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Key: (1) language to be deleted (2) new language

                            CHAPTER 126-S.F.No. 338 
                  An act relating to agriculture; changing limitations 
                  on ownership of agricultural land by corporations, 
                  limited liability companies, pension or investment 
                  funds, and limited partnerships; amending Minnesota 
                  Statutes 1996, section 500.24, subdivisions 2, 3, 3a, 
                  3b, and 4. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 1996, section 500.24, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DEFINITIONS.] For the purposes of this section, 
        the terms defined The definitions in this subdivision have the 
        meanings here given them: apply to this section. 
           (a) "Farming" means the production of (1) agricultural 
        products; (2) livestock or livestock products; (3) milk or milk 
        products; or (4) fruit or other horticultural products.  It does 
        not include the processing, refining, or packaging of said 
        products, nor the provision of spraying or harvesting services 
        by a processor or distributor of farm products.  It does not 
        include the production of timber or forest products or, the 
        production of poultry or poultry products, or the feeding and 
        caring for livestock that are delivered to a corporation for 
        slaughter or processing for up to 20 days before slaughter or 
        processing. 
           (b) "Family farm" means an unincorporated farming unit 
        owned by one or more persons residing on the farm or actively 
        engaging in farming. 
           (c) "Family farm corporation" means a corporation founded 
        for the purpose of farming and the ownership of agricultural 
        land in which the majority of the voting stock is held by and 
        the majority of the stockholders are persons or the spouses of 
        persons related to each other within the third degree of kindred 
        according to the rules of the civil law, and at least one of 
        said related persons is residing on or actively operating the 
        farm, and none of whose stockholders are corporations; provided 
        that a family farm corporation shall not cease to qualify as 
        such hereunder by reason of any devise or bequest of shares of 
        voting stock. 
           (d) "Authorized farm corporation" means a corporation 
        meeting the following standards under clause (1) or (2): 
           (1)(i) its it has no more than five shareholders do not 
        exceed five in number; 
           (ii) (2) all its shareholders, other than any estate, are 
        natural persons; 
           (iii) (3) it does not have more than one class of shares; 
        and 
           (iv) (4) its revenues revenue from rent, royalties, 
        dividends, interest, and annuities does not exceed 20 percent of 
        its gross receipts; and 
           (v) (5) shareholders holding 51 percent or more of the 
        interest in the corporation must be residing reside on the farm 
        or are actively engaging in farming; 
           (vi) the authorized farm corporation (6) it does not, 
        directly or indirectly, owns own or otherwise has have an 
        interest, whether legal, beneficial, or otherwise, in any title 
        to no more than 1,500 acres of real estate used for farming or 
        capable of being used for farming in this state agricultural 
        land; and 
           (vii) a shareholder of the authorized farm corporation is 
        not a shareholder (7) none of its shareholders are shareholders 
        in other authorized farm corporations that directly or 
        indirectly in combination with the authorized farm corporation 
        own not more than 1,500 acres of real estate used for farming or 
        capable of being used for farming in this state; or agricultural 
        land. 
           (2)(i) the corporation (e) "Authorized livestock farm 
        corporation" means a corporation formed for the production of 
        livestock and meeting the following standards: 
           (1) it is engaged in the production of livestock other than 
        dairy cattle; and not engaged in farming activities otherwise 
        prohibited under this section; 
           (ii) (2) all its shareholders, other than an any estate, 
        are natural persons or a family farm corporation corporations; 
           (iii) (3) it does not have more than one class of shares; 
           (iv) (4) its revenue from rent, royalties, dividends, 
        interest, and annuities does not exceed 20 percent of its gross 
        receipts; 
           (v) (5) shareholders holding 75 percent or more of the 
        control and, financial, and capital investment in the 
        corporation must be are farmers residing in Minnesota and at 
        least 51 percent of the required percentage of farmers must be 
        are actively engaged in livestock production; 
           (vi) the authorized farm corporation (6) it does not, 
        directly or indirectly, owns own or otherwise has have an 
        interest, whether legal, beneficial, or otherwise, in any title 
        to no more than 1,500 acres of real estate used for farming or 
        capable of being used for farming in this state agricultural 
        land; and 
           (vii) a shareholder of the authorized farm corporation is 
        not a shareholder (7) none of its shareholders are shareholders 
        in other authorized farm corporations that directly or 
        indirectly in combination with the authorized farm corporation 
        own not more than 1,500 acres of real estate used for farming or 
        capable of being used for farming in this state; and 
           (viii) the corporation was formed for the production of 
        livestock other than dairy cattle by natural persons or family 
        farm corporations that provide 75 percent or more of the capital 
        investment agricultural land. 
