subject to penalty as determined by 
  3.12  the authority. 
  3.13     Sec. 3.  Minnesota Statutes 2002, section 41B.045, 
  3.14  subdivision 2, is amended to read: 
  3.15     Subd. 2.  [LOAN PARTICIPATION.] The authority may 
  3.16  participate in a livestock expansion loan with an eligible 
  3.17  lender to a livestock farmer who meets the requirements of 
  3.18  section 41B.03, subdivision 1, clauses (1) and (2), and who are 
  3.19  actively engaged in a livestock operation.  A prospective 
  3.20  borrower must have a total net worth, including assets and 
  3.21  liabilities of the borrower's spouse and dependents, of less 
  3.22  than $400,000 $660,000 in 1999 2004 and an amount in subsequent 
  3.23  years which is adjusted for inflation by 
  3.24  multiplying $400,000 that amount by the cumulative inflation 
  3.25  rate as determined by the United States All-Items Consumer Price 
  3.26  Index. 
  3.27     Participation is limited to 45 percent of the principal 
  3.28  amount of the loan or $250,000, whichever is less.  The interest 
  3.29  rates and repayment terms of the authority's participation 
  3.30  interest may be different from the interest rates and repayment 
  3.31  terms of the lender's retained portion of the loan.  
  3.32     Sec. 4.  Minnesota Statutes 2002, section 41C.02, 
  3.33  subdivision 12, is amended to read: 
  3.34     Subd. 12.  [LOW OR MODERATE NET WORTH.] "Low or moderate 
  3.35  net worth" means: 
  3.36     (1) for an individual, an aggregate net worth of the 
  4.1   individual and the individual's spouse and minor children of 
  4.2   less than $200,000 $405,000 in 1991 2004 and an amount in 
  4.3   subsequent years which is adjusted for inflation by 
  4.4   multiplying $200,000 that amount by the cumulative inflation 
  4.5   rate as determined by the United States All-Items Consumer Price 
  4.6   Index; or 
  4.7      (2) for a partnership, an aggregate net worth of all 
  4.8   partners, including each partner's net capital in the 
  4.9   partnership, and each partner's spouse and minor children of 
  4.10  less than $400,000 in 1991 and an amount in subsequent years 
  4.11  which is adjusted for inflation by multiplying $400,000 by the 
  4.12  cumulative inflation rate as determined by the United States 
  4.13  All-Items Consumer Price Index twice the amount set for an 
  4.14  individual in clause (1).  However, the aggregate net worth of 
  4.15  each partner and that partner's spouse and minor children may 
  4.16  not exceed $200,000 in 1991 and an amount in subsequent years 
  4.17  which is adjusted for inflation by multiplying $200,000 by the 
  4.18  cumulative inflation rate as determined by the United States 
  4.19  All-Items Consumer Price Index the amount set for an individual 
  4.20  in clause (1). 
  4.21     Sec. 5.  Minnesota Statutes 2002, section 116.07, is 
  4.22  amended by adding a subdivision to read: 
  4.23     Subd. 13.  [EFFECT OF INTERIM ZONING OR ORDINANCE.] If a 
  4.24  municipality adopts temporary interim zoning under section 
  4.25  394.34 or an interim ordinance under section 462.355, 
  4.26  subdivision 4, the zoning or ordinance does not apply to an 
  4.27  animal lot operation or proposed animal lot operation which has 
  4.28  already been granted a permit by the Pollution Control Agency or 
  4.29  a county or for which a permit application has been filed with 
  4.30  the Pollution Control Agency or county before the municipality 
  4.31  provided the required notice of adoption of the interim zoning 
  4.32  or ordinance. 
  4.33     Sec. 6.  Minnesota Statutes 2002, section 116.0711, is 
  4.34  amended to read: 
  4.35     116.0711 [FEEDLOT PERMIT CONDITIONS.] 
  4.36     (a) The agency shall not require feedlot permittees to 
  5.1   maintain records as to rainfall or snowfall as a condition of a 
  5.2   general feedlot permit if the owner directs the commissioner or 
  5.3   agent of the commissioner to appropriate data on precipitation 
  5.4   maintained by a government agency or educational institution. 
