1.1                          A bill for an act 
  1.2             relating to agriculture; changing the corporate and 
  1.3             partnership farming law; amending Minnesota Statutes 
  1.4             1998, section 500.24, subdivisions 4 and 5; Minnesota 
  1.5             Statutes 1999 Supplement, section 500.24, subdivisions 
  1.6             2 and 3. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 1999 Supplement, section 
  1.9   500.24, subdivision 2, is amended to read: 
  1.10     Subd. 2.  [DEFINITIONS.] The definitions in this 
  1.11  subdivision apply to this section. 
  1.12     (a) "Farming" means the production of (1) agricultural 
  1.13  products; (2) livestock or livestock products; (3) milk or milk 
  1.14  products; or (4) fruit or other horticultural products.  It does 
  1.15  not include the processing, refining, or packaging of said 
  1.16  products, nor the provision of spraying or harvesting services 
  1.17  by a processor or distributor of farm products.  It does not 
  1.18  include the production of timber or forest products, the 
  1.19  production of poultry or poultry products, or the feeding and 
  1.20  caring for livestock that are delivered to a corporation for 
  1.21  slaughter or processing for up to 20 days before slaughter or 
  1.22  processing. 
  1.23     (b) "Family farm" means an unincorporated farming unit 
  1.24  owned by one or more persons residing on the farm or actively 
  1.25  engaging in farming. 
  1.26     (c) "Family farm corporation" means a corporation founded 
  2.1   for the purpose of farming and the ownership of agricultural 
  2.2   land in which the majority of the ~~voting~~ stock is held by and 
  2.3   the majority of the stockholders are persons ~~or~~, the spouses of 
  2.4   persons, or current beneficiaries of one or more family farm 
  2.5   trusts in which the trustee holds stock in a family farm 
  2.6   corporation, related to each other within the third degree of 
  2.7   kindred according to the rules of the civil law, and at least 
  2.8   one of said related persons is residing on or actively operating 
  2.9   the farm, and none of whose stockholders are corporations; 
  2.10  provided that a family farm corporation shall not cease to 
  2.11  qualify as such hereunder by reason of any ~~devise or bequest~~: 
  2.12     (1) transfer of shares of ~~voting~~ stock to a person or the 
  2.13  spouse of a person related within the third degree of kindred 
  2.14  according to the rules of civil law to the person making the 
  2.15  transfer, or to a family farm trust of which the shareholder, 
  2.16  spouse, or related person is a current beneficiary; or 
  2.17     (2) distribution from a family farm trust of shares of 
  2.18  stock to a beneficiary related within the third degree of 
  2.19  kindred according to the rules of civil law to a majority of the 
  2.20  current beneficiaries of the trust, or to a family farm trust of 
  2.21  which the shareholder, spouse, or related person is a current 
  2.22  beneficiary. 
  2.23     For the purposes of this section, a transfer may be made 
  2.24  with or without consideration, either directly or indirectly, 
  2.25  during life or at death, whether or not in trust, of the shares 
  2.26  in the family farm corporation, and stock owned by a family farm 
  2.27  trust are considered to be owned in equal shares by the current 
  2.28  beneficiaries. 
  2.29     (d) "Family farm trust" means: 
  2.30     (1) a trust in which: 
  2.31     (i) a majority of the current beneficiaries are persons or 
  2.32  spouses of persons who are related to each other within the 
  2.33  third degree of kindred according to the rules of civil law; 
  2.34     (ii) all of the current beneficiaries are natural persons 
  2.35  or nonprofit corporations or trusts described in Internal 
  2.36  Revenue Code, section 170(c), as amended, and the regulations 
  3.1   under that section; and 
  3.2      (iii) one of the family member current beneficiaries is 
  3.3   residing on or actively operating the farm; or 
  3.4      (2) a charitable remainder trust as defined in Internal 
  3.5   Revenue Code, section 664, as amended, and the regulations under 
  3.6   that section, and a charitable lead trust as set forth in 
  3.7   Internal Revenue Code, section 170(f), and the regulations under 
  3.8   that section, if the lead period does not exceed ten years and 
  3.9   the majority of remainder beneficiaries are related to the 
  3.10  grantor within the third degree of kindred according to the 
  3.11  rules of civil law. 
  3.12     For the purposes of this section, if a distributee trust 
  3.13  becomes entitled to, or at the discretion of any person may 
  3.14  receive, a distribution from income or principal of a family 
  3.15  farm trust, then the distributee trust must independently 
  3.16  qualify as a family farm trust. 