           (e) (f) "Agricultural land" means land real estate used for 
        farming or capable of being used for farming in this state. 
           (f) (g) "Pension or investment fund" means a pension or 
        employee welfare benefit fund, however organized, a mutual fund, 
        a life insurance company separate account, a common trust of a 
        bank or other trustee established for the investment and 
        reinvestment of money contributed to it, a real estate 
        investment trust, or an investment company as defined in United 
        States Code, title 15, section 80a-3.  "Pension or investment 
        fund" does not include a benevolent trust established by the 
        owners of a family farm, authorized farm corporation or family 
        farm corporation.  
           (g) (h) "Farm homestead" means a house including adjoining 
        buildings that has been used as part of a farming operation or 
        is part of the agricultural land used for a farming operation. 
           (h) (i) "Family farm partnership" means a limited 
        partnership formed for the purpose of farming and the ownership 
        of agricultural land in which the majority of the interests in 
        the partnership is held by and the majority of the partners are 
        persons or the spouses of persons related to each other within 
        the third degree of kindred according to the rules of the civil 
        law, and at least one of the related persons is residing on or 
        actively operating the farm, and none of the partners are 
        corporations.  A family farm partnership does not cease to 
        qualify as a family farm partnership because of a devise or 
        bequest of interest in the partnership.  
           (i) (j) "Authorized farm partnership" means a limited 
        partnership meeting the following standards:  
           (1) it has been issued a certificate from the secretary of 
        state or is registered with the county recorder and farming and 
        ownership of agricultural land is stated as a purpose or 
        character of the business; 
           (2) its no more than five partners do not exceed five in 
        number; 
           (3) all its partners, other than an any estate, are natural 
        persons; 
           (4) its revenues revenue from rent, royalties, dividends, 
        interest, and annuities do not exceed 20 percent of its gross 
        receipts; 
           (5) its general partners hold at least 51 percent of the 
        interest in the land assets of the partnership and reside on the 
        farm or are actively engaging in farming not more than 1,500 
        acres as a general partner in an authorized limited partnership; 
           (6) its limited partners do not participate in the business 
        of the limited partnership including operating, managing, or 
        directing management of farming operations; 
           (7) the authorized farm partnership it does not, directly 
        or indirectly, does not own or otherwise have an interest, 
        whether legal, beneficial, or otherwise, in a any title to more 
        than 1,500 acres of real estate used for farming or capable of 
        being used for farming in this state agricultural land; and 
           (8) a limited partner of the authorized farm partnership is 
        not a none of its limited partners are limited partner partners 
        in other authorized farm partnerships that directly or 
        indirectly in combination with the authorized farm partnership 
        own not more than 1,500 acres of real estate used for farming or 
        capable of being used for farming in this state agricultural 
        land.  
           (j) (k) "Farmer" means a natural person who regularly 
        participates in physical labor or operations management in 
        the farmer's person's farming operation and files "Schedule F" 
        as part of the person's annual Form 1040 filing with the United 
        States Internal Revenue Service. 
           (k) (l) "Actively engaged in livestock production" means 
        that a person performs performing day-to-day physical labor or 
        day-to-day operations management that significantly contributes 
        to livestock production and the functioning of a livestock 
        operation. 