  5.5      (b) A feedlot permittee shall give notice to the agency 
  5.6   when the permittee proposes to transfer ownership or control of 
  5.7   the feedlot to a new party.  The feedlot permit is a property 
  5.8   right and the permit may be transferred to a new owner who buys 
  5.9   or inherits the feedlot operation unless good cause is shown for 
  5.10  revoking the permit.  The commissioner shall not unreasonably 
  5.11  withhold or unreasonably delay approval of any 
  5.12  transfer request.  This request transfer shall be handled in 
  5.13  accordance with sections 116.07 and 15.992. 
  5.14     (c) The Environmental Quality Board shall review and 
  5.15  recommend modifications to environmental review rules related to 
  5.16  phased actions and animal agriculture facilities.  The 
  5.17  Environmental Quality Board shall report recommendations to the 
  5.18  chairs of the committees of the senate and house of 
  5.19  representatives with jurisdiction over agriculture and the 
  5.20  environment by January 15, 2002. 
  5.21     (d) If the owner of an animal feedlot requests an extension 
  5.22  for an application for a National Pollutant Discharge 
  5.23  Elimination permit or state disposal system permit by June 1, 
  5.24  2001, then the agency shall grant an extension for the 
  5.25  application to September 1, 2001. 
  5.26     (e) An animal feedlot in shoreland that has been unused may 
  5.27  resume operation after obtaining a permit from the agency or 
  5.28  county, regardless of the number of years that the feedlot was 
  5.29  unused. 
  5.30     Sec. 7.  Minnesota Statutes 2002, section 290.06, is 
  5.31  amended by adding a subdivision to read: 
  5.32     Subd. 29.  [LIVESTOCK INVESTMENT CREDIT.] (a) A livestock 
  5.33  investment credit is allowed against the tax computed under this 
  5.34  section, based on the amount paid or incurred by the taxpayer 
  5.35  during the taxable year, equal to ten percent of the first 
  5.36  $750,000 of qualifying expenditures. 
  6.1      (b) "Livestock" has the meaning given in section 17A.03, 
  6.2   subdivision 5. 
  6.3      (c) "Qualifying expenditures" means for purposes of this 
  6.4   subdivision the amount spent for the acquisition, construction, 
  6.5   or improvement of buildings or facilities, or the acquisition of 
  6.6   equipment, for livestock housing, confinement, feeding, milk or 
  6.7   other product production, and waste management, including the 
  6.8   following, if related to livestock: 
  6.9      (1) barns; 
  6.10     (2) fences; 
  6.11     (3) watering facilities; 
  6.12     (4) feed storage and handling equipment; 
  6.13     (5) milking parlors; 
  6.14     (6) robotic equipment; 
  6.15     (7) scales; 
  6.16     (8) product storage facilities; 
  6.17     (9) bulk tanks; 
  6.18     (10) manure pumping and storage facilities; 
  6.19     (11) digesters; and 
  6.20     (12) equipment used to produce energy. 
  6.21  Qualified expenditures exclude any amounts deducted under 
  6.22  section 162 of the Internal Revenue Code in computing federal 
  6.23  taxable income. 
  6.24     (d) The credit is limited to the liability for tax, as 
  6.25  computed under this section for the taxable year.  If the amount 
  6.26  of the credit determined under this section for any taxable year 
  6.27  exceeds this limitation, the excess is a livestock investment 
  6.28  credit carryover to each of the 15 succeeding taxable years.  
  6.29  The entire amount of the excess unused credit for the taxable 
  6.30  year is carried first to the earliest of the taxable years to 
  6.31  which the credit may be carried and then to each successive year 
  6.32  to which the credit may be carried.  The amount of the unused 
  6.33  credit which may be added under this paragraph shall not exceed 
  6.34  the taxpayer's liability for tax less the livestock investment 
  6.35  credit for the taxable year. 
  6.36     (e) For a partnership or S corporation, the maximum amount 
  7.1   of the credit applies to the entity, not the individual partner 
  7.2   or shareholder. 
  7.3      [EFFECTIVE DATE.] This section is effective for taxable 
  7.4   years beginning after December 31, 2003. 
  7.5      Sec. 8.  Minnesota Statutes 2002, section 394.34, is 
  7.6   amended to read: 
  7.7      394.34 [INTERIM ZONING.] 
