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PAG LIN
1 1 HOUSE FILE 2335
1 2
1 3 AN ACT
1 4 RELATING TO PERSONS HOLDING INTERESTS IN AGRICULTURAL
1 5 LAND AND PROVIDING PENALTIES AND AN EFFECTIVE DATE.
1 6
1 7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 8
1 9 DIVISION I
1 10 LANDHOLDING RESTRICTIONS
1 11 SUBCHAPTER I – GENERAL
1 12 Section 101. NEW SECTION. 10.1 DEFINITIONS.
1 13 As used in this chapter and in chapter 10B, unless the
1 14 context otherwise requires:
1 15 1. "Actively engaged in farming" means that a natural
1 16 person, including a shareholder or an officer, director, or
1 17 employee of a corporation, or a member or manager of a limited
1 18 liability company, does any of the following:
1 19 a. Inspects the production activities periodically and
1 20 furnishes at least half of the value of the tools used for
1 21 crop or livestock production and pays at least half the direct
1 22 cost of crop or livestock production.
1 23 b. Regularly and frequently makes or takes an important
1 24 part in making management decisions substantially contributing
1 25 to or affecting the success of the farm operation.
1 26 c. Performs physical work which significantly contributes
1 27 to crop or livestock production.
1 28 2. "Agricultural land" means the same as defined in
1 29 section 9H.1.
1 30 3. "Authorized entity" means an authorized farm
1 31 corporation; authorized limited liability company; limited
1 32 partnership, other than a family farm limited partnership; or
1 33 an authorized trust as defined in section 9H.1.
1 34 4. "Commodity share landlord" means a natural person or a
1 35 general partnership as provided in chapter 486 in which all
2 1 partners are natural persons, who owns at least one hundred
2 2 fifty acres of agricultural land, if the owner receives rent
2 3 on a commodity share basis, which may be either a share of the
2 4 crops or livestock produced on the land.
2 5 5. "Cooperative association" means an entity which is
2 6 structured and operated on a cooperative basis pursuant to 26
2 7 U.S.C. } 1381(a) and which meets the definitional requirements
2 8 of an association as provided in 12 U.S.C. } 1141(j)(a) or 7
2 9 U.S.C. } 291.
2 10 6. "Family farm entity" means a family farm corporation,
2 11 family farm limited liability company, family farm limited
2 12 partnership, or family trust, as defined in section 9H.1.
2 13 7. "Farm estate" means the real and personal property of a
2 14 decedent, a ward, or a trust as provided in chapter 633, if at
2 15 least sixty percent of the gross receipts from the estate
2 16 comes from farming.
2 17 8. "Farmers cooperative association" means a cooperative
2 18 association organized under chapter 490 or 499, if all of the
2 19 following conditions are satisfied:
2 20 a. All of the following apply:
2 21 (1) Qualified farmers must hold at least a fifty-one
2 22 percent equity interest in the cooperative association,
2 23 including fifty-one percent of each class of members' equity.
2 24 (2) The following persons must hold at least a seventy
2 25 percent equity interest in the cooperative association,
2 26 including seventy percent of each class of members' equity:
2 27 (a) A qualified farmer.
2 28 (b) A family farm entity.
2 29 (c) A commodity share landlord.
2 30 b. As used in this subsection, "members' equity" includes
2 31 but is not limited to issued shares, including common stock or
2 32 preferred stock, regardless of a right to receive dividends or
2 33 earning distributions. However, "members' equity" does not
2 34 include nonvoting common stock or nonvoting membership
2 35 interests. A security such as a warrant or option that may be
3 1 converted to voting stock shall be considered as issued
3 2 shares.
3 3 c. For purposes of this subsection, a person who was a
3 4 qualified person within the last ten years shall be treated as
3 5 a qualified person.
3 6 9. "Farmers cooperative limited liability company" means a
3 7 limited liability company organized under chapter 490A, if
3 8 cooperative associations hold one hundred percent of all
3 9 membership interests in the limited liability company.
3 10 Farmers cooperative associations must hold at least seventy
3 11 percent of all membership interests in the limited liability
3 12 company. If more than one type of membership interest is
3 13 established, including any series as provided in section
3 14 490A.305 or any class or group as provided in section
3 15 490A.307, farmers cooperative associations must hold at least
3 16 seventy percent of all membership interests of that type.
3 17 10. "Farmers entity" means a networking farmers entity,
3 18 farmers cooperative limited liability company, or farmers
3 19 cooperative association.
3 20 11. "Farming" means the same as defined in section 9H.1.
3 21 12. "Grain" means the same as defined in section 203.1.
3 22 13. "Intra-company loan agreement" means an agreement
3 23 involving a loan, if the parties to the agreement are members
3 24 of the same farmers cooperative limited liability company, and
3 25 according to the terms of the loan a member which is a
3 26 regional cooperative association directly or indirectly loans
3 27 money to a member which is a farmers cooperative association,
3 28 on condition that the money, including any interest, must be
3 29 repaid by the member which is a farmers cooperative
3 30 association to the regional cooperative association or another
3 31 person. A loan agreement does not include an operating loan
3 32 agreement, in which all of the following apply:
3 33 a. The money is required to be repaid within ninety days
3 34 from the date that the farmers cooperative association
3 35 receives the money, and the money is actually repaid by that
4 1 date.
