1.1                          A bill for an act 
  1.2             relating to agriculture; changing limitations on 
  1.3             ownership of agricultural land by corporations, 
  1.4             limited liability companies, pension or investment 
  1.5             funds, and limited partnerships; amending Minnesota 
  1.6             Statutes 1994, section 500.24, subdivisions 2, 3, 3a, 
  1.7             3b, and 4; repealing Minnesota Statutes 1994, section 
  1.8             500.24, subdivision 6.  
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 1994, section 500.24, 
  1.11  subdivision 2, is amended to read: 
  1.12     Subd. 2.  [DEFINITIONS.] For the purposes of this section, 
  1.13  the terms defined The definitions in this subdivision have the 
  1.14  meanings here given them: apply to this section. 
  1.15     (a) "Farming" means the production of (1) agricultural 
  1.16  products; (2) livestock or livestock products; (3) milk or milk 
  1.17  products; or (4) fruit or other horticultural products.  It does 
  1.18  not include the processing, refining, or packaging of said 
  1.19  products, nor the provision of spraying or harvesting services 
  1.20  by a processor or distributor of farm products.  It does not 
  1.21  include the production of timber or forest products or, the 
  1.22  production of poultry or poultry products, or the feeding and 
  1.23  caring for livestock that are delivered to a corporation for 
  1.24  slaughter or processing for up to 20 days before slaughter or 
  1.25  processing. 
  1.26     (b) "Family farm" means an unincorporated farming unit 
  1.27  owned by one or more persons residing on the farm or actively 
  2.1   engaging in farming. 
  2.2      (c) "Family farm corporation" means a corporation founded 
  2.3   for the purpose of farming and the ownership of agricultural 
  2.4   land in which the majority of the voting stock is held by and 
  2.5   the majority of the stockholders are persons or the spouses of 
  2.6   persons related to each other within the third degree of kindred 
  2.7   according to the rules of the civil law, and at least one of 
  2.8   said related persons is residing on or actively operating the 
  2.9   farm, and none of whose stockholders are corporations; provided 
  2.10  that a family farm corporation shall not cease to qualify as 
  2.11  such hereunder by reason of any devise or bequest of shares of 
  2.12  voting stock. 
  2.13     (d) "Authorized farm corporation" means a corporation 
  2.14  meeting the following standards under clause (1) or (2): 
  2.15     (1)(i) its it has no more than five shareholders do not 
  2.16  exceed five in number; 
  2.17     (ii) (2) all its shareholders, other than any estate, are 
  2.18  natural persons; 
  2.19     (iii) (3) it does not have more than one class of shares; 
  2.20  and 
  2.21     (iv) (4) its revenues from rent, royalties, dividends, 
  2.22  interest, and annuities does not exceed 20 percent of its gross 
  2.23  receipts; and 
  2.24     (v) (5) shareholders holding 51 percent or more of the 
  2.25  interest in the corporation must be residing reside on the farm 
  2.26  or are actively engaging in farming; 
  2.27     (vi) the authorized farm corporation, directly or 
  2.28  indirectly, owns or otherwise (6) it has an no direct or 
  2.29  indirect interest, whether legal, beneficial, or otherwise, in 
  2.30  any title to no more than 1,500 acres of real estate used for 
  2.31  farming or capable of being used for farming in this 
  2.32  state agricultural land; and 
  2.33     (vii) a shareholder of the authorized farm corporation (7) 
  2.34  none of its shareholders is not a shareholder in other 
  2.35  authorized farm corporations that directly or indirectly in 
  2.36  combination with the authorized farm corporation own not more 
  3.1   than 1,500 acres of real estate used for farming or capable of 
  3.2   being used for farming in this state; or agricultural land. 
  3.3      (2)(i) the corporation (e) "Authorized livestock farm 
  3.4   corporation" means a corporation meeting the following standards:
  3.5      (1) it is engaged in the production of livestock other than 
  3.6   dairy cattle; and not engaged in farming activities otherwise 
  3.7   prohibited under this section; 
  3.8      (ii) (2) all its shareholders, other than an estate, are 
  3.9   natural persons or a family farm corporation; 
  3.10     (iii) (3) it does not have more than one class of shares; 
  3.11     (iv) (4) its revenue from rent, royalties, dividends, 
  3.12  interest, and annuities does not exceed 20 percent of its gross 
  3.13  receipts; 
  3.14     (v) (5) shareholders holding 75 percent or more of the 
  3.15  control and financial investment in the corporation must be are 
  3.16  farmers residing in Minnesota and at least 51 percent of the 
  3.17  required percentage of farmers must be are actively engaged in 
  3.18  livestock production; 
  3.19     (vi) the authorized farm corporation, (6) it does not 
  3.20  directly or indirectly, owns own or otherwise has have an 
  3.21  interest, whether legal, beneficial, or otherwise, in any title 
  3.22  to no more than 1,500 acres of real estate used for farming or 
  3.23  capable of being used for farming in this state agricultural 
  3.24  land; and 
  3.25     (vii) a shareholder of the authorized farm corporation (7) 
  3.26  none of its shareholders is not a shareholder in other 
  3.27  authorized farm corporations that directly or indirectly in 
  3.28  combination with the authorized farm corporation own not more 
  3.29  than 1,500 acres of real estate used for farming or capable of 
  3.30  being used for farming in this state; and 
  3.31     (viii) the corporation was formed for the production of 
  3.32  livestock other than dairy cattle by natural persons or family 
  3.33  farm corporations that provide 75 percent or more of the capital 
  3.34  investment agricultural land. 