  7.8      If a county is conducting, or in good faith intends to 
  7.9   conduct studies within a reasonable time, or has held or is 
  7.10  holding a hearing for the purpose of considering a comprehensive 
  7.11  plan or official controls or an amendment, extension, or 
  7.12  addition to either, or in the event new territory for which no 
  7.13  zoning may have been adopted, may be annexed to a municipality, 
  7.14  the board in order to protect the public health, safety, and 
  7.15  general welfare may adopt as an emergency measure a temporary 
  7.16  interim zoning map or temporary interim zoning ordinance, the 
  7.17  purpose of which shall be to classify and regulate uses and 
  7.18  related matters as constitutes the emergency.  Such interim 
  7.19  resolution shall be limited to one year 180 days from the date 
  7.20  it becomes effective and to one year to renewal thereafter may 
  7.21  be renewed for an additional 180 days.  
  7.22     The board must provide at least two weeks public notice 
  7.23  before adopting or renewing an interim zoning map or ordinance 
  7.24  under this section. 
  7.25     Sec. 9.  Minnesota Statutes 2002, section 462.355, 
  7.26  subdivision 4, is amended to read: 
  7.27     Subd. 4.  [INTERIM ORDINANCE.] If a municipality is 
  7.28  conducting studies or has authorized a study to be conducted or 
  7.29  has held or has scheduled a hearing for the purpose of 
  7.30  considering adoption or amendment of a comprehensive plan or 
  7.31  official controls as defined in section 462.352, subdivision 15, 
  7.32  or if new territory for which plans or controls have not been 
  7.33  adopted is annexed to a municipality, the governing body of the 
  7.34  municipality may adopt an interim ordinance applicable to all or 
  7.35  part of its jurisdiction for the purpose of protecting the 
  7.36  planning process and the health, safety and welfare of its 
  8.1   citizens.  The interim ordinance may regulate, restrict or 
  8.2   prohibit any use, development, or subdivision within the 
  8.3   jurisdiction or a portion thereof for a period not to exceed one 
  8.4   year 180 days from the date it is effective, and may be extended 
  8.5   for such additional periods as the municipality may deem 
  8.6   appropriate, not exceeding a total additional period of 18 
  8.7   months 180 days.  No interim ordinance may halt, delay, or 
  8.8   impede a subdivision which has been given preliminary approval 
  8.9   prior to the effective date of the interim ordinance.  The 
  8.10  governing body of the municipality must provide at least two 
  8.11  weeks public notice before adopting or extending an interim 
  8.12  ordinance under this subdivision. 
  8.13     Sec. 10.  Minnesota Statutes 2002, section 500.24, 
  8.14  subdivision 2, is amended to read: 
  8.15     Subd. 2.  [DEFINITIONS.] The definitions in this 
  8.16  subdivision apply to this section. 
  8.17     (a) "Farming" means the production of (1) agricultural 
  8.18  products; (2) livestock or livestock products; (3) milk or milk 
  8.19  products; or (4) fruit or other horticultural products.  It does 
  8.20  not include the processing, refining, or packaging of said 
  8.21  products, nor the provision of spraying or harvesting services 
  8.22  by a processor or distributor of farm products.  It does not 
  8.23  include the production of timber or forest products, the 
  8.24  production of poultry or poultry products, or the feeding and 
  8.25  caring for livestock that are delivered to a corporation for 
  8.26  slaughter or processing for up to 20 days before slaughter or 
  8.27  processing. 
  8.28     (b) "Family farm" means an unincorporated farming unit 
  8.29  owned by one or more persons residing on the farm or actively 
  8.30  engaging in farming. 
  8.31     (c) "Family farm corporation" means a corporation founded 
  8.32  for the purpose of farming and the ownership of agricultural 
  8.33  land in which the majority of the stock is held by and the 
  8.34  majority of the stockholders are persons, the spouses of 
  8.35  persons, or current beneficiaries of one or more family farm 
  8.36  trusts in which the trustee holds stock in a family farm 
  9.1   corporation, related to each other within the third degree of 
  9.2   kindred according to the rules of the civil law, and at least 
  9.3   one of the related persons is residing on or actively operating 
  9.4   the farm, and none of whose stockholders are corporations; 
  9.5   provided that a family farm corporation shall not cease to 
  9.6   qualify as such hereunder by reason of any: 
  9.7      (1) transfer of shares of stock to a person or the spouse 
  9.8   of a person related within the third degree of kindred according 
  9.9   to the rules of civil law to the person making the transfer, or 
  9.10  to a family farm trust of which the shareholder, spouse, or 
  9.11  related person is a current beneficiary; or 
  9.12     (2) distribution from a family farm trust of shares of 
  9.13  stock to a beneficiary related within the third degree of 
  9.14  kindred according to the rules of civil law to a majority of the 
  9.15  current beneficiaries of the trust, or to a family farm trust of 
  9.16  which the shareholder, spouse, or related person is a current 
  9.17  beneficiary. 