4 2 b. The money is used to pay for reasonable and ordinary
4 3 expenses of the farmers cooperative association in conducting
4 4 its affairs.
4 5 14. "Livestock" means an animal belonging to the bovine,
4 6 caprine, equine, ovine, or porcine species, ostriches, rheas,
4 7 emus, farm deer as defined in section 481A.1, or poultry.
4 8 15. "Networking farmers corporation" means a corporation,
4 9 other than a family farm corporation as defined in section
4 10 9H.1, organized under chapter 490 if all of the following
4 11 conditions are satisfied:
4 12 a. All of the following apply:
4 13 (1) Qualified farmers must hold at least fifty-one percent
4 14 of all issued shares of the corporation. If more than one
4 15 class of shares is authorized, qualified farmers must hold at
4 16 least fifty-one percent of all issued shares in each class.
4 17 (2) Qualified persons must hold at least seventy percent
4 18 of all issued shares of the corporation. If more than one
4 19 class of shares is authorized, qualified persons must hold at
4 20 least seventy percent of all issued shares in each class.
4 21 b. As used in paragraph "a", "issued shares" includes but
4 22 is not limited to common stock or preferred stock, or each
4 23 class of common stock or preferred stock, regardless of voting
4 24 rights or a right to receive dividends or earning
4 25 distributions. A security such as a warrant or option that
4 26 may be converted to stock shall be considered as issued
4 27 shares.
4 28 16. "Networking farmers entity" means a networking farmers
4 29 corporation or networking farmers limited liability company.
4 30 17. "Networking farmers limited liability company" means a
4 31 limited liability company, other than a family farm limited
4 32 liability company as defined in section 9H.1, organized under
4 33 chapter 490A if all of the following conditions are satisfied:
4 34 a. Qualified farmers must hold at least fifty-one percent
4 35 of all membership interests in the limited liability company.
5 1 If more than one type of membership interest is established,
5 2 including any series as provided in section 490A.305 or any
5 3 class or group as provided in section 490A.307, qualified
5 4 farmers must hold at least fifty-one percent of all membership
5 5 interests of that type.
5 6 b. Qualified persons must hold at least seventy percent of
5 7 all membership interests in the limited liability company. If
5 8 more than one type of membership interest is established,
5 9 including any series as provided in section 490A.305 or any
5 10 class or group as provided in section 490A.307, qualified
5 11 persons must hold at least seventy percent of all membership
5 12 interests of that type.
5 13 18. "Operation of law" means a transfer by inheritance,
5 14 devise, or bequest, court order, dissolution decree, order in
5 15 bankruptcy, insolvency, replevin, foreclosure, execution sale,
5 16 the execution of a judgment, the foreclosure of a real estate
5 17 mortgage, the forfeiture of a real estate contract, or a
5 18 transfer resulting from a decree for specific performance.
5 19 19. "Qualified farmer" means any of the following:
5 20 a. A natural person actively engaged in farming.
5 21 b. A general partnership as provided in chapter 486 in
5 22 which all partners are natural persons actively engaged in
5 23 farming.
5 24 c. A farm estate.
5 25 20. "Qualified commodity share landlord" means a commodity
5 26 share landlord, if the owner of the agricultural land was
5 27 actively engaged in farming the land or a family member of the
5 28 owner is or was actively engaged in farming the land, if the
5 29 family member is related to the owner as a spouse, parent,
5 30 grandparent, lineal ascendant of a grandparent or spouse, or
5 31 other lineal descendant of a grandparent or spouse.
5 32 21. "Qualified person" means a person who is any of the
5 33 following:
5 34 a. A qualified farmer.
5 35 b. A family farm entity.
6 1 c. A qualified commodity share landlord.
6 2 22. "Regional cooperative association" means a cooperative
6 3 association other than a farmers cooperative association.
6 4 Sec. 102. NEW SECTION. 10.2 INTERESTS DESCRIBED.
6 5 As used in this chapter, the following apply:
6 6 1. A person holds an interest in agricultural land if the
6 7 person either directly or indirectly owns or leases the
6 8 agricultural land in this state.
6 9 2. A person holds an interest in a farmers entity if the
6 10 person holds an interest as any of the following:
6 11 a. A shareholder of a networking farmers corporation.
6 12 b. A member of a networking farmers limited liability
6 13 company.
6 14 c. A member of a farmers cooperative association.
6 15 d. A member of a farmers cooperative limited liability
6 16 company.
6 17 SUBCHAPTER II – RESTRICTIONS
6 18 PART 1
6 19 NETWORKING FARMERS CORPORATIONS
6 20 Sec. 103. NEW SECTION. 10.3 LANDHOLDINGS RESTRICTED.