           (m) "Research or experimental farm" means a corporation, 
        limited partnership, or pension or investment fund that owns or 
        operates agricultural land for research or experimental 
        purposes, provided that any commercial sales from the operation 
        are incidental to the research or experimental objectives of the 
        corporation.  A corporation, limited partnership, or pension or 
        investment fund seeking initial approval by the commissioner to 
        operate agricultural land for research or experimental purposes 
        must first submit to the commissioner a prospectus or proposal 
        of the intended method of operation containing information 
        required by the commissioner including a copy of any operational 
        contract with individual participants. 
           (n) "Breeding stock farm" means a corporation or limited 
        partnership that owns land for the purpose of raising breeding 
        stock, including embryos, for resale to farmers or for the 
        purpose of growing seed, wild rice, nursery plants, or sod.  An 
        entity that is organized to raise livestock other than dairy 
        cattle under this paragraph that does not qualify as an 
        authorized farm corporation must:  
           (1) sell all castrated animals to be fed out or finished to 
        farming operations that are neither directly nor indirectly 
        owned by the business entity operating the breeding stock 
        operation; and 
           (2) report its total production and sales annually to the 
        commissioner.  
           (o) "Aquatic farm" means a corporation or limited 
        partnership that owns or leases agricultural land as a necessary 
        part of an aquatic farm as defined in section 17.47, subdivision 
        3.  
           (p) "Religious farm" means a corporation formed primarily 
        for religious purposes whose sole income is derived from 
        agriculture.  
           (q) "Utility corporation" means a corporation regulated 
        under Minnesota Statutes 1974, chapter 216B, that owns 
        agricultural land for purposes described in that chapter, or an 
        electric generation or transmission cooperative that owns 
        agricultural land for use in its business if the land is not 
        used for farming except under lease to a family farm unit, a 
        family farm corporation, or a family farm partnership.  
           (r) "Benevolent trust" means a pension fund or family trust 
        established by the owners of a family farm, authorized farm 
        corporation, authorized livestock farm corporation, or family 
        farm corporation that holds an interest in title to agricultural 
        land on which one or more of those owners or shareholders have 
        resided or have been actively engaged in farming as required by 
        paragraph (b), (c), (d), or (e). 
           (s) "Development organization" means a corporation, limited 
        partnership, or pension or investment fund that owns 
        agricultural land for which the corporation, limited 
        partnership, or pension or investment fund has documented plans 
        to use and subsequently uses the land within six years from the 
        date of purchase for a specific nonfarming purpose, or if the 
        land is zoned nonagricultural, or if the land is located within 
        an incorporated area.  A corporation, limited partnership, or 
        pension or investment fund may hold agricultural land in the 
        amount necessary for its nonfarm business operation; provided, 
        however, that pending the development of agricultural land for 
        nonfarm purposes, the land may not be used for farming except 
        under lease to a family farm unit, a family farm corporation, an 
        authorized farm corporation, an authorized livestock farm 
        corporation, a family farm partnership, or an authorized farm 
        partnership, or except when controlled through ownership, 
        options, leaseholds, or other agreements by a corporation that 
        has entered into an agreement with the United States under the 
        New Community Act of 1968 (Title IV of the Housing and Urban 
        Development Act of 1968, United States Code, title 42, sections 
        3901 to 3914) as amended, or a subsidiary or assign of such a 
        corporation.  
           (t) "Exempt land" means agricultural land owned or leased 
        by a corporation as of May 20, 1973, agricultural land owned or 
        leased by a pension or investment fund as of May 12, 1981, or 
        agricultural land owned or leased by a limited partnership as of 
        May 1, 1988, including the normal expansion of that ownership at 
        a rate not to exceed 20 percent of the amount of land owned as 
        of May 20, 1973, for a corporation; May 12, 1981, for a pension 
        or investment fund; or May 1, 1988, for a limited partnership, 
        measured in acres, in any five-year period, and including 
        additional ownership reasonably necessary to meet the 
        requirements of pollution control rules.  A corporation, limited 
        partnership, or pension or investment fund that is eligible to 
        own or lease agricultural land under this section prior to May 
        1997 may continue to own or lease agricultural land subject to 
        the same conditions and limitations as previously allowed.  
