1.1                          A bill for an act 
  1.2             relating to family law; establishing provisions for 
  1.3             division of a family farm in a marriage dissolution; 
  1.4             proposing coding for new law in Minnesota Statutes, 
  1.5             chapter 518. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  [518.584] [DIVISION OF FAMILY FARM PROPERTY.] 
  1.8      Subdivision 1.  [DEFINITIONS.] (a) The definitions in this 
  1.9   subdivision apply to this section.  
  1.10     (b) "Family farm dissolution" means a marriage dissolution 
  1.11  involving spouses who: 
  1.12     (1) reside on a farm where they are actively engaged in 
  1.13  farming; 
  1.14     (2) derive the majority of their family income from the 
  1.15  farm activities; and 
  1.16     (3) meet the criteria in clauses (1) and (2): 
  1.17     (i) at the time the dissolution proceeding is commenced; or 
  1.18     (ii) at any time during the marriage, provided that one of 
  1.19  the spouses continues to meet the criteria in clauses (1) and 
  1.20  (2). 
  1.21     (c) "Farm property" means the real property, livestock, 
  1.22  including poultry, and equipment used in the farming activities 
  1.23  described in paragraph (b).  "Farm property" includes livestock 
  1.24  and equipment regardless of whether the real property where the 
  1.25  farming activity takes place is owned or leased by the spouses.  
  2.1      (d) "Farming" means the production of: 
  2.2      (1) agricultural products; 
  2.3      (2) livestock or livestock products; 
  2.4      (3) poultry or poultry products; 
  2.5      (4) milk or milk products; or 
  2.6      (5) fruit or other horticultural products.  
  2.7   "Farming" does not include the processing, refining, or 
  2.8   packaging of the products listed in clauses (1) to (5), nor the 
  2.9   provision of spraying or harvesting services by a processor or 
  2.10  distributor of farm products.  "Farming" does not include the 
  2.11  production of timber or forest products or the feeding and 
  2.12  caring for livestock that are delivered for slaughter or 
  2.13  processing for up to 20 days before slaughter or processing.  
  2.14     (e) "Farming spouse" means the spouse who continues to 
  2.15  reside on the farm under the terms of the judgment and decree.  
  2.16     (f) "Nonfarming spouse" means the spouse who receives the 
  2.17  interest in the farm property and a lien under subdivision 3.  
  2.18     Subd. 2.  [APPLICATION.] A party to a marriage dissolution 
  2.19  may request the court to apply this section in making a division 
  2.20  of farm property of the parties.  The court shall apply this 
  2.21  section if the party making the request establishes the 
  2.22  existence of a family farm dissolution and establishes that the 
  2.23  party reasonably intends to continue to meet the criteria under 
  2.24  subdivision 1, paragraph (b), clauses (1) and (2), after the 
  2.25  marriage is dissolved.  If the court determines that these 
  2.26  factors have been established, the court shall make findings and 
  2.27  an award of the property under subdivision 3.  
  2.28     Subd. 3.  [FINDINGS; AWARD.] (a) If the court awards a lien 
  2.29  interest to the nonfarming spouse, the court shall make specific 
  2.30  findings regarding:  
  2.31     (1) the current market value of the farm property; 
  2.32     (2) the current fair annual rental value of the farm 
  2.33  property; and 
  2.34     (3) the current amount of debt secured by the farm property.
  2.35     (b) The court shall award the farm property to the farming 
  2.36  spouse subject to the lien interest of the nonfarming spouse and 
  3.1   the conditions of this section.  The court may award the 
  3.2   nonfarming spouse an undivided interest in the farm property, 
  3.3   which must be expressed as an actual cash value, based on a 
  3.4   specified percentage of the current market value to which the 
  3.5   court determines the nonfarming spouse is entitled as part of 
  3.6   its division of the property under section 518.58.  The award 
  3.7   made under this paragraph is a lien that may be enforced only 
  3.8   when one or more of the conditions specified in subdivision 6 
  3.9   are met. 
  3.10     Subd. 4.  [PERIODIC PAYMENTS.] In addition to the award 
  3.11  made under subdivision 3, the court shall order the farming 
  3.12  spouse to make periodic payments in a specific dollar amount to 
  3.13  the nonfarming spouse.  The court shall specify the frequency 
  3.14  and timing of the payments, which must be at least twice a 
  3.15  year.  The total annual payments must equal the lesser of:  
  3.16     (1) interest on the actual cash value of the award made to 
  3.17  the nonfarming spouse under subdivision 3, paragraph (b), based 
  3.18  on the interest rate for judgments at the time of the award 
  3.19  under section 549.09; or 
  3.20     (2) a percentage of the fair annual rental value of the 
  3.21  farm property based on the specified percentage of the current 
  3.22  market value awarded to the nonfarming spouse under subdivision 
  3.23  3, paragraph (b).  
  3.24     Subd. 5.  [ACCELERATED PAYMENT OF LIEN.] (a) The farming 
  3.25  spouse may pay off the lien awarded to the nonfarming spouse 
  3.26  under subdivision 3 at any time by paying the greater of the 
  3.27  following, as determined by the court or agreed to by the 
  3.28  parties: 
  3.29     (1) the actual cash value of the lien originally set by the 
  3.30  court under subdivision 3, paragraph (b); or 
  3.31     (2) the amount under clause (1), plus a percentage of the 
  3.32  increase in the market value of the farm property from the 
  3.33  amount specified in the original judgment and decree until the 
  3.34  time the payoff amount is determined, equal to the percentage 
  3.35  interest of the nonfarming spouse originally specified by the 
  3.36  court under subdivision 3, paragraph (b). 
  4.1      (b) The farming spouse may make partial lien payments to 
  4.2   the nonfarming spouse.  If partial payments have been made, 
  4.3   these amounts must be credited toward any amount calculated 
  4.4   under paragraph (a) or subdivision 6.  
  4.5      Subd. 6.  [ENFORCEMENT OF LIEN.] The lien awarded to the 
  4.6   nonfarming spouse may be enforced by the court, which may 
  4.7   include a sale or partition of the farm property under section 
  4.8   518.65, if any of the following occur:  
  4.9      (1) the farming spouse is no longer residing on the farm 
  4.10  and actively engaged in farming and the use of the farm 
  4.11  property; 
  4.12     (2) the farming spouse sells or leases the farm real 
  4.13  property or sells or leases the farm equipment without investing 
  4.14  the proceeds for the continued operation of the farm; 
  4.15     (3) the farming spouse incurs additional debt on the farm 
  4.16  property that exceeds the amount of debt secured by the property 
  4.17  at the time of the judgment and decree; 
  4.18     (4) the farming spouse is at least 90 days in arrears for a 
  4.19  payment owed to the nonfarming spouse under subdivision 4; or 
  4.20     (5) at least 15 years have elapsed since entry of the 
  4.21  judgment and decree. 
  4.22     The amount of the lien must be calculated as provided in 
  4.23  subdivision 5, paragraph (a).