6 21 1. Notwithstanding section 9H.4, a networking farmers
6 22 corporation may hold agricultural land in this state if it
6 23 meets all of the following conditions:
6 24 a. The networking farmers corporation does not hold an
6 25 interest in agricultural land of more than six hundred forty
6 26 acres.
6 27 b. At least seventy-five percent of the networking farmers
6 28 corporation's gross receipts are from the sale of livestock or
6 29 livestock products.
6 30 2. a. An interest in agricultural land held by a
6 31 networking farmers corporation shall be attributable as an
6 32 interest in agricultural land held by a shareholder having an
6 33 interest in the networking farmers corporation. The
6 34 shareholder shall be deemed to hold an interest in
6 35 agricultural land held by the networking farmers corporation
7 1 in proportion to the interest that the shareholder holds in
7 2 the networking farmers corporation.
7 3 b. Except to the extent provided in this paragraph, a
7 4 shareholder holding agricultural land by attribution shall be
7 5 subject to landholding restrictions imposed pursuant to the
7 6 Code, including sections 9H.4, 9H.5, 501.103, and 567.3.
7 7 However, notwithstanding section 9H.4, a cooperative
7 8 association may hold an interest in any number of farmers
7 9 entities, if the total number of acres held by the farmers
7 10 entities and attributable to the cooperative association is
7 11 six hundred forty acres or less.
7 12 c. The shareholder's proportionate interest shall be
7 13 calculated by multiplying the number of acres of agricultural
7 14 land held by the networking farmers corporation by the
7 15 percentage interest in the networking farmers corporation held
7 16 by the shareholder.
7 17 3. In the event of a transfer of an interest in the
7 18 networking farmers corporation by operation of law, the
7 19 corporation may disregard the transfer for purposes of
7 20 determining compliance with subsection 1 for a period of two
7 21 years after the transfer.
7 22 Sec. 104. NEW SECTION. 10.4 MULTIPLE INTERESTS
7 23 RESTRICTED.
7 24 1. A person who holds an interest in a networking farmers
7 25 corporation holding an interest in agricultural land pursuant
7 26 to section 10.3 shall not hold an interest in another farmers
7 27 entity if any of the following applies:
7 28 a. The person holds a twenty-five percent or greater
7 29 interest in a networking farmers corporation having six or
7 30 fewer stockholders.
7 31 b. The person holds a fifteen percent or greater interest
7 32 in a networking farmers corporation having seven or more
7 33 stockholders.
7 34 2. A person who holds a majority interest in an authorized
7 35 entity shall not hold a majority interest in a networking
8 1 farmers corporation.
8 2 3. A qualified commodity share landlord who owns an
8 3 interest in a networking farmers corporation holding
8 4 agricultural land under section 10.3 must rent an additional
8 5 one hundred fifty acres of agricultural land on a commodity
8 6 share basis for each farmers entity holding agricultural land
8 7 under this chapter in which the commodity share landlord
8 8 acquires an interest.
8 9 PART 2
8 10 NETWORKING FARMERS
8 11 LIMITED LIABILITY COMPANIES
8 12 Sec. 105. NEW SECTION. 10.5 LANDHOLDINGS RESTRICTED.
8 13 1. Notwithstanding section 9H.4, a networking farmers
8 14 limited liability company may hold agricultural land in this
8 15 state if it meets all of the following conditions:
8 16 a. The networking farmers limited liability company does
8 17 not hold an interest in agricultural land of more than six
8 18 hundred forty acres.
8 19 b. At least seventy-five percent of the networking farmers
8 20 limited liability company's gross receipts from farming are
8 21 from the sale of livestock or livestock products.
8 22 2. a. An interest in agricultural land held by a
8 23 networking farmers limited liability company shall be
8 24 attributable as an interest in agricultural land held by a
8 25 member having an interest in the networking farmers limited
8 26 liability company. The member shall be deemed to hold an
8 27 interest in agricultural land held by the networking farmers
8 28 limited liability company in proportion to the interest that
8 29 the member holds in the networking farmers limited liability
8 30 company.
8 31 b. Except to the extent provided in this paragraph, a
8 32 member holding agricultural land by attribution shall be
8 33 subject to landholding restrictions imposed pursuant to the
8 34 Code, including sections 9H.4, 9H.5, 501.103, and 567.3.
8 35 However, notwithstanding section 9H.4, a cooperative
9 1 association may hold an interest in any number of farmers
9 2 entities, if the total number of acres held by the farmers
9 3 entities and attributable to the cooperative association is
9 4 six hundred forty acres or less.
9 5 c. The member's proportionate interest shall be calculated
9 6 by multiplying the number of acres of agricultural land held
9 7 by the networking farmers limited liability company by the
9 8 percentage interest in the networking farmers limited
9 9 liability company held by the member.
9 10 3. In the event of a transfer of an interest in the
9 11 networking farmers limited liability company by operation of
9 12 law, the networking farmers limited liability company may
9 13 disregard the transfer for purposes of determining compliance
9 14 with subsection 1 for a period of two years after the
9 15 transfer.
9 16 Sec. 106. NEW SECTION. 10.6 MULTIPLE INTERESTS
9 17 RESTRICTED.
