Minnesota Session Laws - 1991, Regular Session

  

                         Laws of Minnesota 1991 

                        CHAPTER 263-H.F.No. 1371 
           An act relating to agriculture; abolishing the right 
          of first refusal of an immediately preceding former 
          owner who was a participant in the family farm 
          security program; extending the time period for 
          exercise of a right of first refusal in certain cases; 
          amending Minnesota Statutes 1990, section 500.24, 
          subdivision 6. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1990, section 500.24, 
subdivision 6, is amended to read: 
    Subd. 6.  [DISPOSAL OF LAND.] (a) A state or federal 
agency, limited partnership, or a corporation may not lease or 
sell agricultural land or a farm homestead before offering or 
making a good faith effort to offer the land for sale or lease 
to the immediately preceding former owner at a price no higher 
than the highest price offered by a third party that is 
acceptable to the seller or lessor.  The offer must be made on 
the notice to offer form under subdivision 7.  The requirements 
of this subdivision do not apply to a sale or lease by a 
corporation that is a family farm corporation or an authorized 
farm corporation or to a sale or lease by the commissioner of 
agriculture of property acquired by the state under the family 
farm security program under chapter 41.  This subdivision 
applies only to a sale or lease when the seller or lessor 
acquired the property by enforcing a debt against the 
agricultural land or farm homestead, including foreclosure of a 
mortgage, accepting a deed in lieu of foreclosure, terminating a 
contract for deed, or accepting a deed in lieu of terminating a 
contract for deed.  Selling or leasing property to a third party 
at a price is prima facie evidence that the price is acceptable 
to the seller or lessor.  The seller must provide written notice 
to the immediately preceding former owner that the agricultural 
land or farm homestead will be offered for sale at least 14 days 
before the agricultural land or farm homestead is offered for 
sale.  
     (b) An immediately preceding former owner is the entity 
with record legal title to the agricultural land or farm 
homestead before acquisition by the state or federal agency or 
corporation except:  if the immediately preceding former owner 
is a bankruptcy estate, the debtor in bankruptcy is the 
immediately preceding former owner; and if the agricultural land 
or farm homestead was acquired by termination of a contract for 
deed or deed in lieu of termination of a contract for deed, the 
immediately preceding former owner is the purchaser under the 
contract for deed.  For purposes of this subdivision, only a 
family farm, family farm corporation, or family farm partnership 
can be an immediately preceding former owner. 
     (c) An immediately preceding former owner may elect to 
purchase or lease the entire property or an agreed to portion of 
the property.  If the immediately preceding former owner elects 
to purchase or lease a portion of the property, the election 
must be reported in writing to the seller or lessor prior to the 
time the property is first offered for sale or lease.  If 
election is made to purchase or lease a portion of the property, 
the portion must be contiguous and compact so that it does not 
unreasonably reduce access to or the value of the remaining 
property. 
     (d) For purposes of this subdivision, the term "a price no 
higher than the highest price offered by a third party" means 
the acceptable cash price offered by a third party or the 
acceptable time-price offer made by a third party.  A cash price 
offer is one that involves simultaneous transfer of title for 
payment of the entire amount of the offer.  If the acceptable 
offer made by a third party is a time-price offer, the seller or 
lessor must make the same time-price offer or an equivalent cash 
offer to the immediately preceding former owner.  An equivalent 
cash offer is equal to the total of the payments made over a 
period of the time-price offer discounted by yield curve of the 
United States treasury notes and bonds of similar maturity on 
the first business day of the month in which the offer is 
personally delivered or mailed for time periods similar to the 
time period covered by the time-price offer, plus 2.0 percent.  
A time-price offer is an offer that is financed entirely or 
partially by the seller and includes an offer to purchase under 
a contract for deed or mortgage.  An equivalent cash offer is 
not required to be made if the state participates in an offer to 
a third party through the rural finance authority. 
      (e) This subdivision applies to a seller when the property 
is sold and to a lessor each time the property is leased, for 
five years the time period specified in subdivision 3, paragraph 
(i), after the agricultural land is acquired except:  
      (1) an offer to lease to the immediately preceding former 
owner is required only until the immediately preceding owner 
fails to accept an offer to lease the property or the property 
is sold; 
      (2) an offer to sell to the immediately preceding former 
owner is required until the property is sold; and 
      (3) if the immediately preceding former owner elects to 
lease or purchase a portion of the property, this subdivision 
does not apply to the seller with regard to the balance of the 
property after the election is made under paragraph (c).  
      (f) The notice of an offer under subdivision 7 that is 
personally delivered with a signed receipt or sent by certified 
mail with a receipt of mailing to the immediately preceding 
former owner's last known address is a good faith offer.  
      (g) This subdivision does not apply to a sale or lease that 
occurs after the seller or lessor has held the property for five 
years or longer the time period specified in subdivision 3, 
paragraph (i).  
      (h) For purposes of this subdivision, if the immediately 
preceding former owner is a bankruptcy estate the debtor in the 
bankruptcy is the immediately preceding owner.  
      (i) The immediately preceding former owner must exercise 
the right to lease all or a portion of the agricultural land or 
a homestead located on agricultural land in writing within 15 
days after an offer to lease under this subdivision is mailed 
with a receipt of mailing or personally delivered.  If election 
is made to lease only the homestead or a portion of the 