  3.35     (e) (f) "Agricultural land" means land real estate used for 
  3.36  farming or capable of being used for farming in this state. 
  4.1      (f) (g) "Pension or investment fund" means a pension or 
  4.2   employee welfare benefit fund, however organized, a mutual fund, 
  4.3   a life insurance company separate account, a common trust of a 
  4.4   bank or other trustee established for the investment and 
  4.5   reinvestment of money contributed to it, a real estate 
  4.6   investment trust, or an investment company as defined in United 
  4.7   States Code, title 15, section 80a-3.  "Pension or investment 
  4.8   fund" does not include a benevolent trust established by the 
  4.9   owners of a family farm, authorized farm corporation or family 
  4.10  farm corporation.  
  4.11     (g) (h) "Farm homestead" means a house including adjoining 
  4.12  buildings that has been used as part of a farming operation or 
  4.13  is part of the agricultural land used for a farming operation. 
  4.14     (h) (i) "Family farm partnership" means a limited 
  4.15  partnership formed for the purpose of farming and the ownership 
  4.16  of agricultural land in which the majority of the interests in 
  4.17  the partnership is held by and the majority of the partners are 
  4.18  persons or the spouses of persons related to each other within 
  4.19  the third degree of kindred according to the rules of the civil 
  4.20  law, and at least one of the related persons is residing on or 
  4.21  actively operating the farm, and none of the partners are 
  4.22  corporations.  A family farm partnership does not cease to 
  4.23  qualify as a family farm partnership because of a devise or 
  4.24  bequest of interest in the partnership.  
  4.25     (i) (j) "Authorized farm partnership" means a limited 
  4.26  partnership meeting the following standards:  
  4.27     (1) it has been issued a certificate from the secretary of 
  4.28  state or is registered with the county recorder and farming and 
  4.29  ownership of agricultural land is stated as a purpose or 
  4.30  character of the business; 
  4.31     (2) its no more than five partners do not exceed five in 
  4.32  number; 
  4.33     (3) (2) all its partners, other than an estate, are natural 
  4.34  persons; 
  4.35     (4) (3) its revenues from rent, royalties, dividends, 
  4.36  interest, and annuities do not exceed 20 percent of its gross 
  5.1   receipts; 
  5.2      (5) (4) its general partners hold at least 51 percent of 
  5.3   the interest in the land assets of the partnership and reside on 
  5.4   the farm or are actively engaging in farming not more than 1,500 
  5.5   acres as a general partner in an authorized limited partnership; 
  5.6      (6) (5) its limited partners do not participate in the 
  5.7   business of the limited partnership including operating, 
  5.8   managing, or directing management of farming operations; 
  5.9      (7) the authorized farm partnership, directly or 
  5.10  indirectly, does not own or otherwise have an (6) it has no 
  5.11  direct or indirect interest, whether legal, beneficial, or 
  5.12  otherwise, in a title to more than 1,500 acres of real estate 
  5.13  used for farming or capable of being used for farming in this 
  5.14  state agricultural land; and 
  5.15     (8) a limited partner of the authorized farm 
  5.16  partnership (7) none of its limited partners is not a limited 
  5.17  partner in other authorized farm partnerships that directly or 
  5.18  indirectly in combination with the authorized farm partnership 
  5.19  own not more than 1,500 acres of real estate used for farming or 
  5.20  capable of being used for farming in this state agricultural 
  5.21  land.  
  5.22     (j) (k) "Farmer" means a person who regularly participates 
  5.23  in physical labor or operations management in the farmer's 
  5.24  person's farming operation and files "Schedule F" as part of the 
  5.25  person's annual Form 1040 filing with the United States Internal 
  5.26  Revenue Service. 
  5.27     (k) (l) "Actively engaged in livestock production" means 
  5.28  that a person performs performing day-to-day physical labor or 
  5.29  day-to-day operations management that significantly contributes 
  5.30  to livestock production and the functioning of a livestock 
  5.31  operation. 