           (u) "Gifted land" means agricultural land acquired as a 
        gift, either by grant or devise, by an educational, religious, 
        or charitable nonprofit corporation, limited partnership, or 
        pension or investment fund if all land so acquired is disposed 
        of within ten years after acquiring the title.  
           (v) "Repossessed land" means agricultural land acquired by 
        a corporation, limited partnership, or pension or investment 
        fund by process of law in the collection of debts, or by any 
        procedure for the enforcement of a lien or claim on the land, 
        whether created by mortgage or otherwise if all land so acquired 
        is disposed of within five years after acquiring the title.  The 
        five-year limitation is a covenant running with the title to the 
        land against any grantee, assignee, or successor of the pension 
        or investment fund, corporation, or limited partnership.  The 
        land so acquired must not be used for farming during the 
        five-year period, except under a lease to a family farm unit, a 
        family farm corporation, an authorized farm corporation, an 
        authorized livestock farm corporation, a family farm 
        partnership, or an authorized farm partnership.  Notwithstanding 
        the five-year divestiture requirement under this paragraph, a 
        financial institution may continue to own the agricultural land 
        if the agricultural land is leased to the immediately preceding 
        former owner, but must dispose of the agricultural land within 
        ten years of acquiring the title.  Livestock acquired by a 
        pension or investment fund, corporation, or limited partnership 
        in the collection of debts, or by a procedure for the 
        enforcement of lien or claim on the livestock whether created by 
        security agreement or otherwise after August 1, 1994, must be 
        sold or disposed of within one full production cycle for the 
        type of livestock acquired or 18 months after the livestock is 
        acquired, whichever is later.  
           (w) "Commissioner" means the commissioner of agriculture.  
           Sec. 2.  Minnesota Statutes 1996, section 500.24, 
        subdivision 3, is amended to read: 
           Subd. 3.  [FARMING AND OWNERSHIP OF AGRICULTURAL LAND BY 
        CORPORATIONS RESTRICTED.] No corporation, limited liability 
        company, pension or investment fund, or limited partnership 
        shall engage in farming; nor shall any corporation, limited 
        liability company, pension or investment fund, or limited 
        partnership, directly or indirectly, own, acquire, or otherwise 
        obtain an any interest, whether legal, beneficial or otherwise, 
        in any title to real estate used for farming or capable of being 
        used for farming in this state.  Livestock that are delivered 
        for slaughter or processing may be fed and cared for by a 
        corporation up to 20 days prior to slaughter or processing.  
        Provided, however, that the restrictions in this subdivision do 
        not apply to corporations or partnerships in clause (b) and do 
        not apply to corporations, limited partnerships, and pension or 
        investment funds that record its name and the particular 
        exception under clauses (a) to (s) under which the agricultural 
        land is owned or farmed, have a conservation plan prepared for 
        the agricultural land, report as required under subdivision 4, 
        and satisfy one of the following conditions under clauses (a) to 
        (s): in agricultural land other than a bona fide encumbrance 
        taken for purposes of security.  This subdivision does not apply 
        to general partnerships.  This subdivision does not apply to any 
        agricultural land, corporation, limited partnership, or pension 
        or investment fund that meet any of the definitions in 
        subdivision 2, paragraphs (b) to (e), (i), (j), and (m) to (v), 
        has a conservation plan prepared for the agricultural land, and 
        reports as required under subdivision 4. 