9 18 1. A person who holds an interest in a networking farmers
9 19 limited liability company holding an interest in agricultural
9 20 land pursuant to section 10.5 shall not hold an interest in
9 21 another farmers entity, if any of the following applies:
9 22 a. The person holds a twenty-five percent or greater
9 23 interest in a networking farmers limited liability company
9 24 having six or fewer members.
9 25 b. The person holds a fifteen percent or greater interest
9 26 in a networking farmers limited liability company having seven
9 27 or more members.
9 28 2. A person who holds a majority interest in an authorized
9 29 entity shall not hold a majority interest in a networking
9 30 farmers limited liability company.
9 31 3. A qualified commodity share landlord who owns an
9 32 interest in a networking farmers limited liability company
9 33 holding agricultural land under section 10.5 must rent an
9 34 additional one hundred fifty acres of agricultural land on a
9 35 commodity share basis for each farmers entity holding
10 1 agricultural land under this chapter in which the commodity
10 2 share landlord acquires an interest.
10 3 PART 3
10 4 FARMERS COOPERATIVE ASSOCIATIONS
10 5 Sec. 107. NEW SECTION. 10.7 LANDHOLDINGS RESTRICTED.
10 6 1. Notwithstanding section 9H.4, a farmers cooperative
10 7 association may hold agricultural land in this state if it
10 8 meets all of the following conditions:
10 9 a. The farmers cooperative association does not hold an
10 10 interest in agricultural land of more than six hundred and
10 11 forty acres.
10 12 b. The farmers cooperative association does not produce,
10 13 including by planting or harvesting, forage or grain on
10 14 agricultural land in which the farmers cooperative association
10 15 holds an interest. However, the farmers cooperative
10 16 association may enter into an agreement under a lease or
10 17 production contract with a person to produce the forage or
10 18 grain, if the farmers cooperative association does not receive
10 19 forage or grain in payment under the agreement. The lease or
10 20 contract may specify the type of forage or grain that must be
10 21 produced and provide that the farmers cooperative association
10 22 has a right to purchase the forage or grain on the same terms
10 23 and conditions as the highest bona fide offer received by the
10 24 person for the forage or grain, within a period agreed to by
10 25 the parties to the lease or production contract.
10 26 2. a. Except as provided in this section, an interest in
10 27 agricultural land held by a farmers cooperative association
10 28 shall be attributable as an interest in agricultural land held
10 29 by a member having an interest in the farmers cooperative
10 30 association. The member shall be deemed to hold an interest
10 31 in agricultural land held by the farmers cooperative
10 32 association in proportion to the interest that the member
10 33 holds in the farmers cooperative association.
10 34 b. Except to the extent provided in this paragraph, a
10 35 member holding agricultural land by attribution shall be
11 1 subject to landholding restrictions imposed pursuant to the
11 2 Code, including sections 9H.4, 9H.5, 501.103, and 567.3.
11 3 However, notwithstanding section 9H.4, all of the following
11 4 shall apply:
11 5 (1) A cooperative association may hold an interest in any
11 6 number of farmers entities, if the total number of acres held
11 7 by the farmers entities and attributable to the cooperative
11 8 association is six hundred forty acres or less.
11 9 (2) An interest in agricultural land held by a farmers
11 10 cooperative association shall not be attributable to a member
11 11 who is an entity organized under state law, if the entity
11 12 holds a five percent or less interest in the farmers
11 13 cooperative association.
11 14 c. The member's proportionate interest shall be calculated
11 15 by multiplying the number of acres of agricultural land held
11 16 by the farmers cooperative association by the percentage
11 17 interest in the farmers cooperative association held by the
11 18 member.
11 19 3. In the event of a transfer of an interest in a farmers
11 20 cooperative association by operation of law, the association
11 21 may disregard the transfer for purposes of determining
11 22 compliance with subsection 1 for a period of two years after
11 23 the transfer.
11 24 Sec. 108. NEW SECTION. 10.8 MULTIPLE INTERESTS
11 25 RESTRICTED.
11 26 1. A person who holds an interest in a farmers cooperative
11 27 association holding an interest in agricultural land pursuant
11 28 to section 10.7 shall not hold an interest in another farmers
11 29 entity if any of the following applies:
11 30 a. The person holds a twenty-five percent or greater
11 31 interest in a farmers cooperative association having six or
11 32 fewer members.
11 33 b. The person holds a fifteen percent or greater interest
11 34 in a farmers cooperative association having seven or more
11 35 members.
12 1 2. A person who holds a majority interest in an authorized
12 2 entity shall not hold a majority interest in a farmers
12 3 cooperative association.
12 4 Sec. 109. NEW SECTION. 10.8A PROCEDURE FOR ACQUISITION
12 5 – REVERSE REFERENDUM; DISSENT.
12 6 A farmers cooperative association shall not acquire an
12 7 interest in agricultural land or in a farmers entity, unless
12 8 all of the following apply:
12 9 1. The board of directors of the farmers cooperative
12 10 association adopts a resolution authorizing the acquisition.