  5.32     (m) "Research or experimental farm" means a corporation, 
  5.33  limited partnership, or pension or investment fund that owns or 
  5.34  operates agricultural land for research or experimental 
  5.35  purposes, provided that any commercial sales from the operation 
  5.36  are incidental to the research or experimental objectives of the 
  6.1   corporation.  A corporation, limited partnership, or pension or 
  6.2   investment fund seeking initial approval by the commissioner to 
  6.3   operate agricultural land for research or experimental purposes 
  6.4   must first submit to the commissioner a prospectus or proposal 
  6.5   of the intended method of operation containing information 
  6.6   required by the commissioner including a copy of any operational 
  6.7   contract with individual participants. 
  6.8      (n) "Breeding stock farm" means a corporation or limited 
  6.9   partnership that owns land for the purpose of raising breeding 
  6.10  stock, including embryos, for resale to farmers or for the 
  6.11  purpose of growing seed, wild rice, nursery plants, or sod.  An 
  6.12  entity that is organized to raise livestock other than dairy 
  6.13  cattle under this clause that does not qualify as an authorized 
  6.14  farm corporation must:  
  6.15     (1) sell all castrated animals to be fed out or finished to 
  6.16  farming operations that are neither directly nor indirectly 
  6.17  owned by the business entity operating the breeding stock 
  6.18  operation; and 
  6.19     (2) report its total production and sales annually to the 
  6.20  commissioner.  
  6.21     (o) "Aquatic farm" means a corporation or limited 
  6.22  partnership that owns or leases agricultural land as a necessary 
  6.23  part of an aquatic farm as defined in section 17.47, subdivision 
  6.24  3.  
  6.25     (p) "Religious farm" means a corporation formed primarily 
  6.26  for religious purposes whose sole income is derived from 
  6.27  agriculture.  
  6.28     (q) "Utility corporation" means a corporation regulated 
  6.29  under Minnesota Statutes 1974, chapter 216B, that owns 
  6.30  agricultural land for purposes described in that chapter, or an 
  6.31  electric generation or transmission cooperative that owns 
  6.32  agricultural land for use in its business if the land is not 
  6.33  used for farming except under lease to a family farm unit, a 
  6.34  family farm corporation, or a family farm partnership.  
  6.35     (r) "Benevolent trust" means a pension fund or family trust 
  6.36  established by the owners of a family farm, authorized farm 
  7.1   corporation, authorized livestock farm corporation, or family 
  7.2   farm corporation that holds an interest in title to agricultural 
  7.3   land on which one or more of those owners or shareholders have 
  7.4   resided or have been actively engaged in farming as required by 
  7.5   clause (b), (c), (d), or (e). 
  7.6      (s) "Development organization" means a corporation, limited 
  7.7   partnership, or pension or investment fund that owns 
  7.8   agricultural land for which the corporation, limited 
  7.9   partnership, or pension or investment fund has documented plans 
  7.10  to use and subsequently uses the land within six years from the 
  7.11  date of purchase for a specific nonfarming purpose, or if the 
  7.12  land is zoned nonagricultural, or if the land is located within 
  7.13  an incorporated area.  A corporation, limited partnership, or 
  7.14  pension or investment fund may hold agricultural land in the 
  7.15  amount necessary for its nonfarm business operation; provided, 
  7.16  however, that pending the development of agricultural land for 
  7.17  nonfarm purposes, the land may not be used for farming except 
  7.18  under lease to a family farm unit, a family farm corporation, an 
  7.19  authorized farm corporation, an authorized livestock farm 
  7.20  corporation, a family farm partnership, or an authorized farm 
  7.21  partnership, or except when controlled through ownership, 
  7.22  options, leaseholds, or other agreements by a corporation that 
  7.23  has entered into an agreement with the United States under the 
  7.24  New Community Act of 1968 (Title IV of the Housing and Urban 
  7.25  Development Act of 1968, United States Code, title 42, sections 
  7.26  3901 to 3914) as amended, or a subsidiary or assign of such a 
  7.27  corporation.  
