Text: HSB00500                          Text: HSB00502
Text: HSB00500 - HSB00599               Text: HSB Index
Bills and Amendments: General Index     Bill History: General Index



House Study Bill 501

Bill Text

PAG LIN
  1  1                           ARTICLE XII
  1  2             NETWORKING FARMERS LIMITED PARTNERSHIPS
  1  3    Section 1.  NEW SECTION.  487.1201  DEFINITIONS.
  1  4    As used in this Article, unless the context otherwise
  1  5 requires:
  1  6    1.  "Actively engaged in farming" means the same as defined
  1  7 in section 9H.1.
  1  8    2.  "Agricultural land" means the same as defined in
  1  9 section 9H.1.
  1 10    3.  "Authorized entity" means an authorized farm
  1 11 corporation; authorized limited liability company; limited
  1 12 partnership, other than a family farm limited partnership; or
  1 13 an authorized trust, as defined in section 9H.1.
  1 14    4.  "Family farm entity" means a family farm corporation,
  1 15 family farm limited liability company, family farm limited
  1 16 partnership, or family trust, as defined in section 9H.1.
  1 17    5.  "Farm estate" means the real and personal property of a
  1 18 decedent, a ward, or a trust as provided in chapter 633, if at
  1 19 least sixty percent of the gross income from the estate comes
  1 20 from farming.
  1 21    6.  "Farmers cooperative association" means the same as
  1 22 defined in section 499.91.
  1 23    7.  "Farmers cooperative limited liability company" means
  1 24 the same as defined in section 490A.1701.
  1 25    8.  "Farmers entity" means a networking farmers entity,
  1 26 farmers cooperative limited liability company, or farmers
  1 27 cooperative association.
  1 28    9.  "Farming" means the same as defined in section 9H.1.
  1 29    10.  "Livestock" means an animal belonging to the bovine,
  1 30 caprine, equine, ovine, or porcine species, ostriches, rheas,
  1 31 emus, farm deer as defined in section 481A.1, or poultry.
  1 32    11.  "Networking farmers corporation" means the same as
  1 33 defined in section 490.1711.
  1 34    12.  "Networking farmers entity" means a networking farmers
  1 35 limited partnership, networking farmers corporation, or
  2  1 networking farmers limited liability company.
  2  2    13.  "Networking farmers limited liability company" means
  2  3 the same as defined in section 490A.1701.
  2  4    14.  "Networking farmers limited partnership" means a
  2  5 limited partnership organized under this chapter if all of the
  2  6 following conditions are satisfied:
  2  7    a.  At least seventy percent of the partnership interest is
  2  8 held by qualified persons.
  2  9    b.  At least seventy percent of votes that may be cast by
  2 10 general partners is held by qualified persons.
  2 11    15.  "Qualified person" means any of the following:
  2 12    a.  A natural person actively engaged in farming.
  2 13    b.  A general partnership as provided in chapter 486 in
  2 14 which all partners are natural persons actively engaged in
  2 15 farming.
  2 16    c.  A family farm entity.
  2 17    d.  A person who owns at least one hundred fifty acres of
  2 18 agricultural land and receives as rent a share of the crops or
  2 19 the animals raised on the land, provided that the person is a
  2 20 natural person or a general partnership as provided in chapter
  2 21 486 in which all persons are natural persons.
  2 22    e.  A farm estate.
  2 23    Sec. 2.  NEW SECTION.  487.1202  INTERESTS DESCRIBED.
  2 24    As used in this Article, the following apply:
  2 25    1.  A person holds an interest in agricultural land if the
  2 26 person directly or indirectly owns, leases, or has a legal or
  2 27 equitable interest in agricultural land.
  2 28    2.  A person holds an interest in a farmers entity if the
  2 29 person holds an interest as any of the following:
  2 30    a.  A member of a farmers cooperative association.
  2 31    b.  A member of a farmers cooperative limited liability
  2 32 company.
  2 33    c.  A shareholder of a networking farmers corporation.
  2 34    d.  A member of a networking farmers limited liability
  2 35 company.
  3  1    e.  A general partner or limited partner of a networking
  3  2 farmers limited partnership.
  3  3    Sec. 3.  NEW SECTION.  487.1203  LANDHOLDINGS RESTRICTED.
  3  4    1.  Notwithstanding section 9H.5, a networking farmers
  3  5 limited partnership may hold agricultural land in this state
  3  6 if it meets all of the following conditions:
  3  7    a.  The limited partnership does not hold an interest in
  3  8 agricultural land of more than one thousand five hundred
  3  9 acres.
  3 10    b.  At least seventy-five percent of the limited
  3 11 partnership's gross income from farming is from the sale of
  3 12 livestock or livestock products.
  3 13    2.  a.  Notwithstanding section 9H.5, if a person holds an
  3 14 interest in a networking farmers limited partnership, that
  3 15 interest shall not be treated as an interest in agricultural
  3 16 land.