12 11 Except as provided in this section, the resolution shall
12 12 become effective thirty-one days from the date that the
12 13 resolution was adopted. The farmers cooperative association
12 14 is not required to comply with the procedures of this section
12 15 for as long as the resolution remains in effect. The
12 16 resolution shall contain all of the following:
12 17 a. A declaration stating that the farmers cooperative
12 18 association reserves the right to acquire agricultural land or
12 19 an interest in a farmers entity under this chapter.
12 20 b. A description of a planned acquisition, if any,
12 21 including the location of agricultural land planned to be
12 22 acquired, the identity of any farmers entity in which the
12 23 farmers cooperative association plans to acquire an interest,
12 24 and the nature of any farming operation which is planned to
12 25 occur on land acquired by the farmers cooperative association
12 26 or conducted by the farmers entity.
12 27 c. The date that the resolution was adopted and the date
12 28 that it will take effect.
12 29 2. Within five days following the date that the resolution
12 30 authorizing the farmers cooperative association to acquire an
12 31 interest in agricultural land or acquire an interest in a
12 32 farmers entity is adopted, the farmers cooperative association
12 33 must provide notice of the resolution as provided in this
12 34 section. The notice shall be in the following form:
12 35 NOTICE
13 1 MEMBERS OF THE (INSERT NAME OF THE FARMERS
13 2 COOPERATIVE ASSOCIATION)
13 3 THE (INSERT NAME OF THE FARMERS COOPERATIVE ASSOCIATION) IS
13 4 PLANNING ON ACQUIRING AN INTEREST IN AGRICULTURAL LAND WHICH
13 5 MAY BE USED FOR FARMING OR ACQUIRING AN INTEREST IN A BUSINESS
13 6 THAT OWNS AGRICULTURAL LAND THAT MAY BE USED FOR FARMING.
13 7 UNDER IOWA CODE CHAPTER 10, THE (INSERT NAME OF THE FARMERS
13 8 COOPERATIVE ASSOCIATION) IS A FARMERS COOPERATIVE ASSOCIATION.
13 9 WITHIN A LIMITED TIME PERIOD: (1) VOTING MEMBERS MAY PETITION
13 10 A FARMERS COOPERATIVE ASSOCIATION TO REQUIRE A MEMBERSHIP VOTE
13 11 TO APPROVE THE ACQUISITION; AND (2) ALL HOLDERS OF MEMBERS'
13 12 EQUITY MAY DEMAND PAYMENT OF THE FAIR VALUE OF THEIR
13 13 INTERESTS.
13 14 a. The notice must be published in a newspaper having a
13 15 general circulation in the county where the farmers
13 16 cooperative association is located as provided in section
13 17 618.3. The notice shall be printed as provided in section
13 18 618.17.
13 19 b. The notice shall be delivered to all holders of
13 20 members' equity in the farmers cooperative association,
13 21 including members and shareholders, by mailing the notice to
13 22 the holder's last known address as shown on the books of the
13 23 farmers cooperative association. The notice shall be
13 24 accompanied by a copy of the resolution adopted by the board
13 25 pursuant to this section, and a copy of this section.
13 26 3. Within thirty days following the date that the
13 27 resolution authorizing the farmers cooperative association to
13 28 acquire an interest in agricultural land or acquire an
13 29 interest in a farmers entity is adopted, at least twenty
13 30 percent of the voting members of the farmers cooperative
13 31 association may file a petition with the board of directors
13 32 demanding a referendum under this subsection.
13 33 a. If a valid petition is filed, the board of directors
13 34 shall call a special referendum of voting members at a regular
13 35 or special meeting, as provided in section 499.27. The filing
14 1 of the petition suspends the effectiveness of the resolution
14 2 until a referendum is conducted as provided in this
14 3 subsection.
14 4 b. The resolution shall not become effective as otherwise
14 5 provided in this section, until the resolution is approved by
14 6 a majority vote of the voting members of the farmers
14 7 cooperative association casting ballots at the meeting to
14 8 conduct the referendum.
14 9 4. a. Within thirty days following the date that the
14 10 resolution authorizing the farmers cooperative association to
14 11 acquire an interest in agricultural land or acquire an
14 12 interest in a farmers entity is adopted, a holder of members'
14 13 equity, including a member or shareholder, may dissent to an
14 14 acquisition as expressed in the resolution adopted by the
14 15 board of directors under this section.
14 16 b. The holder of members' equity shall dissent by filing a
14 17 demand with the board of directors. The farmers cooperative
14 18 association shall pay the holder the fair value of that
14 19 holder's interest as if the holder were a member dissenting to
14 20 a merger or consolidation, as provided in section 499.66, upon
14 21 surrender of the holder's evidence of equity in the farmers
14 22 cooperative association, including a certificate of membership
14 23 or shares.
14 24 c. The farmers cooperative association is not required to
14 25 pay the holder of members' equity the fair value of that
14 26 holder's interest as provided in this subsection, if the
14 27 resolution provided for in this section does not become
14 28 effective.