  9.18     For the purposes of this section, a transfer may be made 
  9.19  with or without consideration, either directly or indirectly, 
  9.20  during life or at death, whether or not in trust, of the shares 
  9.21  in the family farm corporation, and stock owned by a family farm 
  9.22  trust are considered to be owned in equal shares by the current 
  9.23  beneficiaries. 
  9.24     (d) "Family farm trust" means: 
  9.25     (1) a trust in which: 
  9.26     (i) a majority of the current beneficiaries are persons or 
  9.27  spouses of persons who are related to each other within the 
  9.28  third degree of kindred according to the rules of civil law; 
  9.29     (ii) all of the current beneficiaries are natural persons 
  9.30  or nonprofit corporations or trusts described in the Internal 
  9.31  Revenue Code, section 170(c), as amended, and the regulations 
  9.32  under that section; and 
  9.33     (iii) one of the family member current beneficiaries is 
  9.34  residing on or actively operating the farm; or 
  9.35     (2) a charitable remainder trust as defined in the Internal 
  9.36  Revenue Code, section 664, as amended, and the regulations under 
 10.1   that section, and a charitable lead trust as set forth in the 
 10.2   Internal Revenue Code, section 170(f), and the regulations under 
 10.3   that section, if the lead period does not exceed ten years and 
 10.4   the majority of remainder beneficiaries are related to the 
 10.5   grantor within the third degree of kindred according to the 
 10.6   rules of civil law. 
 10.7      For the purposes of this section, if a distributee trust 
 10.8   becomes entitled to, or at the discretion of any person may 
 10.9   receive, a distribution from income or principal of a family 
 10.10  farm trust, then the distributee trust must independently 
 10.11  qualify as a family farm trust. 
 10.12     (e) "Authorized farm corporation" means a corporation 
 10.13  meeting the following standards: 
 10.14     (1) it has no more than five shareholders, provided that 
 10.15  for the purposes of this section, a husband and wife are 
 10.16  considered one shareholder; 
 10.17     (2) all its shareholders, other than any estate, are 
 10.18  natural persons; 
 10.19     (3) it does not have more than one class of shares; 
 10.20     (4) its revenue from rent, royalties, dividends, interest, 
 10.21  and annuities does not exceed 20 percent of its gross receipts; 
 10.22     (5) shareholders holding 51 percent or more of the interest 
 10.23  in the corporation reside on the farm or are actively engaging 
 10.24  in farming; 
 10.25     (6) it does not, directly or indirectly, own or otherwise 
 10.26  have an interest in any title to more than 1,500 acres of 
 10.27  agricultural land; and 
 10.28     (7) none of its shareholders are shareholders in other 
 10.29  authorized farm corporations that directly or indirectly in 
 10.30  combination with the corporation own more than 1,500 acres of 
 10.31  agricultural land. 
 10.32     (f) "Authorized livestock farm corporation" means a 
 10.33  corporation formed for the production of livestock and meeting 
 10.34  the following standards: 
 10.35     (1) it is engaged in the production of livestock other than 
 10.36  dairy cattle; 
 11.1      (2) all its shareholders, other than any estate, are 
 11.2   natural persons or family farm corporations; 
 11.3      (3) it does not have more than one class of shares; 
 11.4      (4) its revenue from rent, royalties, dividends, interest, 
 11.5   and annuities does not exceed 20 percent of its gross receipts; 
 11.6      (5) shareholders holding 75 percent or more of the control, 
 11.7   financial, and capital investment in the corporation are farmers 
 11.8   residing in Minnesota and at least 51 percent of the required 
 11.9   percentage of farmers are actively engaged in livestock 
 11.10  production; 
 11.11     (6) it does not, directly or indirectly, own or otherwise 
 11.12  have an interest in any title to more than 1,500 acres of 
 11.13  agricultural land; and 
 11.14     (7) none of its shareholders are shareholders in other 
 11.15  authorized farm corporations that directly or indirectly in 
 11.16  combination with the corporation own more than 1,500 acres of 
 11.17  agricultural land. 