  3.17     (e) "Authorized farm corporation" means a corporation 
  3.18  meeting the following standards: 
  3.19     (1) it has no more than five shareholders, provided that 
  3.20  for the purposes of this section, a husband and wife are 
  3.21  considered one shareholder; 
  3.22     (2) all its shareholders, other than any estate, are 
  3.23  natural persons; 
  3.24     (3) it does not have more than one class of shares; 
  3.25     (4) its revenue from rent, royalties, dividends, interest, 
  3.26  and annuities does not exceed 20 percent of its gross receipts; 
  3.27     (5) shareholders holding 51 percent or more of the interest 
  3.28  in the corporation reside on the farm or are actively engaging 
  3.29  in farming; 
  3.30     (6) it does not, directly or indirectly, own or otherwise 
  3.31  have an interest in any title to more than 1,500 acres of 
  3.32  agricultural land; and 
  3.33     (7) none of its shareholders are shareholders in other 
  3.34  authorized farm corporations that directly or indirectly in 
  3.35  combination with the corporation own more than 1,500 acres of 
  3.36  agricultural land. 
  4.1      ~~(e)~~ (f) "Authorized livestock farm corporation" means a 
  4.2   corporation formed for the production of livestock and meeting 
  4.3   the following standards: 
  4.4      (1) it is engaged in the production of livestock other than 
  4.5   dairy cattle; 
  4.6      (2) all its shareholders, other than any estate, are 
  4.7   natural persons or family farm corporations; 
  4.8      (3) it does not have more than one class of shares; 
  4.9      (4) its revenue from rent, royalties, dividends, interest, 
  4.10  and annuities does not exceed 20 percent of its gross receipts; 
  4.11     (5) shareholders holding 75 percent or more of the control, 
  4.12  financial, and capital investment in the corporation are farmers 
  4.13  residing in Minnesota and at least 51 percent of the required 
  4.14  percentage of farmers are actively engaged in livestock 
  4.15  production; 
  4.16     (6) it does not, directly or indirectly, own or otherwise 
  4.17  have an interest in any title to more than 1,500 acres of 
  4.18  agricultural land; and 
  4.19     (7) none of its shareholders are shareholders in other 
  4.20  authorized farm corporations that directly or indirectly in 
  4.21  combination with the corporation own more than 1,500 acres of 
  4.22  agricultural land. 
  4.23     ~~(f)~~ (g) "Agricultural land" means real estate used for 
  4.24  farming or capable of being used for farming in this state. 
  4.25     ~~(g)~~ (h) "Pension or investment fund" means a pension or 
  4.26  employee welfare benefit fund, however organized, a mutual fund, 
  4.27  a life insurance company separate account, a common trust of a 
  4.28  bank or other trustee established for the investment and 
  4.29  reinvestment of money contributed to it, a real estate 
  4.30  investment trust, or an investment company as defined in United 
  4.31  States Code, title 15, section 80a-3.  
  4.32     ~~(h)~~ (i) "Farm homestead" means a house including adjoining 
  4.33  buildings that has been used as part of a farming operation or 
  4.34  is part of the agricultural land used for a farming operation. 
  4.35     ~~(i)~~ (j) "Family farm partnership" means a limited 
  4.36  partnership formed for the purpose of farming and the ownership 
  5.1   of agricultural land in which the majority of the interests in 
  5.2   the partnership is held by and the majority of the partners are 
  5.3   persons ~~or~~, the spouses of persons, or current beneficiaries of 
  5.4   one or more family farm trusts in which the trustee holds an 
  5.5   interest in a family farm partnership related to each other 
  5.6   within the third degree of kindred according to the rules of the 
  5.7   civil law, at least one of the related persons is residing on or 
  5.8   actively operating the farm, and none of the partners are 
  5.9   corporations.  A family farm partnership does not cease to 
  5.10  qualify as a family farm partnership because of a ~~devise or~~ 
  5.11  ~~bequest~~: 
  5.12     (1) transfer of a partnership interest ~~in the~~ 
  5.13  ~~partnership~~ to a person or spouse of a person related within the 
  5.14  third degree of kindred according to the rules of civil law to 
  5.15  the person making the transfer or to a family farm trust of 
  5.16  which the partner, spouse, or related person is a current 
  5.17  beneficiary; or 
  5.18     (2) distribution from a family farm trust of a partnership 
  5.19  interest to a beneficiary related within the third degree of 
  5.20  kindred according to the rules of civil law to a majority of the 
  5.21  current beneficiaries of the trust, or to a family farm trust of 
  5.22  which the partner, spouse, or related person is a current 
  5.23  beneficiary. 
