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House File 301

Partial Bill History

Bill Text

PAG LIN
  1  1    Section 1.  Section 9H.1, Code 1997, is amended by adding
  1  2 the following new subsection:
  1  3    NEW SUBSECTION.  2A.  "Authorized entity" means an
  1  4 authorized farm corporation; authorized trust; authorized
  1  5 limited liability company; or limited partnership, other than
  1  6 a family farm limited partnership, which owns or leases
  1  7 agricultural land.
  1  8    Sec. 2.  Section 9H.5, subsection 2, Code 1997, is amended
  1  9 by striking the subsection and inserting in lieu thereof the
  1 10 following:
  1 11    2.  a.  A person who holds an interest in an authorized
  1 12 entity shall not hold an interest in another authorized
  1 13 entity, if all authorized entities in which the person would
  1 14 hold an interest own or lease a combined total of more than
  1 15 one thousand five hundred acres of agricultural land.  If a
  1 16 person holds an interest in more than one authorized entity,
  1 17 all authorized entities in which the person holds an interest
  1 18 shall not own or lease a combined total of more than one
  1 19 thousand five hundred acres of agricultural land.
  1 20    b.  As used in this section, an interest in an authorized
  1 21 entity means holding an interest as any of the following:
  1 22    (1)  A stockholder of an authorized farm corporation.
  1 23    (2)  A beneficiary of an authorized trust.
  1 24    (3)  A limited partner in a limited partnership which owns
  1 25 or leases agricultural land, other than a family farm limited
  1 26 partnership.
  1 27    (4)  A member of an authorized limited liability company.
  1 28    c.  This subsection shall not apply to the extent that an
  1 29 interest in an authorized entity was held on or before July 1,
  1 30 1988.
  1 31    Sec. 3.  Section 9H.5, subsection 3, paragraph a, Code
  1 32 1997, is amended to read as follows:
  1 33    a.  An If an authorized farm corporation, authorized trust,
  1 34 authorized limited liability company, or limited partnership
  1 35 violating this section shall be assessed a civil penalty of
  2  1 not more than twenty-five thousand dollars and entity acquires
  2  2 land in violation of this section, the authorized entity shall
  2  3 divest itself of any land held in violation of this section
  2  4 within one year after a judgment is entered ordering the
  2  5 authorized entity to comply with this section.  A civil
  2  6 penalty of not more than one thousand dollars may be imposed
  2  7 on If a person who becomes acquires an interest in an
  2  8 authorized entity by becoming a stockholder of an authorized
  2  9 farm corporation, beneficiary of an authorized trust, member
  2 10 of an authorized limited liability company, or limited partner
  2 11 in a limited partnership in violation of this section.  The,
  2 12 that authorized entity shall divest itself of any land held in
  2 13 violation of this section within one year after a judgment is
  2 14 entered ordering the authorized entity to comply with this
  2 15 section, unless a person shall divest who is a stockholder,
  2 16 beneficiary, member, or limited partner transfers the interest
  2 17 held by the person in the corporation, trust, limited
  2 18 liability company, or limited partnership authorized entity
  2 19 within one year after a judgment is entered ordering the
  2 20 authorized entity to comply with this section.  The court may
  2 21 determine the method of divesting an interest held by a person
  2 22 found to be in violation of this chapter.  A financial gain
  2 23 realized by a person who disposes of an interest held in
  2 24 violation of this chapter shall be forfeited to the state's
  2 25 general fund. All court costs and fees shall be paid by the
  2 26 person holding the interest in violation of this chapter.  The
  2 27 court shall order the dissolution of an authorized entity
  2 28 which violates the order requiring compliance.  The clerk of
  2 29 court shall immediately send a certified copy of the
  2 30 dissolution order to the secretary of state.
  2 31    Sec. 4.  Section 9H.5A, subsection 4, Code 1997, is amended
  2 32 to read as follows:
  2 33    4.  A reporting entity shall be excused from filing a
  2 34 report with the secretary of state during any year in which
  2 35 the reporting entity's corporation, limited partnership,
  3  1 trust, or limited liability company owns, leases, and holds
