1.1                          A bill for an act
  1.2             proposing an amendment to the Minnesota Constitution 
  1.3             by adding an article XV; restricting corporate 
  1.4             ownership of farm land; repealing Minnesota Statutes 
  1.5             1998, section 500.24, subdivisions 1, 2, 3, 3a, 3b, 4, 
  1.6             and 5. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  [CONSTITUTIONAL AMENDMENT.] 
  1.9      An amendment to the Minnesota Constitution is proposed to 
  1.10  the people.  If the amendment is adopted, a new article XV shall 
  1.11  be added, to read: 
  1.12                             ARTICLE XV
  1.13                      FARMING BY CORPORATIONS
  1.14     Section 1.  [CORPORATIONS; PROHIBITION ON OWNERSHIP OF FARM 
  1.15  LAND; FARMING.] 
  1.16     No corporation may acquire or otherwise obtain an interest, 
  1.17  whether legal, beneficial, or otherwise, in any real estate used 
  1.18  or capable of being used for farming in this state, or engage in 
  1.19  farming.  
  1.20     In this article, "corporation" means a corporation, limited 
  1.21  partnership, limited liability partnership, business trust, or 
  1.22  limited liability company organized under the laws of any state 
  1.23  of the United States or any country.  "Corporation" does not 
  1.24  include general partnerships, except general partnerships in 
  1.25  which nonfamily farm corporations are partners.  "Farming" means 
  1.26  the cultivation of land for the production of agricultural 
  2.1   crops, fruit, or other horticultural products, or the ownership, 
  2.2   keeping, or feeding of animals for the production of livestock 
  2.3   or livestock products. 
  2.4      Sec. 2.  [EXCEPTIONS.] 
  2.5      The prohibition in section 1 does not apply to: 
  2.6      (1) a family farm corporation.  As used in this article, 
  2.7   "family farm corporation" means a corporation engaged in farming 
  2.8   or the ownership of agricultural land, in which a majority of 
  2.9   the partnership interests, shares, stock, or other ownership 
  2.10  interests are held by members of a family or a trust created for 
  2.11  the benefit of a member of that family.  "Family" means natural 
  2.12  persons related to one another within the fourth degree of 
  2.13  kinship according to civil law, or their spouses.  At least one 
  2.14  of the family members in a family farm corporation shall reside 
  2.15  on or be actively engaged in the day-to-day labor and management 
  2.16  of the farm, including both daily or routine substantial 
  2.17  physical exertion and administration.  None of the corporation's 
  2.18  partners, members, or stockholders may be nonresident aliens or 
  2.19  other corporations, unless all of the corporations' 
  2.20  stockholders, members, or partners are persons related within 
  2.21  the fourth degree of kinship to the majority of partners, 
  2.22  members, or stockholders in the family farm corporation; 
  2.23     (2) agricultural land acquired or leased, or livestock 
  2.24  kept, fed, or owned by a cooperative organized under the laws of 
  2.25  any state, if a majority of the shares or other interests of 
  2.26  ownership in the cooperative are held by members in the 
  2.27  cooperative who are natural persons actively engaged in the 
  2.28  day-to-day labor and management of a farm or family farm 
  2.29  corporation, and who either acquire from the cooperative, 
  2.30  through purchase or otherwise, such livestock, or crops produced 
  2.31  on such land, or deliver to the cooperative, through sale or 
  2.32  otherwise, crops to be used in the keeping or feeding of such 
  2.33  livestock; 
  2.34     (3) nonprofit corporations; 
  2.35     (4) agricultural land, which, as of the approval date of 
  2.36  this amendment, is being farmed, or which is owned or leased, or 
  3.1   in which there is a legal or beneficial interest, directly or 
  3.2   indirectly owned, acquired, or obtained by a corporation, if the 
  3.3   land or other interest is held in continuous ownership or under 
  3.4   continuous lease by the same corporation.  For the purposes of 
  3.5   this exemption, land purchased on a contract signed as of the 
  3.6   date this article is adopted is considered as owned on that 
  3.7   date; 
  3.8      (5) livestock which, as of the date this article is 
  3.9   adopted, is owned by a corporation.  For the purposes of this 
  3.10  exemption, livestock to be produced under contract for a 
  3.11  corporation are considered as owned, if the contract is for the 
  3.12  keeping or feeding of livestock and is signed as of the date 
  3.13  this article is adopted, and if the contract remains in effect 