agricultural land, the portion to be leased must be clearly 
identified in writing.  The immediately preceding former owner 
must exercise the right to buy the agricultural land, a portion 
of the agricultural land, or a farm homestead located on 
agricultural land, in writing, within 65 days after an offer to 
buy under this subdivision is mailed with a receipt of mailing 
or is personally delivered.  Within ten days after exercising 
the right to lease or buy by accepting the offer, the 
immediately preceding owner must fully perform according to the 
terms of the offer including paying the amounts due.  A seller 
may sell and a lessor may lease the agricultural land or farm 
homestead subject to this subdivision to the third party in 
accordance with their lease or purchase agreement if: 
      (1) the immediately preceding former owner does not accept 
an offer to lease or buy before the offer terminates; or 
      (2) the immediately preceding former owner does not perform 
the obligations of the offer, including paying the amounts due, 
within ten days after accepting the offer. 
      (j) A certificate indicating whether or not the property 
contains agricultural land or a farm homestead that is signed by 
the county assessor where the property is located and recorded 
in the office of the county recorder or the registrar of titles 
where the property is located is prima facie evidence of whether 
the property is agricultural land or a farm homestead. 
      (k) As prima facie evidence that an offer to sell or lease 
agricultural land or a farm homestead has terminated, a receipt 
of mailing the notice under subdivision 7 and an affidavit, 
signed by a person authorized to act on behalf of a state, 
federal agency, or corporation selling or leasing the 
agricultural land or a farm homestead may be filed in the office 
of the county recorder or registrar of titles of the county 
where the agricultural land or farm homestead is located.  The 
affidavit must state that: 
      (1) notice of an offer to buy or lease the agricultural 
land or farm homestead was provided to the immediately preceding 
former owner at a price not higher than the highest price 
offered by a third party that is acceptable; 
      (2) the time during which the immediately preceding former 
owner is required to exercise the right to buy or lease the 
agricultural land or farm homestead has expired; 
      (3) the immediately preceding former owner has not 
exercised the right to buy or lease the agricultural land or 
farm homestead as provided in this subdivision or has accepted 
an offer and has not fully performed according to the terms of 
the offer; and 
      (4) the offer to the immediately preceding former owner has 
terminated. 
      (l) The right of an immediately preceding former owner to 
receive an offer to lease or purchase agricultural land under 
this subdivision or to lease or purchase at a price no higher 
than the highest price offered by a third party that is 
acceptable to the seller or lessor may be extinguished or 
limited by an express statement signed by the immediately 
preceding owner that complies with the plain language 
requirements of section 325G.31.  The right may not be 
extinguished or limited except by: 
      (1) an express statement in a deed in lieu of foreclosure 
of the agricultural land; 
      (2) an express statement in a deed in lieu of a termination 
of a contract for deed for the agricultural land; 
      (3) an express statement conveying the right to the state 
or federal agency or corporation owning the agricultural land 
that is required to make an offer under this subdivision; 
however, the preceding former owner may rescind the conveyance 
by notifying the state or federal agency or corporation in 
writing within 20 calendar days after signing the express 
statement; 
     (4) to cure a title defect, an express statement conveying 
the right may be made to a person to whom the agricultural land 
has been transferred by the state or federal agency or 
corporation; or 
     (5) an express statement conveying the right to a contract 
for deed vendee to whom the agricultural land or farm homestead 
was sold under a contract for deed by the immediately preceding 
former owner if the express statement and the contract for deed 
are recorded. 
     (m) The right of an immediately preceding former owner to 
receive an offer to lease or purchase agricultural land under 
this subdivision may not be assigned or transferred except as 
provided in paragraph (l), but may be inherited.  
     (n) An immediately preceding former owner, except a former 
owner who is actively engaged in farming as defined in 
subdivision 2, paragraph (a), and who agrees to remain actively 
engaged in farming on a portion of the agricultural land or farm 
homestead for at least one year after accepting an offer under 
this subdivision, may not sell agricultural land acquired by 
accepting an offer under this subdivision if the arrangement of 
the sale was negotiated or agreed to prior to the former owner 
accepting the offer under this subdivision.  A person who sells 
property in violation of this paragraph is liable for damages 
plus reasonable attorney fees to a person who is damaged by a 
sale in violation of this paragraph.  There is a rebuttable 
presumption that a sale by an immediately preceding former owner 
is in violation of this paragraph if the sale takes place within 
270 days of the former owner accepting the offer under this 
subdivision.  This paragraph does not apply to a sale by an 
immediately preceding former owner to the owner's spouse, the 
owner's parents, the owner's sisters and brothers, the owner's 
spouse's sisters and brothers, or the owner's children. 
     Sec. 2.  [EFFECTIVE DATE; APPLICATION.] 
    (a) Except as provided in paragraph (b), the amendments in 
section 1, paragraphs (e) and (g), are effective the day 
following final enactment and apply to the sale or lease of any 
property within the scope of that section, regardless of whether 
the right of first refusal expired under Minnesota Statutes 1990.
   (b) Section 1, paragraphs (e) and (g), do not revive an 
expired right of first refusal if the state or federal agency, 
limited partnership, or corporation sold or executed an 
agreement to sell the land before their effective date. 
    (c) The amendment in section 1, paragraph (a), applies to 
extinguish the right of first refusal, regardless of when the 
loan was made. 
    Presented to the governor May 29, 1991 
    Signed by the governor June 1, 1991, 3:27 p.m.