 11.18     (g) "Agricultural land" means real estate used for farming 
 11.19  or capable of being used for farming in this state. 
 11.20     (h) "Pension or investment fund" means a pension or 
 11.21  employee welfare benefit fund, however organized, a mutual fund, 
 11.22  a life insurance company separate account, a common trust of a 
 11.23  bank or other trustee established for the investment and 
 11.24  reinvestment of money contributed to it, a real estate 
 11.25  investment trust, or an investment company as defined in United 
 11.26  States Code, title 15, section 80a-3.  
 11.27     (i) "Farm homestead" means a house including adjoining 
 11.28  buildings that has been used as part of a farming operation or 
 11.29  is part of the agricultural land used for a farming operation. 
 11.30     (j) "Family farm partnership" means a limited partnership 
 11.31  formed for the purpose of farming and the ownership of 
 11.32  agricultural land in which the majority of the interests in the 
 11.33  partnership is held by and the majority of the partners are 
 11.34  persons, the spouses of persons, or current beneficiaries of one 
 11.35  or more family farm trusts in which the trustee holds an 
 11.36  interest in a family farm partnership related to each other 
 12.1   within the third degree of kindred according to the rules of the 
 12.2   civil law, at least one of the related persons is residing on 
 12.3   the farm, actively operating the farm, or the agricultural land 
 12.4   was owned by one or more of the related persons for a period of 
 12.5   five years before its transfer to the limited partnership, and 
 12.6   none of the partners are corporations.  A family farm 
 12.7   partnership does not cease to qualify as a family farm 
 12.8   partnership because of a: 
 12.9      (1) transfer of a partnership interest to a person or 
 12.10  spouse of a person related within the third degree of kindred 
 12.11  according to the rules of civil law to the person making the 
 12.12  transfer or to a family farm trust of which the partner, spouse, 
 12.13  or related person is a current beneficiary; or 
 12.14     (2) distribution from a family farm trust of a partnership 
 12.15  interest to a beneficiary related within the third degree of 
 12.16  kindred according to the rules of civil law to a majority of the 
 12.17  current beneficiaries of the trust, or to a family farm trust of 
 12.18  which the partner, spouse, or related person is a current 
 12.19  beneficiary. 
 12.20     For the purposes of this section, a transfer may be made 
 12.21  with or without consideration, either directly or indirectly, 
 12.22  during life or at death, whether or not in trust, of a 
 12.23  partnership interest in the family farm partnership, and 
 12.24  interest owned by a family farm trust is considered to be owned 
 12.25  in equal shares by the current beneficiaries. 
 12.26     (k) "Authorized farm partnership" means a limited 
 12.27  partnership meeting the following standards:  
 12.28     (1) it has been issued a certificate from the secretary of 
 12.29  state or is registered with the county recorder and farming and 
 12.30  ownership of agricultural land is stated as a purpose or 
 12.31  character of the business; 
 12.32     (2) it has no more than five partners; 
 12.33     (3) all its partners, other than any estate, are natural 
 12.34  persons; 
 12.35     (4) its revenue from rent, royalties, dividends, interest, 
 12.36  and annuities does not exceed 20 percent of its gross receipts; 
 13.1      (5) its general partners hold at least 51 percent of the 
 13.2   interest in the land assets of the partnership and reside on the 
 13.3   farm or are actively engaging in farming not more than 1,500 
 13.4   acres as a general partner in an authorized limited partnership; 
 13.5      (6) its limited partners do not participate in the business 
 13.6   of the limited partnership including operating, managing, or 
 13.7   directing management of farming operations; 
 13.8      (7) it does not, directly or indirectly, own or otherwise 
 13.9   have an interest in any title to more than 1,500 acres of 
 13.10  agricultural land; and 
 13.11     (8) none of its limited partners are limited partners in 
 13.12  other authorized farm partnerships that directly or indirectly 
 13.13  in combination with the partnership own more than 1,500 acres of 
 13.14  agricultural land.  