  3.14  and is not terminated or materially amended by either party to 
  3.15  the contract.  This exemption does not extend beyond the term of 
  3.16  any contract signed as of the date this article is adopted; 
  3.17     (6) a farm operated by a corporation for research or 
  3.18  experimental purposes, if any commercial sales from the farm are 
  3.19  only incidental to the research or experimental objectives of 
  3.20  the corporation; 
  3.21     (7) agricultural land operated for the purpose of growing 
  3.22  seed, nursery plants, or sod; 
  3.23     (8) mineral rights on agricultural land; 
  3.24     (9) agricultural land acquired or leased by a corporation 
  3.25  for immediate or potential nonfarming purposes, for a period of 
  3.26  five years from the date of purchase.  A corporation may hold 
  3.27  such agricultural land in acreage necessary to its nonfarm 
  3.28  business operation, but pending the development of the 
  3.29  agricultural land for nonfarm purposes, such land may not be 
  3.30  used for farming except under lease to a noncorporate farm or a 
  3.31  family farm corporation; 
  3.32     (10) agricultural lands or livestock acquired by a 
  3.33  corporation by process of law in the collection of debts, or by 
  3.34  any procedures for the enforcement of a lien, encumbrance, or 
  3.35  claim, whether created by mortgage or otherwise.  Any lands so 
  3.36  acquired must be disposed of within a period of five years and 
  4.1   may not be used for farming before being disposed of, except 
  4.2   under a lease to a noncorporate farm or a family farm 
  4.3   corporation.  Any livestock so acquired must be disposed of 
  4.4   within six months; 
  4.5      (11) agricultural land held by a state or nationally 
  4.6   chartered bank as trustee for a person or a corporation that is 
  4.7   otherwise exempt from the provisions of this article; 
  4.8      (12) a bona fide encumbrance taken for purposes of 
  4.9   security; 
  4.10     (13) custom spraying, fertilizing, or harvesting; or 
  4.11     (14) livestock futures contracts, livestock purchased for 
  4.12  slaughter not more than two weeks prior to the date of 
  4.13  slaughter, or livestock purchased and resold within two weeks. 
  4.14     Sec. 3.  [LOSS OF QUALIFICATION.] 
  4.15     If a family farm corporation that meets the criteria of a 
  4.16  family farm corporation ceases to meet those criteria, it has 20 
  4.17  years, if the ownership of the majority of the stock of the 
  4.18  corporation continues to be held by persons related to one 
  4.19  another within the fourth degree of kinship or their spouses and 
  4.20  their land holdings are not increased, to either requalify as a 
  4.21  family farm corporation or dissolve and return to personal 
  4.22  ownership. 
  4.23     Sec. 4.  [REPORTS REQUIRED; ENFORCEMENT.] 
  4.24     A corporation that owns agricultural land or engages in 
  4.25  farming is required to report information necessary for the 
  4.26  enforcement of this article to the attorney general annually.  
  4.27  The attorney general shall monitor those reports and investigate 
  4.28  possible violations.  Any resident of the state may also notify 
  4.29  the attorney general of possible violations.  If a corporation 
  4.30  violates this article, the attorney general may commence an 
  4.31  action to enjoin any pending illegal purchase of land or 
  4.32  livestock, or to force divestiture of land or livestock held in 
  4.33  violation of this article.  The court shall order any land held 
  4.34  in violation of this article to be divested within two years and 
  4.35  any livestock to be divested within six months.  If land so 
  4.36  ordered by the court has not been divested within two years, the 
  5.1   court shall declare the land escheated to the state.  If the 
  5.2   attorney general fails to bring an action to enforce this 
  5.3   article, any resident of the state has standing to sue for 
  5.4   enforcement. 
  5.5      Sec. 2.  [QUESTION.] 
  5.6      The proposed amendment shall be submitted to the people at 
  5.7   the 2000 general election.  The question submitted shall be: 
  5.8      "Shall the Minnesota Constitution be amended to prohibit 
  5.9   corporations and other business organizations from owning farm 
  5.10  land or having interests in agricultural contracts, land, or 
  5.11  operations? 
  5.12                                     Yes .......
  5.13                                     No ........"
  5.14     Sec. 3.  [REPEALER.] 
  5.15     Minnesota Statutes 1998, section 500.24, subdivisions 1, 2, 
  5.16  3, 3a, 3b, 4, and 5, are repealed on the date the constitutional 
  5.17  amendment in section 1 is adopted.