  5.24     For the purposes of this section, a transfer may be made 
  5.25  with or without consideration, either directly or indirectly, 
  5.26  during life or at death, whether or not in trust, of a 
  5.27  partnership interest in the family farm partnership, and 
  5.28  interest owned by a family farm trust is considered to be owned 
  5.29  in equal shares by the current beneficiaries. 
  5.30     ~~(j)~~ (k) "Authorized farm partnership" means a limited 
  5.31  partnership meeting the following standards:  
  5.32     (1) it has been issued a certificate from the secretary of 
  5.33  state or is registered with the county recorder and farming and 
  5.34  ownership of agricultural land is stated as a purpose or 
  5.35  character of the business; 
  5.36     (2) no more than five partners; 
  6.1      (3) all its partners, other than any estate, are natural 
  6.2   persons; 
  6.3      (4) its revenue from rent, royalties, dividends, interest, 
  6.4   and annuities do not exceed 20 percent of its gross receipts; 
  6.5      (5) its general partners hold at least 51 percent of the 
  6.6   interest in the land assets of the partnership and reside on the 
  6.7   farm or are actively engaging in farming not more than 1,500 
  6.8   acres as a general partner in an authorized limited partnership; 
  6.9      (6) its limited partners do not participate in the business 
  6.10  of the limited partnership including operating, managing, or 
  6.11  directing management of farming operations; 
  6.12     (7) it does not, directly or indirectly, own or otherwise 
  6.13  have an interest in any title to more than 1,500 acres of 
  6.14  agricultural land; and 
  6.15     (8) none of its limited partners are limited partners in 
  6.16  other authorized farm partnerships that directly or indirectly 
  6.17  in combination with the partnership own more than 1,500 acres of 
  6.18  agricultural land.  
  6.19     ~~(k)~~ (l) "Farmer" means a natural person who regularly 
  6.20  participates in physical labor or operations management in the 
  6.21  person's farming operation and files "Schedule F" as part of the 
  6.22  person's annual Form 1040 filing with the United States Internal 
  6.23  Revenue Service. 
  6.24     ~~(l)~~ (m) "Actively engaged in livestock production" means 
  6.25  performing day-to-day physical labor or day-to-day operations 
  6.26  management that significantly contributes to livestock 
  6.27  production and the functioning of a livestock operation. 
  6.28     ~~(m)~~ (n) "Research or experimental farm" means a 
  6.29  corporation, limited partnership, or pension or investment fund 
  6.30  that owns or operates agricultural land for research or 
  6.31  experimental purposes, provided that any commercial sales from 
  6.32  the operation are incidental to the research or experimental 
  6.33  objectives of the corporation.  A corporation, limited 
  6.34  partnership, or pension or investment fund seeking initial 
  6.35  approval by the commissioner to operate agricultural land for 
  6.36  research or experimental purposes must first submit to the 
  7.1   commissioner a prospectus or proposal of the intended method of 
  7.2   operation containing information required by the commissioner 
  7.3   including a copy of any operational contract with individual 
  7.4   participants. 
  7.5      ~~(n)~~ (o) "Breeding stock farm" means a corporation or 
  7.6   limited partnership that owns or operates agricultural land for 
  7.7   the purpose of raising breeding stock, including embryos, for 
  7.8   resale to farmers or for the purpose of growing seed, wild rice, 
  7.9   nursery plants, or sod.  An entity that is organized to raise 
  7.10  livestock other than dairy cattle under this paragraph that does 
  7.11  not qualify as an authorized farm corporation must:  
  7.12     (1) sell all castrated animals to be fed out or finished to 
  7.13  farming operations that are neither directly nor indirectly 
  7.14  owned by the business entity operating the breeding stock 
  7.15  operation; and 
  7.16     (2) report its total production and sales annually to the 
  7.17  commissioner.  
  7.18     ~~(o)~~ (p) "Aquatic farm" means a corporation or limited 
  7.19  partnership that owns or leases agricultural land as a necessary 
  7.20  part of an aquatic farm as defined in section 17.47, subdivision 
  7.21  3.  