  3 17    b.  Notwithstanding section 9H.5, if an authorized entity
  3 18 holds an interest in a networking farmers limited partnership,
  3 19 the number of acres of agricultural land in which the limited
  3 20 partnership holds an interest shall not be attributable to the
  3 21 authorized entity when calculating the number of acres of
  3 22 agricultural land that the entity may hold under section 9H.5.
  3 23    3.  In the event of a transfer of an interest in the
  3 24 networking farmers limited partnership by operation of law as
  3 25 a result of death, divorce, or bankruptcy, or pursuant to a
  3 26 security interest, the limited partnership may disregard the
  3 27 transfer for purposes of determining compliance with
  3 28 subsection 1 for a period of two years after the transfer.
  3 29    Sec. 4.  NEW SECTION.  487.1204  MULTIPLE INTERESTS
  3 30 RESTRICTED.
  3 31    A person who holds an interest in a networking farmers
  3 32 limited partnership holding an interest in agricultural land
  3 33 pursuant to section 487.1203 shall not hold an interest in
  3 34 another farmers entity if any of the following applies:
  3 35    1.  The person holds a twenty-five percent or greater
  4  1 interest in a networking farmers limited partnership with six
  4  2 or fewer limited partners.
  4  3    2.  The person holds a fifteen percent or greater interest
  4  4 in a networking farmers limited partnership with seven or more
  4  5 limited partners.
  4  6    Sec. 5.  NEW SECTION.  487.1205  REPORTING REQUIREMENTS.
  4  7    1.  A networking farmers limited partnership that claims it
  4  8 is exempt from the restrictions of section 9H.5 pursuant to
  4  9 section 487.1203 shall file an annual report with the
  4 10 secretary of state on or before March 31 of each year on forms
  4 11 adopted pursuant to chapter 17A and supplied by the secretary
  4 12 of state.
  4 13    2.  The report shall be signed by a general partner or
  4 14 other officer or authorized representative of the limited
  4 15 partnership.
  4 16    3.  The report shall contain information for the last year
  4 17 regarding the limited partnership, including all of the
  4 18 following:
  4 19    a.  The name and address of the limited partnership.
  4 20    b.  The name and address of the person supervising the
  4 21 daily operations on the agricultural land.
  4 22    c.  The name, address, and citizenship, if other than
  4 23 United States citizenship, of each general partner and limited
  4 24 partner.
  4 25    d.  A certification that the limited partnership meets all
  4 26 of the requirements of a networking farmers limited
  4 27 partnership.
  4 28    e.  The number of acres of agricultural land held by the
  4 29 limited partnership, including the following:
  4 30    (1)  The total number of acres in the state.
  4 31    (2)  The number of acres in each county identified by
  4 32 county name.
  4 33    (3)  The number of acres owned.
  4 34    (4)  The number of acres leased.
  4 35    (5)  The number of acres held other than by ownership or
  5  1 lease.
  5  2    (6)  The number of acres used for the production of row
  5  3 crops.
  5  4    (7)  The approximate animal weight capacity of the
  5  5 livestock operation.
  5  6    4.  A networking farmers limited partnership shall be
  5  7 excused from filing a report with the secretary of state
  5  8 during any year in which the limited partnership holds an
  5  9 interest in less than twenty acres of agricultural land in
  5 10 this state and the gross revenue produced from all farming on
  5 11 the land equals less than ten thousand dollars.  If a
  5 12 networking farmers limited partnership is excused from filing
  5 13 a report with the secretary of state as provided in this
  5 14 subsection in the immediately prior reporting year, the
  5 15 secretary of state is not required to deliver a form to the
  5 16 limited partnership for the current reporting year, unless
  5 17 requested by the limited partnership.
  5 18    5.  A report required pursuant to this section shall be in
  5 19 lieu of any report which is also required by a networking
  5 20 farmers limited partnership which holds agricultural land
  5 21 pursuant to section 9H.5A.
  5 22    6.  Notwithstanding chapter 22, reports required in this
  5 23 section shall be confidential reports except as to the
  5 24 attorney general for review and appropriate action when
  5 25 necessary.
  5 26    7.  The secretary of state shall assist any committee of
  5 27 the general assembly studying the effects of this Article and
  5 28 the practices this Article regulates, to the same extent
  5 29 required pursuant to section 9H.14.
  5 30    Sec. 6.  NEW SECTION.  487.1206  PENALTIES.
  5 31    1.  a.  A networking farmers limited partnership violating
  5 32 section 487.1203 shall be assessed a civil penalty of not more
  5 33 than ten thousand dollars and shall divest itself of any land
  5 34 held in violation of that section within one year after
  5 35 judgment is entered ordering the limited partnership to comply
  6  1 with that section.
  6  2    b.  A civil penalty of not more than one thousand dollars
  6  3 may be imposed on a person who becomes a member of a limited
  6  4 partnership in violation of section 487.1204.  The person
  6  5 violating the section shall divest the interest held by the
  6  6 person in a farmers entity or authorized entity as is
  6  7 necessary to comply with that section.