           (a) a bona fide encumbrance taken for purposes of security; 
           (b) a family farm corporation, an authorized farm 
        corporation, a family farm partnership, or an authorized farm 
        partnership as defined in subdivision 2 or a general 
        partnership; 
           (c) agricultural land and land capable of being used for 
        farming owned by a corporation as of May 20, 1973, or a pension 
        or investment fund as of May 12, 1981, including the normal 
        expansion of such ownership at a rate not to exceed 20 percent 
        of the amount of land owned as of May 20, 1973, or, in the case 
        of a pension or investment fund, as of May 12, 1981, measured in 
        acres, in any five-year period, and including additional 
        ownership reasonably necessary to meet the requirements of 
        pollution control rules; 
           (d) agricultural land operated for research or experimental 
        purposes with the approval of the commissioner of agriculture, 
        provided that any commercial sales from the operation must be 
        incidental to the research or experimental objectives of the 
        corporation.  A corporation, limited partnership, or pension or 
        investment fund seeking to operate agricultural land for 
        research or experimental purposes must submit to the 
        commissioner a prospectus or proposal of the intended method of 
        operation, containing information required by the commissioner 
        including a copy of any operational contract with individual 
        participants, prior to initial approval of an operation.  A 
        corporation, limited partnership, or pension or investment fund 
        operating agricultural land for research or experimental 
        purposes prior to May 1, 1988, must comply with all requirements 
        of this clause except the requirement for initial approval of 
        the project; 
           (e) agricultural land operated by a corporation or limited 
        partnership for the purpose of raising breeding stock, including 
        embryos, for resale to farmers or operated for the purpose of 
        growing seed, wild rice, nursery plants or sod.  An entity that 
        is organized to raise livestock other than dairy cattle under 
        this clause that does not meet the definition requirement for an 
        authorized farm corporation must: 
           (1) sell all castrated animals to be fed out or finished to 
        farming operations that are neither directly nor indirectly 
        owned by the business entity operating the breeding stock 
        operation; and 
           (2) report its total production and sales annually to the 
        commissioner of agriculture; 
           (f) agricultural land and land capable of being used for 
        farming leased by a corporation or limited partnership in an 
        amount, measured in acres, not to exceed the acreage under lease 
        to such corporation as of May 20, 1973, or to the limited 
        partnership as of May 1, 1988, and the additional acreage 
        required for normal expansion at a rate not to exceed 20 percent 
        of the amount of land leased as of May 20, 1973, for a 
        corporation or May 1, 1988, for a limited partnership in any 
        five-year period, and the additional acreage reasonably 
        necessary to meet the requirements of pollution control rules; 
           (g) agricultural land when acquired as a gift (either by 
        grant or a devise) by an educational, religious, or charitable 
        nonprofit corporation or by a pension or investment fund or 
        limited partnership; provided that all lands so acquired by a 
        pension or investment fund, and all lands so acquired by a 
        corporation or limited partnership which are not operated for 
        research or experimental purposes, or are not operated for the 
        purpose of raising breeding stock for resale to farmers or 
        operated for the purpose of growing seed, wild rice, nursery 
        plants or sod must be disposed of within ten years after 
        acquiring title thereto; 
           (h) agricultural land acquired by a pension or investment 
        fund or a corporation other than a family farm corporation or 
        authorized farm corporation, as defined in subdivision 2, or a 
        limited partnership other than a family farm partnership or 
        authorized farm partnership as defined in subdivision 2, for 
        which the corporation or limited partnership has documented 
        plans to use and subsequently uses the land within six years 
        from the date of purchase for a specific nonfarming purpose, or 
        if the land is zoned nonagricultural, or if the land is located 
        within an incorporated area.  A pension or investment fund or a 
        corporation or limited partnership may hold such agricultural 
        land in such acreage as may be necessary to its nonfarm business 
        operation; provided, however, that pending the development of 
        agricultural land for nonfarm purposes, such land may not be 
        used for farming except under lease to a family farm unit, a 
        family farm corporation, an authorized farm corporation, a 
        family farm partnership, or an authorized farm partnership, or 
        except when controlled through ownership, options, leaseholds, 
        or other agreements by a corporation which has entered into an 
        agreement with the United States of America pursuant to the New 
        Community Act of 1968 (Title IV of the Housing and Urban 
        Development Act of 1968, United States Code, title 42, sections 
        3901 to 3914) as amended, or a subsidiary or assign of such a 
        corporation; 
           (i) agricultural lands acquired by a pension or investment 
        fund or a corporation or limited partnership by process of law 