  7.22     ~~(p)~~ (q) "Religious farm" means a corporation formed 
  7.23  primarily for religious purposes whose sole income is derived 
  7.24  from agriculture.  
  7.25     ~~(q)~~ (r) "Utility corporation" means a corporation regulated 
  7.26  under Minnesota Statutes 1974, chapter 216B, that owns 
  7.27  agricultural land for purposes described in that chapter, or an 
  7.28  electric generation or transmission cooperative that owns 
  7.29  agricultural land for use in its business if the land is not 
  7.30  used for farming except under lease to a family farm unit, a 
  7.31  family farm corporation, a family farm trust, or a family farm 
  7.32  partnership.  
  7.33     ~~(r) "Benevolent trust" means a pension fund or family trust~~ 
  7.34  ~~established by the owners of a family farm, authorized farm~~ 
  7.35  ~~corporation, authorized livestock farm corporation, or family~~ 
  7.36  ~~farm corporation that holds an interest in title to agricultural~~ 
  8.1   ~~land on which one or more of those owners or shareholders have~~ 
  8.2   ~~resided or have been actively engaged in farming as required by~~ 
  8.3   ~~paragraph (b), (c), (d), or (e).~~ 
  8.4      (s) "Development organization" means a corporation, limited 
  8.5   partnership, or pension or investment fund that ~~owns~~ has an 
  8.6   interest in agricultural land for which the corporation, limited 
  8.7   partnership, or pension or investment fund has documented plans 
  8.8   to use and subsequently uses the land within six years from the 
  8.9   date of purchase for a specific nonfarming purpose, or if the 
  8.10  land is zoned nonagricultural, or if the land is located within 
  8.11  an incorporated area.  A corporation, limited partnership, or 
  8.12  pension or investment fund may hold agricultural land in the 
  8.13  amount necessary for its nonfarm business operation; provided, 
  8.14  however, that pending the development of agricultural land for 
  8.15  nonfarm purposes, the land may not be used for farming except 
  8.16  under lease to a family farm unit, a family farm corporation, a 
  8.17  family farm trust, an authorized farm corporation, an authorized 
  8.18  livestock farm corporation, a family farm partnership, or an 
  8.19  authorized farm partnership, or except when controlled through 
  8.20  ownership, options, leaseholds, or other agreements by a 
  8.21  corporation that has entered into an agreement with the United 
  8.22  States under the New Community Act of 1968 (Title IV of the 
  8.23  Housing and Urban Development Act of 1968, United States Code, 
  8.24  title 42, sections 3901 to 3914) as amended, or a subsidiary or 
  8.25  assign of such a corporation.  
  8.26     (t) "Exempt land" means agricultural land owned or leased 
  8.27  by a corporation as of May 20, 1973, agricultural land owned or 
  8.28  leased by a pension or investment fund as of May 12, 1981, ~~or~~ 
  8.29  agricultural land owned or leased by a limited partnership as of 
  8.30  May 1, 1988, or agricultural land owned or leased by a trust as 
  8.31  of the effective date of this act, including the normal 
  8.32  expansion of that ownership at a rate not to exceed 20 percent 
  8.33  of the amount of land owned as of May 20, 1973, for a 
  8.34  corporation; May 12, 1981, for a pension or investment fund; ~~or~~ 
  8.35  May 1, 1988, for a limited partnership, or the effective date of 
  8.36  this act for a trust, measured in acres, in any five-year 
  9.1   period, and including additional ownership reasonably necessary 
  9.2   to meet the requirements of pollution control rules.  A 
  9.3   corporation, limited partnership, or pension or investment fund 
  9.4   that is eligible to own or lease agricultural land under this 
  9.5   section prior to May 1997, or a corporation that is eligible to 
  9.6   own or lease agricultural land as a benevolent trust under this 
  9.7   section prior to the effective date of this act, may continue to 
  9.8   own or lease agricultural land subject to the same conditions 
  9.9   and limitations as previously allowed.  
  9.10     (u) "Gifted land" means agricultural land acquired as a 
  9.11  gift, either by grant or devise, by an educational, religious, 
  9.12  or charitable nonprofit corporation, limited partnership, or 
  9.13  pension or investment fund if all land so acquired is disposed 
  9.14  of within ten years after acquiring the title.  