14 29 PART 4
14 30 FARMERS COOPERATIVE LIMITED
14 31 LIABILITY COMPANIES
14 32 Sec. 110. NEW SECTION. 10.9 LANDHOLDINGS RESTRICTED.
14 33 1. Notwithstanding section 9H.4, a farmers cooperative
14 34 limited liability company may hold agricultural land in this
14 35 state if it meets all of the following conditions:
15 1 a. The farmers cooperative limited liability company does
15 2 not hold an interest in agricultural land of more than six
15 3 hundred and forty acres.
15 4 b. The farmers cooperative limited liability company does
15 5 not produce, including by planting or harvesting, forage or
15 6 grain on agricultural land in which the farmers cooperative
15 7 limited liability company holds an interest. However, the
15 8 farmers cooperative limited liability company may enter into
15 9 an agreement under a lease or production contract with a
15 10 person to produce the forage or grain, if the farmers limited
15 11 liability company does not receive forage or grain in payment
15 12 under the agreement. The lease or contract may specify the
15 13 type of forage or grain that must be produced and provide that
15 14 the farmers cooperative limited liability company has a right
15 15 to purchase the forage or grain on the same terms and
15 16 conditions as the highest bona fide offer received by the
15 17 person for the forage or grain, within a period agreed to by
15 18 the parties to the lease or production contract.
15 19 c. Less than fifty percent of the interest in the farmers
15 20 cooperative limited liability company is held by members which
15 21 are parties to intra-company loan agreements. If more than
15 22 one type of membership interest is established, including any
15 23 series as provided in section 490A.305 or any class or group
15 24 as provided in section 490A.307, less than fifty percent of
15 25 the interest in each type of membership shall be held by
15 26 members which are parties to intra-company loan agreements.
15 27 d. The farmers cooperative limited liability company does
15 28 not own swine or contract for the care and feeding of swine,
15 29 if a member of the farmers cooperative limited liability
15 30 company is a regional cooperative association.
15 31 2. a. An interest in agricultural land held by a farmers
15 32 cooperative limited liability company shall be attributable as
15 33 an interest in agricultural land held by a member cooperative
15 34 association of the farmers cooperative limited liability
15 35 company. The member cooperative association shall be deemed
16 1 to hold an interest in agricultural land held by the farmers
16 2 cooperative limited liability company in proportion to the
16 3 interest that the member cooperative association holds in the
16 4 limited liability company.
16 5 b. Except to the extent provided in this paragraph, a
16 6 member holding agricultural land by attribution shall be
16 7 subject to landholding restrictions imposed pursuant to the
16 8 Code, including sections 9H.4, 9H.5, 501.103, and 567.3.
16 9 However, notwithstanding section 9H.4, a cooperative
16 10 association may hold an interest in any number of farmers
16 11 entities, if the total number of acres held by the farmers
16 12 entities and attributable to the cooperative association is
16 13 six hundred forty acres or less.
16 14 c. The member cooperative association's proportionate
16 15 interest shall be calculated by multiplying the number of
16 16 acres of agricultural land held by the farmers cooperative
16 17 limited liability company by the percentage interest in the
16 18 limited liability company held by the cooperative association
16 19 as a member.
16 20 3. In the event of a transfer of an interest in the
16 21 farmers cooperative limited liability company by operation of
16 22 law, the farmers cooperative limited liability company may
16 23 disregard the transfer for purposes of determining compliance
16 24 with subsection 1 for a period of two years after the
16 25 transfer.
16 26 SUBCHAPTER III – PENALTIES
16 27 Sec. 111. NEW SECTION. 10.10 LANDHOLDING RESTRICTIONS –
16 28 PENALTIES.
16 29 A person violating the landholding restrictions in section
16 30 10.3, 10.5, 10.7, or 10.9 shall be assessed a civil penalty of
16 31 not more than ten thousand dollars and shall divest itself of
16 32 any land held in violation of the section within one year
16 33 after judgment is entered ordering the farmers entity to
16 34 comply with that section, as provided in section 10.12.
16 35 Sec. 112. NEW SECTION. 10.11 MULTIPLE INTERESTS
17 1 RESTRICTED – PENALTIES.
17 2 1. A civil penalty of not more than one thousand dollars
17 3 may be imposed on a person who becomes one of the following:
17 4 a. A stockholder of a networking farmers corporation as
17 5 prohibited in section 10.4.
17 6 b. A member of a networking farmers limited liability
17 7 company as prohibited in section 10.6.
17 8 c. A member of a farmers cooperative association as
17 9 prohibited in section 10.8.
17 10 2. The person violating the section shall divest the
17 11 interest held by the person in a farmers entity or authorized
17 12 entity as is necessary to comply with this chapter, as
17 13 provided in section 10.12.
17 14 Sec. 113. NEW SECTION. 10.12 DIVESTITURE PROCEEDINGS.
17 15 The court may determine the method of divesting an interest
17 16 held by a person found to be in violation of this chapter. A
17 17 financial gain realized by a person who disposes of an
17 18 interest held in violation of this chapter shall be forfeited
17 19 to the state's general fund. All court costs and fees shall
17 20 be paid by the person holding the interest in violation of the
17 21 section.