        in the collection of debts, or by any procedure for the 
        enforcement of a lien or claim thereon, whether created by 
        mortgage or otherwise; provided, however, that all lands so 
        acquired be disposed of within ten years after acquiring the 
        title if acquired before May 1, 1988, and five years after 
        acquiring the title if acquired on or after May 1, 1988, 
        acquiring the title thereto, and further provided that the land 
        so acquired shall not be used for farming during the ten-year or 
        five-year period except under a lease to a family farm unit, a 
        family farm corporation, an authorized farm corporation, a 
        family farm partnership, or an authorized farm partnership.  The 
        aforementioned ten-year or five-year limitation period shall be 
        deemed a covenant running with the title to the land against any 
        grantee, assignee, or successor of the pension or investment 
        fund, corporation, or limited partnership.  Notwithstanding the 
        five-year divestiture requirement under this clause, a financial 
        institution may continue to own the agricultural land if the 
        agricultural land is leased to the immediately preceding former 
        owner, but must divest of the agricultural land within the 
        ten-year period.  Livestock acquired by a pension or investment 
        fund, corporation, or limited partnership in the collection of 
        debts, or by a procedure for the enforcement of lien or claim on 
        the livestock whether created by security agreement or otherwise 
        after August 1, 1994, must be sold or disposed of within one 
        full production cycle for the type of livestock acquired or 18 
        months after the livestock is acquired, whichever is later; 
           (j) agricultural land acquired by a corporation regulated 
        under the provisions of Minnesota Statutes 1974, chapter 216B, 
        for purposes described in that chapter or by an electric 
        generation or transmission cooperative for use in its business, 
        provided, however, that such land may not be used for farming 
        except under lease to a family farm unit, a family farm 
        corporation, or a family farm partnership; 
           (k) agricultural land, either leased or owned, totaling no 
        more than 2,700 acres, acquired after May 20, 1973, for the 
        purpose of replacing or expanding asparagus growing operations, 
        provided that such corporation had established 2,000 acres of 
        asparagus production; 
           (l) all agricultural land or land capable of being used for 
        farming which was owned or leased by an authorized farm 
        corporation as defined in Minnesota Statutes 1974, section 
        500.24, subdivision 1, clause (d), but which does not qualify as 
        an authorized farm corporation as defined in subdivision 2, 
        clause (d); 
           (m) a corporation formed primarily for religious purposes 
        whose sole income is derived from agriculture; 
           (n) agricultural land owned or leased by a corporation 
        prior to August 1, 1975, which was exempted from the restriction 
        of this subdivision under the provisions of Laws 1973, chapter 
        427, including normal expansion of such ownership or leasehold 
        interest to be exercised at a rate not to exceed 20 percent of 
        the amount of land owned or leased on August 1, 1975, in any 
        five-year period and the additional ownership reasonably 
        necessary to meet requirements of pollution control rules; 
           (o) agricultural land owned or leased by a corporation 
        prior to August 1, 1978, including normal expansion of such 
        ownership or leasehold interest, to be exercised at a rate not 
        to exceed 20 percent of the amount of land owned or leased on 
        August 1, 1978, and the additional ownership reasonably 
        necessary to meet requirements of pollution control rules, 
        provided that nothing herein shall reduce any exemption 
        contained under the provisions of Laws 1975, chapter 324, 
        section 1, subdivision 2; 
           (p) an interest in the title to agricultural land acquired 
        by a pension fund or family trust established by the owners of a 
        family farm, authorized farm corporation or family farm 
        corporation, but limited to the farm on which one or more of 
        those owners or shareholders have resided or have been actively 
        engaged in farming as required by subdivision 2, clause (b), 
        (c), or (d); 
           (q) agricultural land owned by a nursing home located in a 
        city with a population, according to the state demographer's 
        1985 estimate, between 900 and 1,000, in a county with a 
        population, according to the state demographer's 1985 estimate, 
        between 18,000 and 19,000, if the land was given to the nursing 
        home as a gift with the expectation that it would not be sold 
        during the donor's lifetime.  This exemption is available until 
        July 1, 1995; 
           (r) the acreage of agricultural land and land capable of 
        being used for farming owned and recorded by an authorized farm 
        corporation as defined in Minnesota Statutes 1986, section 
        500.24, subdivision 2, paragraph (d), or a limited partnership 
        as of May 1, 1988, including the normal expansion of the 
        ownership at a rate not to exceed 20 percent of the land owned 
        and recorded as of May 1, 1988, measured in acres, in any 
        five-year period, and including additional ownership reasonably 
        necessary to meet the requirements of pollution control rules; 
           (s) agricultural land owned or leased as a necessary part 
        of an aquatic farm as defined in section 17.47, subdivision 3. 