  9.15     (v) "Repossessed land" means agricultural land acquired by 
  9.16  a corporation, limited partnership, or pension or investment 
  9.17  fund by process of law in the collection of debts, or by any 
  9.18  procedure for the enforcement of a lien or claim on the land, 
  9.19  whether created by mortgage or otherwise if all land so acquired 
  9.20  is disposed of within five years after acquiring the title.  The 
  9.21  five-year limitation is a covenant running with the title to the 
  9.22  land against any grantee, assignee, or successor of the pension 
  9.23  or investment fund, corporation, or limited partnership.  The 
  9.24  land so acquired must not be used for farming during the 
  9.25  five-year period, except under a lease to a family farm unit, a 
  9.26  family farm corporation, an authorized farm corporation, an 
  9.27  authorized livestock farm corporation, a family farm 
  9.28  partnership, or an authorized farm partnership.  Notwithstanding 
  9.29  the five-year divestiture requirement under this paragraph, a 
  9.30  financial institution may continue to own the agricultural land 
  9.31  if the agricultural land is leased to the immediately preceding 
  9.32  former owner, but must dispose of the agricultural land within 
  9.33  ten years of acquiring the title.  Livestock acquired by a 
  9.34  pension or investment fund, corporation, or limited partnership 
  9.35  in the collection of debts, or by a procedure for the 
  9.36  enforcement of lien or claim on the livestock whether created by 
 10.1   security agreement or otherwise after August 1, 1994, must be 
 10.2   sold or disposed of within one full production cycle for the 
 10.3   type of livestock acquired or 18 months after the livestock is 
 10.4   acquired, whichever is ~~later~~ earlier.  
 10.5      (w) "Commissioner" means the commissioner of agriculture.  
 10.6      (x) ~~"Demonstration~~ "Nonprofit corporation" means a 
 10.7   nonprofit corporation organized under state nonprofit 
 10.8   corporation law ~~and formed primarily for the purpose of~~ 
 10.9   ~~demonstrating historical farming practices~~ that uses the land 
 10.10  for a specific nonfarming purpose or leases the agricultural 
 10.11  land to a family farm unit, a family farm corporation, an 
 10.12  authorized farm corporation, an authorized livestock farm 
 10.13  corporation, a family farm partnership, or an authorized farm 
 10.14  partnership. 
 10.15     (y) "Current beneficiary" means a person who at any time 
 10.16  during a year is entitled to, or at the discretion of any person 
 10.17  may, receive a distribution from the income or principal of the 
 10.18  trust.  It does not include a distributee trust, other than a 
 10.19  trust described in section 170(c) of the Internal Revenue Code, 
 10.20  as amended, but does include the current beneficiaries of the 
 10.21  distributee trust.  It does not include a person in whose favor 
 10.22  a power of appointment could be exercised until the holder of 
 10.23  the power of appointment actually exercises the power of 
 10.24  appointment in that person's favor.  It does not include a 
 10.25  person who is entitled to receive a distribution only after a 
 10.26  specified time or upon the occurrence of a specified event until 
 10.27  the time or occurrence of the event.  For the purposes of this 
 10.28  section, a distributee trust is a current beneficiary of a 
 10.29  family farm trust. 
 10.30     (z) "De minimis" means that any corporation, pension or 
 10.31  investment fund, or limited partnership that directly or 
 10.32  indirectly owns, acquires, or otherwise obtains any interest in 
 10.33  40 acres or less of agricultural land and annually receives less 
 10.34  than $150 per acre in gross revenue from rental or agricultural 
 10.35  production. 
 10.36     Sec. 2.  Minnesota Statutes 1999 Supplement, section 
 11.1   500.24, subdivision 3, is amended to read: 
 11.2      Subd. 3.  [FARMING AND OWNERSHIP OF AGRICULTURAL LAND BY 
 11.3   CORPORATIONS RESTRICTED.] No corporation, limited liability 
 11.4   company, pension or investment fund, trust, or limited 
 11.5   partnership shall engage in farming; nor shall any corporation, 
 11.6   limited liability company, pension or investment fund, trust, or 
 11.7   limited partnership, directly or indirectly, own, acquire, or 
 11.8   otherwise obtain any interest, in agricultural land other than a 
 11.9   bona fide encumbrance taken for purposes of security.  This 
 11.10  subdivision does not apply to general partnerships.  This 
 11.11  subdivision does not apply to any agricultural land, 
 11.12  corporation, limited partnership, trust, or pension or 
 11.13  investment fund that meet any of the definitions in subdivision 
 11.14  2, paragraphs (b) to ~~(e)~~ (f), ~~(i),~~ (j), (k), ~~(m)~~ (n) to (v), 
 11.15  and ~~(x),~~ (y), has a conservation plan prepared for the 
 11.16  agricultural land, and reports as required under subdivision 4.  