  7.28     (t) "Exempt land" means agricultural land owned or leased 
  7.29  by a corporation as of May 20, 1973, agricultural land owned or 
  7.30  leased by a pension or investment fund as of May 12, 1981, or 
  7.31  agricultural land owned or leased by a limited partnership as of 
  7.32  May 1, 1988, including the normal expansion of that ownership at 
  7.33  a rate not to exceed 20 percent of the amount of land owned as 
  7.34  of May 20, 1973, for a corporation; May 12, 1981, for a pension 
  7.35  or investment fund; or May 1, 1988, for a limited partnership, 
  7.36  measured in acres, in any five-year period, and including 
  8.1   additional ownership reasonably necessary to meet the 
  8.2   requirements of pollution control rules.  A corporation, limited 
  8.3   partnership, or pension or investment fund that is eligible to 
  8.4   own or lease agricultural land under this section prior to May 
  8.5   1996 may continue to own or lease agricultural land subject to 
  8.6   the same conditions and limitations as previously allowed.  
  8.7      (u) "Gifted land" means agricultural land acquired as a 
  8.8   gift, either by grant or devise, by an educational, religious, 
  8.9   or charitable nonprofit corporation, limited partnership, or 
  8.10  pension or investment fund if all land so acquired is disposed 
  8.11  of within ten years after acquiring the title.  
  8.12     (v) "Repossessed land" means agricultural land acquired by 
  8.13  a corporation, limited partnership, or pension or investment 
  8.14  fund by process of law in the collection of debts, or by any 
  8.15  procedure for the enforcement of a lien or claim on the land, 
  8.16  whether created by mortgage or otherwise if all land so acquired 
  8.17  is disposed of within five years after acquiring the title.  The 
  8.18  five-year limitation is a covenant running with the title to the 
  8.19  land against any grantee, assignee, or successor of the pension 
  8.20  or investment fund, corporation, or limited partnership.  The 
  8.21  land so acquired must not be used for farming during the 
  8.22  five-year period, except under a lease to a family farm unit, a 
  8.23  family farm corporation, an authorized farm corporation, an 
  8.24  authorized livestock farm corporation, a family farm 
  8.25  partnership, or an authorized farm partnership.  Notwithstanding 
  8.26  the five-year divestiture requirement under this clause, a 
  8.27  financial institution may continue to own the agricultural land 
  8.28  if the agricultural land is leased to the immediately preceding 
  8.29  former owner, but must dispose of the agricultural land within 
  8.30  ten years of acquiring the title.  Livestock acquired by a 
  8.31  pension or investment fund, corporation, or limited partnership 
  8.32  in the collection of debts, or by a procedure for the 
  8.33  enforcement of lien or claim on the livestock whether created by 
  8.34  security agreement or otherwise after August 1, 1994, must be 
  8.35  sold or disposed of within one full production cycle for the 
  8.36  type of livestock acquired or 18 months after the livestock is 
  9.1   acquired, whichever is later.  
  9.2      (w) "Commissioner" means the commissioner of agriculture.  
  9.3      Sec. 2.  Minnesota Statutes 1994, section 500.24, 
  9.4   subdivision 3, is amended to read: 
  9.5      Subd. 3.  [FARMING AND OWNERSHIP OF AGRICULTURAL LAND BY 
  9.6   CORPORATIONS RESTRICTED.] No corporation, limited liability 
  9.7   company, pension or investment fund, or limited partnership 
  9.8   shall engage in farming; nor shall any corporation, limited 
  9.9   liability company, pension or investment fund, or limited 
  9.10  partnership, directly or indirectly, own, acquire, or otherwise 
  9.11  obtain an interest, whether legal, beneficial or otherwise, in 
  9.12  any title to real estate used for farming or capable of being 
  9.13  used for farming in this state.  Livestock that are delivered 
  9.14  for slaughter or processing may be fed and cared for by a 
  9.15  corporation up to 20 days prior to slaughter or processing.  
  9.16  Provided, however, that the restrictions in this subdivision do 
  9.17  not apply to corporations or partnerships in clause (b) and do 
  9.18  not apply to corporations, limited partnerships, and pension or 
  9.19  investment funds that record its name and the particular 
  9.20  exception under clauses (a) to (s) under which the agricultural 
  9.21  land is owned or farmed, have a conservation plan prepared for 
  9.22  the agricultural land, report as required under subdivision 4, 
  9.23  and satisfy one of the following conditions under clauses (a) to 
  9.24  (s): other than a bona fide encumbrance taken for purposes of 
  9.25  security in agricultural land.  This subdivision does not apply 
  9.26  to any agricultural land, corporation, limited partnership, or 
  9.27  pension or investment fund that meet any of the definitions in 
  9.28  subdivision 2, paragraphs (b) to (e), (i), (j), and (m) to (v). 