17 22 Sec. 114. NEW SECTION. 10.13 INJUNCTIVE RELIEF.
17 23 The courts of this state may prevent and restrain
17 24 violations of this chapter through the issuance of an
17 25 injunction. The attorney general or a county attorney shall
17 26 institute suits on behalf of the state to prevent and restrain
17 27 violations of this chapter.
17 28 DIVISION II
17 29 REPORTS
17 30 Sec. 201. NEW SECTION. 10B.1 DEFINITIONS.
17 31 As used in this chapter, unless the context otherwise
17 32 requires:
17 33 1. "Agricultural land" means the same as defined in
17 34 section 9H.1.
17 35 2. "Cooperative association" means any entity organized on
18 1 a cooperative basis, including an association of persons
18 2 organized under chapter 497, 498, or 499; an entity composed
18 3 of entities organized under those chapters; or a cooperative
18 4 corporation organized under chapter 501.
18 5 3. "Corporation" means a domestic or foreign corporation,
18 6 including an entity organized pursuant to chapter 490, or a
18 7 nonprofit corporation.
18 8 4. "Farming" means the same as defined in section 9H.1.
18 9 5. "Foreign business" means the same as defined in section
18 10 567.1.
18 11 6. "Foreign government" means the same as defined in
18 12 section 567.1.
18 13 7. "Limited liability company" means a foreign or domestic
18 14 limited liability company, including a limited liability
18 15 company as defined in section 490A.102.
18 16 8. "Limited partnership" means a foreign or domestic
18 17 limited partnership, including a limited partnership as
18 18 defined in section 487.101, subsection 7.
18 19 9. "Nonprofit corporation" means any of the following:
18 20 a. A corporation organized under the provisions of former
18 21 chapter 504 or chapter 504A.
18 22 b. A corporation which qualifies under Title 26, section
18 23 501, of the United States Code.
18 24 10. "Nonresident alien" means the same as defined in
18 25 section 567.1.
18 26 11. "Reporting entity" means any of the following:
18 27 a. A corporation, other than a family farm corporation as
18 28 defined in section 9H.1, including an authorized farm
18 29 corporation as defined in section 9H.1 or networking farmers
18 30 corporation as defined in section 10.1, holding an interest in
18 31 agricultural land in this state.
18 32 b. A cooperative association holding an interest in
18 33 agricultural land in this state.
18 34 c. A limited partnership, other than a family farm limited
18 35 partnership as defined in section 9H.1, holding an interest in
19 1 agricultural land in this state.
19 2 d. A person acting in a fiduciary capacity or as a trustee
19 3 on behalf of a person, including a corporation, cooperative
19 4 association, limited liability company, or limited
19 5 partnership, which holds in a trust, other than through a
19 6 family trust as defined in section 9H.1, including through an
19 7 authorized trust, an interest in agricultural land in this
19 8 state.
19 9 e. A limited liability company, other than a family farm
19 10 limited liability company as defined in section 9H.1,
19 11 including an authorized limited liability company as defined
19 12 in section 9H.1, or a networking farmers limited liability
19 13 company or farmers cooperative limited liability company as
19 14 defined in section 10.1, holding an interest in agricultural
19 15 land in this state.
19 16 f. A foreign business holding an interest in agricultural
19 17 land in this state as provided in chapter 567.
19 18 g. A foreign government holding an interest in
19 19 agricultural land in this state as provided in chapter 567.
19 20 h. A nonresident alien holding an interest in agricultural
19 21 land in this state as provided in chapter 567.
19 22 Sec. 202. NEW SECTION. 10B.2 INTERESTS DESCRIBED.
19 23 A reporting entity holds an interest in agricultural land
19 24 if the reporting entity directly or indirectly owns or leases
19 25 agricultural land in this state.
19 26 Sec. 203. NEW SECTION. 10B.3 PERSONS REQUIRED TO FILE
19 27 REPORTS.
19 28 The reports required under section 10B.4 shall be signed
19 29 and filed by the following individuals required to submit
19 30 reports pursuant to that section for their respective
19 31 reporting entities:
19 32 1. A person serving as the president or other officer or
19 33 authorized representative of a corporation.
19 34 2. A person serving as the president or other officer or
19 35 authorized representative of a cooperative association.
20 1 3. A person acting as the general partner of a limited
20 2 partnership.
20 3 4. A person acting in a fiduciary capacity or as a trustee
20 4 on behalf of a person.
20 5 5. A person who is a member, manager, or authorized
20 6 representative of a limited liability company.
20 7 6. A person serving as the president or other officer or
20 8 authorized representative of a foreign business.
20 9 7. A person authorized to make the report by a foreign
20 10 government.
20 11 8. A nonresident alien or an agent, trustee, or fiduciary
20 12 of the nonresident alien.
20 13 Sec. 204. NEW SECTION. 10B.4 REPORTING REQUIREMENTS.