 11.17  A corporation, pension or investment fund, trust, or limited 
 11.18  partnership that cannot meet any of the definitions in 
 11.19  subdivision 2, paragraphs (b) to (f), (j), (k), (n) to (v), and 
 11.20  (y), may petition the commissioner for an exemption from this 
 11.21  subdivision.  The commissioner may issue an exemption if the 
 11.22  entity meets the following criteria: 
 11.23     (1) the exemption would not contradict the purpose of this 
 11.24  section; and 
 11.25     (2) the petitioning entity would not have a significant 
 11.26  impact upon the agriculture industry and the economy. 
 11.27     The commissioner shall review annually each entity that is 
 11.28  issued an exemption to ensure that the entity continues to meet 
 11.29  the criteria in clauses (1) and (2).  If an entity fails to meet 
 11.30  the criteria, the commissioner shall withdraw the exemption and 
 11.31  the entity is subject to enforcement proceedings under 
 11.32  subdivision 5.  The commissioner shall submit a report with a 
 11.33  list of each entity that is issued an exemption to the chairs of 
 11.34  the senate and house agricultural committees by October 1 of 
 11.35  each year. 
 11.36     Sec. 3.  Minnesota Statutes 1998, section 500.24, 
 12.1   subdivision 4, is amended to read: 
 12.2      Subd. 4.  [REPORTS.] (a) The chief executive officer of 
 12.3   every pension or investment fund, corporation, ~~or~~ limited 
 12.4   partnership, or entity that is seeking to qualify for an 
 12.5   exemption from the commissioner, and the trustee of a family 
 12.6   farm trust that holds any interest in agricultural land or land 
 12.7   used for the breeding, feeding, pasturing, growing, or raising 
 12.8   of livestock, dairy or poultry, or products thereof, or land 
 12.9   used for the production of agricultural crops or fruit or other 
 12.10  horticultural products, other than a bona fide encumbrance taken 
 12.11  for purposes of security, or which is engaged in farming or 
 12.12  proposing to commence farming in this state after May 20, 1973, 
 12.13  shall file with the commissioner a report containing the 
 12.14  following information and documents: 
 12.15     (1) the name of the pension or investment fund, 
 12.16  corporation, or limited partnership and its place of 
 12.17  incorporation, certification, or registration; 
 12.18     (2) the address of the pension or investment plan 
 12.19  headquarters or of the registered office of the corporation in 
 12.20  this state, the name and address of its registered agent in this 
 12.21  state and, in the case of a foreign corporation or limited 
 12.22  partnership, the address of its principal office in its place of 
 12.23  incorporation, certification, or registration; 
 12.24     (3) the acreage and location listed by quarter-quarter 
 12.25  section, township, and county of each lot or parcel of 
 12.26  agricultural land or land used for the keeping or feeding of 
 12.27  poultry in this state owned or leased by the pension or 
 12.28  investment fund, limited partnership, or corporation; 
 12.29     (4) the names and addresses of the officers, 
 12.30  administrators, directors, or trustees of the pension or 
 12.31  investment fund, or of the officers, shareholders owning more 
 12.32  than ten percent of the stock, including the percent of stock 
 12.33  owned by each such shareholder, and the members of the board of 
 12.34  directors of the corporation, and the general and limited 
 12.35  partners and the percentage of interest in the partnership by 
 12.36  each partner; 
 13.1      (5) the farm products which the pension or investment fund, 
 13.2   limited partnership, or corporation produces or intends to 
 13.3   produce on its agricultural land; 
 13.4      (6) with the first report, a copy of the title to the 
 13.5   property where the farming operations are or will occur 
 13.6   indicating the particular exception claimed under subdivision 3; 
 13.7   and 
 13.8      (7) with the first or second report, a copy of the 
 13.9   conservation plan proposed by the soil and water conservation 
 13.10  district, and with subsequent reports a statement of whether the 
 13.11  conservation plan was implemented. 