  9.29     (a) a bona fide encumbrance taken for purposes of security; 
  9.30     (b) a family farm corporation, an authorized farm 
  9.31  corporation, a family farm partnership, or an authorized farm 
  9.32  partnership as defined in subdivision 2 or a general 
  9.33  partnership; 
  9.34     (c) agricultural land and land capable of being used for 
  9.35  farming owned by a corporation as of May 20, 1973, or a pension 
  9.36  or investment fund as of May 12, 1981, including the normal 
 10.1   expansion of such ownership at a rate not to exceed 20 percent 
 10.2   of the amount of land owned as of May 20, 1973, or, in the case 
 10.3   of a pension or investment fund, as of May 12, 1981, measured in 
 10.4   acres, in any five-year period, and including additional 
 10.5   ownership reasonably necessary to meet the requirements of 
 10.6   pollution control rules; 
 10.7      (d) agricultural land operated for research or experimental 
 10.8   purposes with the approval of the commissioner of agriculture, 
 10.9   provided that any commercial sales from the operation must be 
 10.10  incidental to the research or experimental objectives of the 
 10.11  corporation.  A corporation, limited partnership, or pension or 
 10.12  investment fund seeking to operate agricultural land for 
 10.13  research or experimental purposes must submit to the 
 10.14  commissioner a prospectus or proposal of the intended method of 
 10.15  operation, containing information required by the commissioner 
 10.16  including a copy of any operational contract with individual 
 10.17  participants, prior to initial approval of an operation.  A 
 10.18  corporation, limited partnership, or pension or investment fund 
 10.19  operating agricultural land for research or experimental 
 10.20  purposes prior to May 1, 1988, must comply with all requirements 
 10.21  of this clause except the requirement for initial approval of 
 10.22  the project; 
 10.23     (e) agricultural land operated by a corporation or limited 
 10.24  partnership for the purpose of raising breeding stock, including 
 10.25  embryos, for resale to farmers or operated for the purpose of 
 10.26  growing seed, wild rice, nursery plants or sod.  An entity that 
 10.27  is organized to raise livestock other than dairy cattle under 
 10.28  this clause that does not meet the definition requirement for an 
 10.29  authorized farm corporation must: 
 10.30     (1) sell all castrated animals to be fed out or finished to 
 10.31  farming operations that are neither directly nor indirectly 
 10.32  owned by the business entity operating the breeding stock 
 10.33  operation; and 
 10.34     (2) report its total production and sales annually to the 
 10.35  commissioner of agriculture; 
 10.36     (f) agricultural land and land capable of being used for 
 11.1   farming leased by a corporation or limited partnership in an 
 11.2   amount, measured in acres, not to exceed the acreage under lease 
 11.3   to such corporation as of May 20, 1973, or to the limited 
 11.4   partnership as of May 1, 1988, and the additional acreage 
 11.5   required for normal expansion at a rate not to exceed 20 percent 
 11.6   of the amount of land leased as of May 20, 1973, for a 
 11.7   corporation or May 1, 1988, for a limited partnership in any 
 11.8   five-year period, and the additional acreage reasonably 
 11.9   necessary to meet the requirements of pollution control rules; 
 11.10     (g) agricultural land when acquired as a gift (either by 
 11.11  grant or a devise) by an educational, religious, or charitable 
 11.12  nonprofit corporation or by a pension or investment fund or 
 11.13  limited partnership; provided that all lands so acquired by a 
 11.14  pension or investment fund, and all lands so acquired by a 
 11.15  corporation or limited partnership which are not operated for 
 11.16  research or experimental purposes, or are not operated for the 
 11.17  purpose of raising breeding stock for resale to farmers or 
 11.18  operated for the purpose of growing seed, wild rice, nursery 
 11.19  plants or sod must be disposed of within ten years after 
 11.20  acquiring title thereto; 
 11.21     (h) agricultural land acquired by a pension or investment 
 11.22  fund or a corporation other than a family farm corporation or 
 11.23  authorized farm corporation, as defined in subdivision 2, or a 
 11.24  limited partnership other than a family farm partnership or 
 11.25  authorized farm partnership as defined in subdivision 2, for 
 11.26  which the corporation or limited partnership has documented 
 11.27  plans to use and subsequently uses the land within six years 