 13.15     (l) "Family farm limited liability company" means a limited 
 13.16  liability company founded for the purpose of farming and the 
 13.17  ownership of agricultural land in which the majority of the 
 13.18  membership interests are held by and the majority of the members 
 13.19  are persons or the spouses of persons, or current beneficiaries 
 13.20  of one or more family farm trusts in which the trustee holds 
 13.21  stock in a family farm limited liability company related to each 
 13.22  other within the third degree of kindred according to the rules 
 13.23  of the civil law, at least one of the related persons is 
 13.24  actively operating the farm, and none of the members are 
 13.25  corporations or limited liability companies.  A family farm 
 13.26  limited liability company does not cease to qualify as a family 
 13.27  farm limited liability company because of: 
 13.28     (1) a transfer of a membership interest to a person or 
 13.29  spouse of a person related within the third degree of kindred 
 13.30  according to the rules of civil law to the person making the 
 13.31  transfer or to a family farm trust of which the member, spouse, 
 13.32  or related person is a current beneficiary; or 
 13.33     (2) distribution from a family farm trust of a membership 
 13.34  interest to a beneficiary related within the third degree of 
 13.35  kindred according to the rules of civil law to a majority of the 
 13.36  current beneficiaries of the trust, or to a family farm trust of 
 14.1   which the member, spouse, or related person is a current 
 14.2   beneficiary. 
 14.3      For the purposes of this section, a transfer may be made 
 14.4   with or without consideration, either directly or indirectly, 
 14.5   during life or at death, whether or not in trust, of a 
 14.6   membership interest in the family farm limited liability 
 14.7   company, and interest owned by a family farm trust is considered 
 14.8   to be owned in equal shares by the current beneficiaries.  
 14.9   Except for a state or federally chartered financial institution 
 14.10  acquiring an encumbrance for the purpose of security or an 
 14.11  interest under paragraph (x), a member of a family farm limited 
 14.12  liability company may not transfer a membership interest, 
 14.13  including a financial interest, to a person who is not otherwise 
 14.14  eligible to be a member under this paragraph. 
 14.15     (m) "Authorized farm limited liability company" means a 
 14.16  limited liability company meeting the following standards: 
 14.17     (1) it has no more than five members; 
 14.18     (2) all its members, other than any estate, are natural 
 14.19  persons; 
 14.20     (3) it does not have more than one class of membership 
 14.21  interests; 
 14.22     (4) its revenue from rent, royalties, dividends, interest, 
 14.23  and annuities does not exceed 20 percent of its gross receipts; 
 14.24     (5) members holding 51 percent or more of both the 
 14.25  governance rights and financial rights in the limited liability 
 14.26  company reside on the farm or are actively engaged in farming; 
 14.27     (6) it does not, directly or indirectly, own or otherwise 
 14.28  have an interest in any title to more than 1,500 acres of 
 14.29  agricultural land; and 
 14.30     (7) none of its members are members in other authorized 
 14.31  farm limited liability companies that directly or indirectly in 
 14.32  combination with the authorized farm limited liability company 
 14.33  own more than 1,500 acres of agricultural land. 
 14.34     Except for a state or federally chartered financial 
 14.35  institution acquiring an encumbrance for the purpose of security 
 14.36  or an interest under paragraph (x), a member of an authorized 
 15.1   farm limited liability company may not transfer a membership 
 15.2   interest, including a financial interest, to a person who is not 
 15.3   otherwise eligible to be a member under this paragraph. 
 15.4      (n) "Farmer" means a natural person who regularly 
 15.5   participates in physical labor or operations management in the 
 15.6   person's farming operation and files "Schedule F" as part of the 
 15.7   person's annual Form 1040 filing with the United States Internal 
 15.8   Revenue Service. 
 15.9      (o) "Actively engaged in livestock production" means 
 15.10  performing day-to-day physical labor or day-to-day operations 
 15.11  management that significantly contributes to livestock 
 15.12  production and the functioning of a livestock operation. 
 15.13     (p) "Research or experimental farm" means a corporation, 
 15.14  limited partnership, pension, investment fund, or limited 
 15.15  liability company that owns or operates agricultural land for 
 15.16  research or experimental purposes, provided that any commercial 
 15.17  sales from the operation are incidental to the research or 
 15.18  experimental objectives of the corporation.  A corporation, 
 15.19  limited partnership, limited liability company, or pension or 
 15.20  investment fund seeking initial approval by the commissioner to 
 15.21  operate agricultural land for research or experimental purposes 
 15.22  must first submit to the commissioner a prospectus or proposal 
 15.23  of the intended method of operation containing information 
 15.24  required by the commissioner including a copy of any operational 
 15.25  contract with individual participants. 