 13.12     The report of a corporation or partnership seeking to 
 13.13  qualify hereunder as a family farm corporation, an authorized 
 13.14  farm corporation, an authorized livestock farm corporation, a 
 13.15  family farm partnership, ~~or~~ an authorized farm partnership, or a 
 13.16  family farm trust or under an exemption from the commissioner 
 13.17  shall contain the following additional information:  the number 
 13.18  of shares or the partnership interests owned by persons or 
 13.19  current beneficiaries of a family farm trust residing on the 
 13.20  farm or actively engaged in farming, or their relatives within 
 13.21  the third degree of kindred according to the rules of the civil 
 13.22  law or their spouses; the name, address, and number of shares 
 13.23  owned by each shareholder or partnership interests owned by each 
 13.24  partner; and a statement as to percentage of gross receipts of 
 13.25  the corporation derived from rent, royalties, dividends, 
 13.26  interest, and annuities.  No pension or investment fund, limited 
 13.27  partnership, or corporation shall commence farming in this state 
 13.28  until the commissioner has inspected the report and certified 
 13.29  that its proposed operations comply with the provisions of this 
 13.30  section. 
 13.31     (b) Every pension or investment fund, limited partnership, 
 13.32  or corporation as described in paragraph (a) shall, prior to 
 13.33  April 15 of each year, file with the commissioner a report 
 13.34  containing the information required in paragraph (a), based on 
 13.35  its operations in the preceding calendar year and its status at 
 13.36  the end of the year.  A pension or investment fund, limited 
 14.1   partnership, or corporation that does not file the report by 
 14.2   April 15 must pay a $500 civil penalty.  The penalty is a lien 
 14.3   on the land being farmed under subdivision 3 until the penalty 
 14.4   is paid. 
 14.5      (c) The commissioner may, for good cause shown, issue a 
 14.6   written waiver or reduction of the civil penalty for failure to 
 14.7   make a timely filing of the annual report required by this 
 14.8   subdivision.  The waiver or reduction is final and conclusive 
 14.9   with respect to the civil penalty, and may not be reopened or 
 14.10  modified by an officer, employee, or agent of the state, except 
 14.11  upon a showing of fraud or malfeasance or misrepresentation of a 
 14.12  material fact.  The report required under paragraph (b) must be 
 14.13  completed prior to a reduction or waiver under this paragraph.  
 14.14  The commissioner may enter into an agreement under this 
 14.15  paragraph only once for each corporation or partnership. 
 14.16     (d) Failure to file a required report or the willful filing 
 14.17  of false information is a gross misdemeanor. 
 14.18     Sec. 4.  Minnesota Statutes 1998, section 500.24, 
 14.19  subdivision 5, is amended to read: 
 14.20     Subd. 5.  [ENFORCEMENT.] With reason to believe that a 
 14.21  corporation, limited partnership, limited liability company, 
 14.22  trust, or pension or investment fund is violating subdivision 3, 
 14.23  the attorney general shall commence an action in the district 
 14.24  court in which any agricultural lands relative to such violation 
 14.25  are situated, or if situated in two or more counties, in any 
 14.26  county in which a substantial part of the lands are situated.  
 14.27  The attorney general shall file for record with the county 
 14.28  recorder or the registrar of titles of each county in which any 
 14.29  portion of said lands are located a notice of the pendency of 
 14.30  the action as provided in section 557.02.  If the court finds 
 14.31  that the lands in question are being held in violation of 
 14.32  subdivision 3, it shall enter an order so declaring.  The 
 14.33  attorney general shall file for record any such order with the 
 14.34  county recorder or the registrar of titles of each county in 
 14.35  which any portion of said lands are located.  Thereafter, the 
 14.36  pension or investment fund, limited partnership, or corporation 
 15.1   owning such land shall have a period of five years from the date 
 15.2   of such order to divest itself of such lands.  The 
 15.3   aforementioned five-year limitation period shall be deemed a 
 15.4   covenant running with the title to the land against any pension 
 15.5   or investment fund, limited partnership, or corporate grantee or 
 15.6   assignee or the successor of such pension or investment fund, 
 15.7   limited partnership, or corporation.  Any lands not so divested 
 15.8   within the time prescribed shall be sold at public sale in the 
 15.9   manner prescribed by law for the foreclosure of a mortgage by 
 15.10  action.  In addition, any prospective or threatened violation 
 15.11  may be enjoined by an action brought by the attorney general in 
 15.12  the manner provided by law.