 11.28  from the date of purchase for a specific nonfarming purpose, or 
 11.29  if the land is zoned nonagricultural, or if the land is located 
 11.30  within an incorporated area.  A pension or investment fund or a 
 11.31  corporation or limited partnership may hold such agricultural 
 11.32  land in such acreage as may be necessary to its nonfarm business 
 11.33  operation; provided, however, that pending the development of 
 11.34  agricultural land for nonfarm purposes, such land may not be 
 11.35  used for farming except under lease to a family farm unit, a 
 11.36  family farm corporation, an authorized farm corporation, a 
 12.1   family farm partnership, or an authorized farm partnership, or 
 12.2   except when controlled through ownership, options, leaseholds, 
 12.3   or other agreements by a corporation which has entered into an 
 12.4   agreement with the United States of America pursuant to the New 
 12.5   Community Act of 1968 (Title IV of the Housing and Urban 
 12.6   Development Act of 1968, United States Code, title 42, sections 
 12.7   3901 to 3914) as amended, or a subsidiary or assign of such a 
 12.8   corporation; 
 12.9      (i) agricultural lands acquired by a pension or investment 
 12.10  fund or a corporation or limited partnership by process of law 
 12.11  in the collection of debts, or by any procedure for the 
 12.12  enforcement of a lien or claim thereon, whether created by 
 12.13  mortgage or otherwise; provided, however, that all lands so 
 12.14  acquired be disposed of within ten years after acquiring the 
 12.15  title if acquired before May 1, 1988, and five years after 
 12.16  acquiring the title if acquired on or after May 1, 1988, 
 12.17  acquiring the title thereto, and further provided that the land 
 12.18  so acquired shall not be used for farming during the ten-year or 
 12.19  five-year period except under a lease to a family farm unit, a 
 12.20  family farm corporation, an authorized farm corporation, a 
 12.21  family farm partnership, or an authorized farm partnership.  The 
 12.22  aforementioned ten-year or five-year limitation period shall be 
 12.23  deemed a covenant running with the title to the land against any 
 12.24  grantee, assignee, or successor of the pension or investment 
 12.25  fund, corporation, or limited partnership.  Notwithstanding the 
 12.26  five-year divestiture requirement under this clause, a financial 
 12.27  institution may continue to own the agricultural land if the 
 12.28  agricultural land is leased to the immediately preceding former 
 12.29  owner, but must divest of the agricultural land within the 
 12.30  ten-year period.  Livestock acquired by a pension or investment 
 12.31  fund, corporation, or limited partnership in the collection of 
 12.32  debts, or by a procedure for the enforcement of lien or claim on 
 12.33  the livestock whether created by security agreement or otherwise 
 12.34  after August 1, 1994, must be sold or disposed of within one 
 12.35  full production cycle for the type of livestock acquired or 18 
 12.36  months after the livestock is acquired, whichever is later; 
 13.1      (j) agricultural land acquired by a corporation regulated 
 13.2   under the provisions of Minnesota Statutes 1974, chapter 216B, 
 13.3   for purposes described in that chapter or by an electric 
 13.4   generation or transmission cooperative for use in its business, 
 13.5   provided, however, that such land may not be used for farming 
 13.6   except under lease to a family farm unit, a family farm 
 13.7   corporation, or a family farm partnership; 
 13.8      (k) agricultural land, either leased or owned, totaling no 
 13.9   more than 2,700 acres, acquired after May 20, 1973, for the 
 13.10  purpose of replacing or expanding asparagus growing operations, 
 13.11  provided that such corporation had established 2,000 acres of 
 13.12  asparagus production; 
 13.13     (l) all agricultural land or land capable of being used for 
 13.14  farming which was owned or leased by an authorized farm 
 13.15  corporation as defined in Minnesota Statutes 1974, section 
 13.16  500.24, subdivision 1, clause (d), but which does not qualify as 
 13.17  an authorized farm corporation as defined in subdivision 2, 
 13.18  clause (d); 
 13.19     (m) a corporation formed primarily for religious purposes 
 13.20  whose sole income is derived from agriculture; 
 13.21     (n) agricultural land owned or leased by a corporation 
 13.22  prior to August 1, 1975, which was exempted from the restriction 
 13.23  of this subdivision under the provisions of Laws 1973, chapter 
 13.24  427, including normal expansion of such ownership or leasehold 