 15.26     (q) "Breeding stock farm" means a corporation, limited 
 15.27  partnership, or limited liability company, that owns or operates 
 15.28  agricultural land for the purpose of raising breeding stock, 
 15.29  including embryos, for resale to farmers or for the purpose of 
 15.30  growing seed, wild rice, nursery plants, or sod.  An entity that 
 15.31  is organized to raise livestock other than dairy cattle under 
 15.32  this paragraph that does not qualify as an authorized farm 
 15.33  corporation must:  
 15.34     (1) sell all castrated animals to be fed out or finished to 
 15.35  farming operations that are neither directly nor indirectly 
 15.36  owned by the business entity operating the breeding stock 
 16.1   operation; and 
 16.2      (2) report its total production and sales annually to the 
 16.3   commissioner.  
 16.4      (r) "Aquatic farm" means a corporation, limited 
 16.5   partnership, or limited liability company, that owns or leases 
 16.6   agricultural land as a necessary part of an aquatic farm as 
 16.7   defined in section 17.47, subdivision 3.  
 16.8      (s) "Religious farm" means a corporation formed primarily 
 16.9   for religious purposes whose sole income is derived from 
 16.10  agriculture.  
 16.11     (t) "Utility corporation" means a corporation regulated 
 16.12  under Minnesota Statutes 1974, chapter 216B, that owns 
 16.13  agricultural land for purposes described in that chapter, or an 
 16.14  electric generation or transmission cooperative that owns 
 16.15  agricultural land for use in its business if the land is not 
 16.16  used for farming except under lease to a family farm unit, a 
 16.17  family farm corporation, a family farm trust, a family farm 
 16.18  partnership, or a family farm limited liability company.  
 16.19     (u) "Development organization" means a corporation, limited 
 16.20  partnership, limited liability company, or pension or investment 
 16.21  fund that has an interest in agricultural land for which the 
 16.22  corporation, limited partnership, limited liability company, or 
 16.23  pension or investment fund has documented plans to use and 
 16.24  subsequently uses the land within six years from the date of 
 16.25  purchase for a specific nonfarming purpose, or if the land is 
 16.26  zoned nonagricultural, or if the land is located within an 
 16.27  incorporated area.  A corporation, limited partnership, limited 
 16.28  liability company, or pension or investment fund may hold 
 16.29  agricultural land in the amount necessary for its nonfarm 
 16.30  business operation; provided, however, that pending the 
 16.31  development of agricultural land for nonfarm purposes, the land 
 16.32  may not be used for farming except under lease to a family farm 
 16.33  unit, a family farm corporation, a family farm trust, an 
 16.34  authorized farm corporation, an authorized livestock farm 
 16.35  corporation, a family farm partnership, an authorized farm 
 16.36  partnership, a family farm limited liability company, or an 
 17.1   authorized farm limited liability company, or except when 
 17.2   controlled through ownership, options, leaseholds, or other 
 17.3   agreements by a corporation that has entered into an agreement 
 17.4   with the United States under the New Community Act of 1968 
 17.5   (Title IV of the Housing and Urban Development Act of 1968, 
 17.6   United States Code, title 42, sections 3901 to 3914) as amended, 
 17.7   or a subsidiary or assign of such a corporation.  
 17.8      (v) "Exempt land" means agricultural land owned or leased 
 17.9   by a corporation as of May 20, 1973, agricultural land owned or 
 17.10  leased by a pension or investment fund as of May 12, 1981, 
 17.11  agricultural land owned or leased by a limited partnership as of 
 17.12  May 1, 1988, or agricultural land owned or leased by a trust as 
 17.13  of the effective date of Laws 2000, chapter 477, including the 
 17.14  normal expansion of that ownership at a rate not to exceed 20 
 17.15  percent of the amount of land owned as of May 20, 1973, for a 
 17.16  corporation; May 12, 1981, for a pension or investment fund; May 
 17.17  1, 1988, for a limited partnership, or the effective date of 
 17.18  Laws 2000, chapter 477, for a trust, measured in acres, in any 
 17.19  five-year period, and including additional ownership reasonably 
 17.20  necessary to meet the requirements of pollution control rules.  