           Sec. 3.  Minnesota Statutes 1996, section 500.24, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [LEASE AGREEMENT; CONSERVATION PRACTICE 
        PROTECTION CLAUSE.] A corporation, pension or investment fund, 
        or limited partnership, other than a family farm corporation, an 
        authorized farm corporation, an authorized livestock farm 
        corporation, a family farm partnership, or an authorized farm 
        partnership, when leasing farm land to a family farm unit, a 
        family farm corporation, an authorized farm corporation, an 
        authorized livestock farm corporation, a family farm 
        partnership, or an authorized farm partnership under provisions 
        of subdivision 3, clause (i) 2, paragraph (v), must include 
        within the lease agreement a provision prohibiting intentional 
        damage or destruction to a conservation practice on the 
        agricultural land. 
           Sec. 4.  Minnesota Statutes 1996, section 500.24, 
        subdivision 3b, is amended to read: 
           Subd. 3b.  [PROTECTION OF CONSERVATION PRACTICES.] If A 
        corporation, pension or investment fund, or limited partnership, 
        other than a family farm corporation, an authorized farm 
        corporation, an authorized livestock farm corporation, a family 
        farm partnership, or authorized farm partnership, which, during 
        the period of time it holds agricultural land under subdivision 
        3, clause (i) 2, paragraph (v), intentionally destroys a 
        conservation practice as defined in section 103F.401, 
        subdivision 3, to which the state has made a financial 
        contribution, the corporation, pension or investment fund, or 
        limited partnership must pay the commissioner of agriculture, 
        for deposit in the general fund, an amount equal to the state's 
        total contributions to that conservation practice plus interest 
        from the time of investment in the conservation practice.  
        Interest must be calculated at an annual percentage rate of 12 
        percent. 
           Sec. 5.  Minnesota Statutes 1996, section 500.24, 
        subdivision 4, is amended to read: 
           Subd. 4.  [REPORTS.] (a) The chief executive officer of 
        every pension or investment fund, corporation, or limited 
        partnership, except a family farm corporation or a family farm 
        limited partnership, that holds any interest in agricultural 
        land or land used for the breeding, feeding, pasturing, growing, 
        or raising of livestock, dairy or poultry, or products thereof, 
        or land used for the production of agricultural crops or fruit 
        or other horticultural products, other than a bona fide 
        encumbrance taken for purposes of security, or which is engaged 
        in farming or proposing to commence farming in this state after 
        May 20, 1973, shall file with the commissioner of agriculture a 
        report containing the following information and documents: 
           (1) the name of the pension or investment fund, 
        corporation, or limited partnership and its place of 
        incorporation, certification, or registration; 
           (2) the address of the pension or investment plan 
        headquarters or of the registered office of the corporation in 
        this state, the name and address of its registered agent in this 
        state and, in the case of a foreign corporation or limited 
        partnership, the address of its principal office in its place of 
        incorporation, certification, or registration; 
           (3) the acreage and location listed by quarter-quarter 
        section, township, and county of each lot or parcel 
        of agricultural land or land used for the keeping or feeding of 
        poultry in this state owned or leased by the pension or 
        investment fund, limited partnership, or corporation and used 
        for the growing of crops or the keeping or feeding of poultry or 
        livestock; 
           (4) the names and addresses of the officers, 
        administrators, directors, or trustees of the pension or 
        investment fund, or of the officers, shareholders owning more 
        than ten percent of the stock, including the percent of stock 
        owned by each such shareholder, and the members of the board of 
        directors of the corporation, and the general and limited 
        partners and the percentage of interest in the partnership by 
        each partner; 
           (5) the farm products which the pension or investment fund, 
        limited partnership, or corporation produces or intends to 
        produce on its agricultural land; 
           (6) with the first report, a copy of the title to the 
        property where the farming operations are or will occur 
        indicating the particular exception claimed under subdivision 3, 
        clauses (a) to (r); and 
           (7) with the first or second report, a copy of the 
        conservation plan proposed by the soil and water conservation 
        district, and with subsequent reports a statement of whether the 
        conservation plan was implemented. 