 13.25  interest to be exercised at a rate not to exceed 20 percent of 
 13.26  the amount of land owned or leased on August 1, 1975, in any 
 13.27  five-year period and the additional ownership reasonably 
 13.28  necessary to meet requirements of pollution control rules; 
 13.29     (o) agricultural land owned or leased by a corporation 
 13.30  prior to August 1, 1978, including normal expansion of such 
 13.31  ownership or leasehold interest, to be exercised at a rate not 
 13.32  to exceed 20 percent of the amount of land owned or leased on 
 13.33  August 1, 1978, and the additional ownership reasonably 
 13.34  necessary to meet requirements of pollution control rules, 
 13.35  provided that nothing herein shall reduce any exemption 
 13.36  contained under the provisions of Laws 1975, chapter 324, 
 14.1   section 1, subdivision 2; 
 14.2      (p) an interest in the title to agricultural land acquired 
 14.3   by a pension fund or family trust established by the owners of a 
 14.4   family farm, authorized farm corporation or family farm 
 14.5   corporation, but limited to the farm on which one or more of 
 14.6   those owners or shareholders have resided or have been actively 
 14.7   engaged in farming as required by subdivision 2, clause (b), 
 14.8   (c), or (d); 
 14.9      (q) agricultural land owned by a nursing home located in a 
 14.10  city with a population, according to the state demographer's 
 14.11  1985 estimate, between 900 and 1,000, in a county with a 
 14.12  population, according to the state demographer's 1985 estimate, 
 14.13  between 18,000 and 19,000, if the land was given to the nursing 
 14.14  home as a gift with the expectation that it would not be sold 
 14.15  during the donor's lifetime.  This exemption is available until 
 14.16  July 1, 1995; 
 14.17     (r) the acreage of agricultural land and land capable of 
 14.18  being used for farming owned and recorded by an authorized farm 
 14.19  corporation as defined in Minnesota Statutes 1986, section 
 14.20  500.24, subdivision 2, paragraph (d), or a limited partnership 
 14.21  as of May 1, 1988, including the normal expansion of the 
 14.22  ownership at a rate not to exceed 20 percent of the land owned 
 14.23  and recorded as of May 1, 1988, measured in acres, in any 
 14.24  five-year period, and including additional ownership reasonably 
 14.25  necessary to meet the requirements of pollution control rules; 
 14.26     (s) agricultural land owned or leased as a necessary part 
 14.27  of an aquatic farm as defined in section 17.47, subdivision 3. 
 14.28     Sec. 3.  Minnesota Statutes 1994, section 500.24, 
 14.29  subdivision 3a, is amended to read: 
 14.30     Subd. 3a.  [LEASE AGREEMENT; CONSERVATION PRACTICE 
 14.31  PROTECTION CLAUSE.] A corporation, pension or investment fund, 
 14.32  or limited partnership, other than a family farm corporation, an 
 14.33  authorized farm corporation, an authorized livestock farm 
 14.34  corporation, a family farm partnership, or an authorized farm 
 14.35  partnership, when leasing farm land to a family farm unit, a 
 14.36  family farm corporation, an authorized farm corporation, an 
 15.1   authorized livestock farm corporation, a family farm 
 15.2   partnership, or an authorized farm partnership under provisions 
 15.3   of subdivision 3, clause (i), must include within the lease 
 15.4   agreement a provision prohibiting intentional damage or 
 15.5   destruction to a conservation practice on the agricultural land. 
 15.6      Sec. 4.  Minnesota Statutes 1994, section 500.24, 
 15.7   subdivision 3b, is amended to read: 
 15.8      Subd. 3b.  [PROTECTION OF CONSERVATION PRACTICES.] If A 
 15.9   corporation, pension or investment fund, or limited partnership, 
 15.10  other than a family farm corporation, an authorized farm 
 15.11  corporation, an authorized livestock farm corporation, a family 
 15.12  farm partnership, or authorized farm partnership, which, during 
 15.13  the period of time it holds agricultural land under subdivision 
 15.14  3, clause (i), intentionally destroys a conservation practice as 
 15.15  defined in section 103F.401, subdivision 3, to which the state 
 15.16  has made a financial contribution, the corporation, pension or 
 15.17  investment fund, or limited partnership must pay the 
 15.18  commissioner of agriculture, for deposit in the general fund, an 
 15.19  amount equal to the state's total contributions to that 
 15.20  conservation practice plus interest from the time of investment 
 15.21  in the conservation practice.  Interest must be calculated at an 
 15.22  annual percentage rate of 12 percent. 