 17.21  A corporation, limited partnership, or pension or investment 
 17.22  fund that is eligible to own or lease agricultural land under 
 17.23  this section prior to May 1997, or a corporation that is 
 17.24  eligible to own or lease agricultural land as a benevolent trust 
 17.25  under this section prior to the effective date of Laws 2000, 
 17.26  chapter 477, may continue to own or lease agricultural land 
 17.27  subject to the same conditions and limitations as previously 
 17.28  allowed.  
 17.29     (w) "Gifted land" means agricultural land acquired as a 
 17.30  gift, either by grant or devise, by an educational, religious, 
 17.31  or charitable nonprofit corporation, limited partnership, 
 17.32  limited liability company, or pension or investment fund if all 
 17.33  land so acquired is disposed of within ten years after acquiring 
 17.34  the title.  
 17.35     (x) "Repossessed land" means agricultural land acquired by 
 17.36  a corporation, limited partnership, limited liability company, 
 18.1   or pension or investment fund by process of law in the 
 18.2   collection of debts, or by any procedure for the enforcement of 
 18.3   a lien or claim on the land, whether created by mortgage or 
 18.4   otherwise if all land so acquired is disposed of within five 
 18.5   years after acquiring the title.  The five-year limitation is a 
 18.6   covenant running with the title to the land against any grantee, 
 18.7   assignee, or successor of the pension or investment fund, 
 18.8   corporation, limited partnership, or limited liability company.  
 18.9   The land so acquired must not be used for farming during the 
 18.10  five-year period, except under a lease to a family farm unit, a 
 18.11  family farm corporation, an authorized farm corporation, an 
 18.12  authorized livestock farm corporation, a family farm 
 18.13  partnership, an authorized farm partnership, a family farm 
 18.14  limited liability company, or an authorized farm limited 
 18.15  liability company.  Notwithstanding the five-year divestiture 
 18.16  requirement under this paragraph, a financial institution may 
 18.17  continue to own the agricultural land if the agricultural land 
 18.18  is leased to the immediately preceding former owner, but must 
 18.19  dispose of the agricultural land within ten years of acquiring 
 18.20  the title.  Livestock acquired by a pension or investment fund, 
 18.21  corporation, limited partnership, or limited liability company 
 18.22  in the collection of debts, or by a procedure for the 
 18.23  enforcement of lien or claim on the livestock whether created by 
 18.24  security agreement or otherwise after August 1, 1994, must be 
 18.25  sold or disposed of within one full production cycle for the 
 18.26  type of livestock acquired or 18 months after the livestock is 
 18.27  acquired, whichever is earlier.  
 18.28     (y) "Commissioner" means the commissioner of agriculture.  
 18.29     (z) "Nonprofit corporation" means a nonprofit corporation 
 18.30  organized under state nonprofit corporation law or qualified for 
 18.31  tax-exempt status under federal tax law that uses the land for a 
 18.32  specific nonfarming purpose or leases the agricultural land to a 
 18.33  family farm unit, a family farm corporation, an authorized farm 
 18.34  corporation, an authorized livestock farm corporation, a family 
 18.35  farm limited liability company, an authorized farm limited 
 18.36  liability company, a family farm partnership, or an authorized 
 19.1   farm partnership. 
 19.2      (aa) "Current beneficiary" means a person who at any time 
 19.3   during a year is entitled to, or at the discretion of any person 
 19.4   may, receive a distribution from the income or principal of the 
 19.5   trust.  It does not include a distributee trust, other than a 
 19.6   trust described in section 170(c) of the Internal Revenue Code, 
 19.7   as amended, but does include the current beneficiaries of the 
 19.8   distributee trust.  It does not include a person in whose favor 
 19.9   a power of appointment could be exercised until the holder of 
 19.10  the power of appointment actually exercises the power of 
 19.11  appointment in that person's favor.  It does not include a 
 19.12  person who is entitled to receive a distribution only after a 
 19.13  specified time or upon the occurrence of a specified event until 
 19.14  the time or occurrence of the event.  For the purposes of this 
 19.15  section, a distributee trust is a current beneficiary of a 
 19.16  family farm trust. 
 19.17     (bb) "De minimis" means that any corporation, pension or 
 19.18  investment fund, limited liability company, or limited 
 19.19  partnership that directly or indirectly owns, acquires, or 
 19.20  otherwise obtains any interest in 40 acres or less of 
 19.21  agricultural land and annually receives less than $150 per acre 
 19.22  in gross revenue from rental or agricultural production.