  3  2 less than twenty acres of agricultural land in this state and
  3  3 the gross revenue produced from all farming on the land equals
  3  4 less than ten thousand dollars.  If a reporting entity is
  3  5 excused from filing a report with the secretary of state as
  3  6 provided in this subsection in the immediately prior reporting
  3  7 year, the secretary of state shall not deliver a form to the
  3  8 reporting entity for the current reporting year.
  3  9    Sec. 5.  Section 487.802, Code 1997, is amended by adding
  3 10 the following new unnumbered paragraph:
  3 11    NEW UNNUMBERED PARAGRAPH.  Upon application by the attorney
  3 12 general, the district court of Polk county shall decree
  3 13 dissolution of a limited partnership if the limited
  3 14 partnership is in violation of a court order providing for
  3 15 compliance with section 9H.5.
  3 16    Sec. 6.  Section 490.1430, subsection 1, unnumbered
  3 17 paragraph 1, Code 1997, is amended to read as follows:
  3 18    A proceeding by the attorney general, if it is established
  3 19 that either any of the following apply:
  3 20    Sec. 7.  Section 490.1430, subsection 1, Code 1997, is
  3 21 amended by adding the following new paragraph:
  3 22    NEW PARAGRAPH.  c.  The corporation is in violation of a
  3 23 court order providing for compliance with section 9H.5.
  3 24    Sec. 8.  Section 490A.1302, Code 1997, is amended by adding
  3 25 the following new unnumbered paragraph:
  3 26    NEW UNNUMBERED PARAGRAPH.  Upon application by the attorney
  3 27 general, the district court of Polk county shall decree
  3 28 dissolution of a limited liability company if the limited
  3 29 liability company is in violation of a court order providing
  3 30 for compliance with section 9H.5.  
  3 31                           EXPLANATION
  3 32    This bill amends Code chapter 9H, which currently, in part,
  3 33 prohibits a person from acquiring an interest in more than one
  3 34 authorized farm corporation, authorized trust, authorized
  3 35 limited liability company, or limited partnership which owns
  4  1 or leases agricultural land.
  4  2    This bill provides that a person who holds an interest in
  4  3 one of these entities, defined in the bill as an "authorized
  4  4 entity", is prohibited from holding an interest in another
  4  5 authorized entity, if all authorized entities in which the
  4  6 person would hold an interest own or lease a combined total of
  4  7 more than 1,500 acres of agricultural land.  The bill also
  4  8 provides that if a person holds an interest in more than one
  4  9 authorized entity, all authorized entities in which the person
  4 10 holds an interest are prohibited from owning or leasing a
  4 11 combined total of more than 1,500 acres of agricultural land.
  4 12    The bill eliminates provisions imposing civil and
  4 13 divestiture penalties upon authorized entities and individuals
  4 14 violating prohibitions regarding land ownership.
  4 15    The bill provides that if an authorized entity acquires
  4 16 land in violation of the bill, it must divest itself of the
  4 17 land.  If a person acquires an interest in an authorized
  4 18 entity by becoming a stockholder, beneficiary, member, or
  4 19 limited partner in a limited partnership in violation of the
  4 20 bill, that authorized entity must divest itself of any land
  4 21 held in violation of the bill, unless the person transfers the
  4 22 person's interest.  The bill requires that compliance be
  4 23 accomplished within one year after a judgment ordering the
  4 24 authorized entity to comply with the bill.  The bill provides
  4 25 that the court shall order the dissolution of an authorized
  4 26 entity which violates the order requiring compliance.
  4 27    The bill also amends Code section 9H.5A, which excuses
  4 28 corporations, trusts, limited liability companies, and limited
  4 29 partnerships from reporting requirements regarding
  4 30 agricultural land holdings if they hold less than 20 acres and
  4 31 revenue from farming operations equals less than $10,000.  The
  4 32 bill provides that if an entity is excused from filing a
  4 33 report with the secretary of state in the immediately prior
  4 34 reporting year, the secretary of state shall not deliver a
  4 35 form to the reporting entity for the current reporting year.  
  5  1 LSB 1740HH 77
  5  2 da/jw/5
     
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