 15.23     Sec. 5.  Minnesota Statutes 1994, section 500.24, 
 15.24  subdivision 4, is amended to read: 
 15.25     Subd. 4.  [REPORTS.] (a) The chief executive officer of 
 15.26  every pension or investment fund, corporation, or limited 
 15.27  partnership, except a family farm corporation or a family farm 
 15.28  limited partnership, that holds any interest in agricultural 
 15.29  land or land used for the breeding, feeding, pasturing, growing, 
 15.30  or raising of livestock, dairy or poultry, or products thereof, 
 15.31  or land used for the production of agricultural crops or fruit 
 15.32  or other horticultural products, other than a bona fide 
 15.33  encumbrance taken for purposes of security, or which is engaged 
 15.34  in farming or proposing to commence farming in this state after 
 15.35  May 20, 1973, shall file with the commissioner of agriculture a 
 15.36  report containing the following information and documents: 
 16.1      (1) the name of the pension or investment fund, 
 16.2   corporation, or limited partnership and its place of 
 16.3   incorporation, certification, or registration; 
 16.4      (2) the address of the pension or investment plan 
 16.5   headquarters or of the registered office of the corporation in 
 16.6   this state, the name and address of its registered agent in this 
 16.7   state and, in the case of a foreign corporation or limited 
 16.8   partnership, the address of its principal office in its place of 
 16.9   incorporation, certification, or registration; 
 16.10     (3) the acreage and location listed by quarter-quarter 
 16.11  section, township, and county of each lot or parcel 
 16.12  of agricultural land in this state owned or leased by the 
 16.13  pension or investment fund, limited partnership, or corporation 
 16.14  and used for the growing of crops or the keeping or feeding of 
 16.15  poultry or livestock; 
 16.16     (4) the names and addresses of the officers, 
 16.17  administrators, directors, or trustees of the pension or 
 16.18  investment fund, or of the officers, shareholders owning more 
 16.19  than ten percent of the stock, including the percent of stock 
 16.20  owned by each such shareholder, and the members of the board of 
 16.21  directors of the corporation, and the general and limited 
 16.22  partners and the percentage of interest in the partnership by 
 16.23  each partner; 
 16.24     (5) the farm products which the pension or investment fund, 
 16.25  limited partnership, or corporation produces or intends to 
 16.26  produce on its agricultural land; 
 16.27     (6) with the first report, a copy of the title to the 
 16.28  property where the farming operations are or will occur 
 16.29  indicating the particular exception claimed under subdivision 3, 
 16.30  clauses (a) to (r); and 
 16.31     (7) with the first or second report, a copy of the 
 16.32  conservation plan proposed by the soil and water conservation 
 16.33  district, and with subsequent reports a statement of whether the 
 16.34  conservation plan was implemented. 
 16.35     The report of a corporation seeking to qualify hereunder as 
 16.36  a family farm corporation, an authorized farm corporation, an 
 17.1   authorized livestock farm corporation, a family farm 
 17.2   partnership, or authorized farm partnership shall contain the 
 17.3   following additional information:  the number of shares or the 
 17.4   partnership interests owned by persons residing on the farm or 
 17.5   actively engaged in farming, or their relatives within the third 
 17.6   degree of kindred according to the rules of the civil law or 
 17.7   their spouses; the name, address, and number of shares owned by 
 17.8   each shareholder or partnership interests owned by each partner; 
 17.9   and a statement as to percentage of gross receipts of the 
 17.10  corporation derived from rent, royalties, dividends, interest, 
 17.11  and annuities.  No pension or investment fund, limited 
 17.12  partnership, or corporation shall commence farming in this state 
 17.13  until the commissioner of agriculture has inspected the report 
 17.14  and certified that its proposed operations comply with the 
 17.15  provisions of this section. 
 17.16     (b) Every pension or investment fund, limited partnership, 
 17.17  or corporation as described in clause paragraph (a) shall, prior 
 17.18  to April 15 of each year, file with the commissioner of 
 17.19  agriculture a report containing the information required 
 17.20  in clause paragraph (a), based on its operations in the 
 17.21  preceding calendar year and its status at the end of the year.  
 17.22  A pension or investment fund, limited partnership, or 
 17.23  corporation that does not file the report by April 15 must pay a 
 17.24  $500 civil penalty.  The penalty is a lien on the land being 
 17.25  farmed under subdivision 3 until the penalty is paid. 
 17.26     (c) The commissioner or the commissioner's authorized 
 17.27  representative may enter into a written agreement with a person 
 17.28  required to file a report under this subdivision who, for good 
 17.29  cause shown, has failed to make a timely filing.  An agreement 
 17.30  must be construed as a "no contest" pleading and may encompass a 
 17.31  reduction or waiver of the civil penalty for late filing.  The 
 17.32  agreement is final and conclusive with respect to the civil 
 17.33  penalty, except upon a showing of fraud or malfeasance or 
 17.34  misrepresentation of a material fact.  The matter agreed upon in 
 17.35  the agreement may not be reopened or modified by an officer, 
 17.36  employee, or agent of the state.  The report required under 
 18.1   paragraph (b) must be completed prior to a reduction or waiver 
 18.2   under this paragraph.  The commissioner may enter into an 
 18.3   agreement under this paragraph only once for each person 
 18.4   required to file under this subdivision.  The commissioner may 
 18.5   enter into an agreement under this paragraph only once for each 
 18.6   corporation or partnership. 
 18.7      (d) Failure to file a required report, or the willful 
 18.8   filing of false information, shall constitute is a gross 
 18.9   misdemeanor. 
 18.10     Sec. 6.  [REPEALER.] 
 18.11     Minnesota Statutes 1994, section 500.24, subdivision 6, is 
 18.12  repealed.