20 14 1. An annual report shall be filed by a reporting entity
20 15 with the secretary of state on or before March 31 of each year
20 16 as required by rules adopted by the secretary of state
20 17 pursuant to chapter 17A. The reports shall be filed on forms
20 18 prepared and supplied by the secretary of state.
20 19 2. A report required pursuant to this section shall
20 20 contain information for the last year regarding the reporting
20 21 entity as required by the secretary of state which shall at
20 22 least include all of the following:
20 23 a. The name and address of the reporting entity.
20 24 b. The name and address of the person supervising the
20 25 daily operations on the agricultural land in which the
20 26 reporting entity holds an interest.
20 27 c. The following information regarding each person who
20 28 holds an interest in the reporting entity:
20 29 (1) The name and address of the person.
20 30 (2) The person's citizenship, if other than the United
20 31 States.
20 32 (3) The percentage interest held by the person in the
20 33 reporting entity, unless the person is a natural person who
20 34 holds less than a ten percent interest in a reporting entity.
20 35 d. The percentage interest that a reporting entity holds
21 1 in another reporting entity, and the number of acres of
21 2 agricultural land that is attributable to the reporting entity
21 3 which holds an interest in another reporting entity as
21 4 provided in chapter 10.
21 5 e. A certification that the reporting entity meets all of
21 6 the requirements to lawfully hold agricultural land in this
21 7 state.
21 8 f. The number of acres of agricultural land held by the
21 9 reporting entity, including the following:
21 10 (1) The total number of acres in the state.
21 11 (2) The number of acres in each county identified by
21 12 county name.
21 13 (3) The number of acres owned.
21 14 (4) The number of acres leased.
21 15 (5) The number of acres held other than by ownership or
21 16 lease.
21 17 (6) The number of acres used for the production of row
21 18 crops.
21 19 3. A reporting entity other than a foreign business,
21 20 foreign government, or nonresident alien shall be excused from
21 21 filing a report with the secretary of state during any year in
21 22 which the reporting entity holds an interest in less than
21 23 twenty acres of agricultural land in this state and the gross
21 24 revenue produced from all farming on the land equals less than
21 25 ten thousand dollars.
21 26 Sec. 205. NEW SECTION. 10B.5 USE OF REPORTS.
21 27 1. The secretary of state shall notify the attorney
21 28 general when the secretary of state has reason to believe a
21 29 violation of this chapter has occurred.
21 30 2. Information provided in reports required in this
21 31 chapter shall be made available to members of the general
21 32 assembly and appropriate committees of the general assembly in
21 33 order to determine the extent that agricultural land is held
21 34 in this state by corporations and other business and foreign
21 35 entities and the effect of such land ownership upon the
22 1 economy of this state. The secretary of state shall assist
22 2 any committee of the general assembly studying these issues.
22 3 Sec. 206. NEW SECTION. 10B.6 PENALTIES.
22 4 1. The failure to timely file a report or the filing of
22 5 false information in a report as provided in section 10B.4 is
22 6 punishable by a civil penalty not to exceed one thousand
22 7 dollars.
22 8 2. The secretary of state shall notify a reporting entity
22 9 which the secretary of state has reason to believe is required
22 10 to file a report and who has not filed a timely report, that
22 11 the person may be in violation of section 10B.4. The
22 12 secretary of state shall include in the notice a statement of
22 13 the penalty which may be assessed if the required report is
22 14 not filed within thirty days. The secretary of state shall
22 15 refer to the attorney general any reporting entity which the
22 16 secretary of state has reason to believe is required to report
22 17 if, after thirty days from receipt of the notice, the
22 18 reporting entity has not filed the required report. The
22 19 attorney general may, upon referral from the secretary of
22 20 state, file an action in district court to seek the assessment
22 21 of a civil penalty of one hundred dollars for each day the
22 22 report is not filed.
22 23 Sec. 207. SUSPENSION OF REPORTING REQUIREMENTS.
22 24 1. A person required to file a report with the secretary
22 25 of state pursuant to this chapter is not required to file a
22 26 report with the secretary of state pursuant to section 9H.5A
22 27 or 501.103, subsection 3, or section 567.8.
22 28 2. This section is repealed on July 1, 2000.
22 29 DIVISION III
22 30 EFFECTIVE DATE
22 31 Sec. 301. EFFECTIVE DATE. This Act, being deemed of
22 32 immediate importance, takes effect upon enactment.
22 33
22 34
22 35
23 1 RON J. CORBETT
23 2 Speaker of the House
23 3
23 4
23 5
23 6 MARY E. KRAMER
23 7 President of the Senate
23 8
23 9 I hereby certify that this bill originated in the House and
23 10 is known as House File 2335, Seventy-seventh General Assembly.
23 11
23 12
23 13
23 14 ELIZABETH ISAACSON
23 15 Chief Clerk of the House
23 16 Approved , 1998
23 17
23 18
23 19
23 20 TERRY E. BRANSTAD
23 21 Governor
Text: HF02334 Text: HF02336 Text: HF02300 - HF02399 Text: HF Index Bills and Amendments: General Index Bill History: General Index
© 1998 Cornell College and League of Women Voters of Iowa
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