           The report of a corporation seeking to qualify hereunder as 
        a family farm corporation, an authorized farm corporation, an 
        authorized livestock farm corporation, a family farm 
        partnership, or authorized farm partnership shall contain the 
        following additional information:  the number of shares or the 
        partnership interests owned by persons residing on the farm or 
        actively engaged in farming, or their relatives within the third 
        degree of kindred according to the rules of the civil law or 
        their spouses; the name, address, and number of shares owned by 
        each shareholder or partnership interests owned by each partner; 
        and a statement as to percentage of gross receipts of the 
        corporation derived from rent, royalties, dividends, interest, 
        and annuities.  No pension or investment fund, limited 
        partnership, or corporation shall commence farming in this state 
        until the commissioner of agriculture has inspected the report 
        and certified that its proposed operations comply with the 
        provisions of this section. 
           (b) Every pension or investment fund, limited partnership, 
        or corporation as described in clause paragraph (a) shall, prior 
        to April 15 of each year, file with the commissioner of 
        agriculture a report containing the information required 
        in clause paragraph (a), based on its operations in the 
        preceding calendar year and its status at the end of the year.  
        A pension or investment fund, limited partnership, or 
        corporation that does not file the report by April 15 must pay a 
        $500 civil penalty.  The penalty is a lien on the land being 
        farmed under subdivision 3 until the penalty is paid. 
           (c) The commissioner or the commissioner's authorized 
        representative may enter into a written agreement with a person 
        required to file a report under this subdivision who, for good 
        cause shown, has failed issue a written waiver or reduction of 
        the civil penalty for failure to make a timely filing of the 
        annual report required by this subdivision.  An agreement must 
        be construed as a "no contest" pleading and may encompass a 
        reduction or waiver of the civil penalty for late filing.  The 
        agreement waiver or reduction is final and conclusive with 
        respect to the civil penalty, and may not be reopened or 
        modified by an officer, employee, or agent of the state, except 
        upon a showing of fraud or malfeasance or misrepresentation of a 
        material fact.  The matter agreed upon in the agreement may not 
        be reopened or modified by an officer, employee, or agent of the 
        state.  The report required under paragraph (b) must be 
        completed prior to a reduction or waiver under this 
        paragraph.  The commissioner may enter into an agreement under 
        this paragraph only once for each person required to file under 
        this subdivision.  The commissioner may enter into an agreement 
        under this paragraph only once for each corporation or 
        partnership. 
           (d) Failure to file a required report, or the willful 
        filing of false information, shall constitute is a gross 
        misdemeanor. 
           Sec. 6.  [RENUMBERING INSTRUCTION.] 
           The revisor of statutes shall renumber Minnesota Statutes, 
        section 500.24, subdivisions 6, 7, and 8 to be subdivisions 1, 
        2, and 3 of a new section 500.245 with the section heading 
        "RIGHT OF FIRST REFUSAL FOR AGRICULTURAL LAND" and correct all 
        references to those subdivisions in Minnesota Statutes and 
        Minnesota Rules. 
           Sec. 7.  [EFFECTIVE DATE.] 
           Sections 1 to 6 are effective the day after final enactment.
           Presented to the governor May 8, 1997 
           Signed by the governor May 9, 1997, 8:12 a.m.

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