  6  8    2.  The court may determine the method of divesting an
  6  9 interest held by a person found to be in violation of section
  6 10 487.1203 or 487.1204.  A financial gain realized by a person
  6 11 who disposes of an interest held in violation of those
  6 12 sections shall be forfeited to the state's general fund.  All
  6 13 court costs and fees shall be paid by the person holding the
  6 14 interest in violation of the section.
  6 15    3.  The courts of this state may prevent and restrain
  6 16 violations of this Article or section 487.1203 or 487.1204
  6 17 through the issuance of an injunction.  The attorney general
  6 18 or a county attorney shall institute suits on behalf of the
  6 19 state to prevent and restrain violations of this Article or
  6 20 section 487.1203 or 487.1204.
  6 21    4.  a.  The failure to timely file a report or the filing
  6 22 of false information in a report as provided in section
  6 23 487.1205 is punishable by a civil penalty not to exceed one
  6 24 thousand dollars.
  6 25    b.  The secretary of state shall notify a person who the
  6 26 secretary has reason to believe is required to file a report
  6 27 as provided by this Article and who has not filed a timely
  6 28 report, that the person may be in violation of section
  6 29 487.1205.  The secretary of state shall include in the notice
  6 30 a statement of the penalty which may be assessed if the
  6 31 required report is not filed within thirty days.  The
  6 32 secretary of state shall refer to the attorney general any
  6 33 person who the secretary has reason to believe is required to
  6 34 report if, after thirty days from receipt of the notice, the
  6 35 person has not filed the required report.  The attorney
  7  1 general may, upon referral from the secretary of state, file
  7  2 an action in district court to seek the assessment of a civil
  7  3 penalty of one hundred dollars for each day the report is not
  7  4 filed.  
  7  5                         DIVISION XVIII
  7  6                 NETWORKING FARMERS CORPORATIONS
  7  7    Sec. 7.  NEW SECTION.  490.1711  DEFINITIONS.
  7  8    As used in this division, unless the context otherwise
  7  9 requires:
  7 10    1.  "Actively engaged in farming" means the same as defined
  7 11 in section 9H.1.
  7 12    2.  "Agricultural land" means the same as defined in
  7 13 section 9H.1.
  7 14    3.  "Authorized entity" means an authorized farm
  7 15 corporation; authorized limited liability company; limited
  7 16 partnership, other than a family farm limited partnership; or
  7 17 an authorized trust as defined in section 9H.1.
  7 18    4.  "Family farm entity" means a family farm corporation,
  7 19 family farm limited liability company, family farm limited
  7 20 partnership, or family trust, as defined in section 9H.1.
  7 21    5.  "Farm estate" means the real and personal property of a
  7 22 decedent, a ward, or a trust as provided in chapter 633, if at
  7 23 least sixty percent of the gross income from the estate comes
  7 24 from farming.
  7 25    6.  "Farmers cooperative association" means the same as
  7 26 defined in section 499.91.
  7 27    7.  "Farmers cooperative limited liability company" means
  7 28 the same as defined in section 490A.1701.
  7 29    8.  "Farmers entity" means a networking farmers entity,
  7 30 farmers cooperative limited liability company, or farmers
  7 31 cooperative association.
  7 32    9.  "Farming" means the same as defined in section 9H.1.
  7 33    10.  "Livestock" means an animal belonging to the bovine,
  7 34 caprine, equine, ovine, or porcine species, ostriches, rheas,
  7 35 emus, farm deer as defined in section 481A.1, or poultry.
  8  1    11.  "Networking farmers corporation" means a corporation
  8  2 organized under this chapter if all of the following
  8  3 conditions are satisfied:
  8  4    a.  At least seventy percent of the corporation's stock is
  8  5 held by qualified persons.
  8  6    b.  At least seventy percent of the corporation's voting
  8  7 stock is held by qualified persons.
  8  8    12.  "Networking farmers entity" means a networking farmers
  8  9 corporation, networking farmers limited partnership, or
  8 10 networking farmers limited liability company.
  8 11    13.  "Networking farmers limited liability company" means
  8 12 the same as defined in section 490A.1701.
  8 13    14.  "Networking farmers limited partnership" means the
  8 14 same as defined in section 487.1201.
  8 15    15.  "Qualified person" means any of the following:
  8 16    a.  A natural person actively engaged in farming.
  8 17    b.  A general partnership as provided in chapter 486 in
  8 18 which all partners are natural persons actively engaged in
  8 19 farming.
  8 20    c.  A family farm entity.
  8 21    d.  A person who owns at least one hundred fifty acres of
  8 22 agricultural land and receives as rent a share of the crops or
  8 23 the animals raised on the land, provided that the person is a
  8 24 natural person or a general partnership as provided in chapter
  8 25 486 in which all persons are natural persons.
  8 26    e.  A farm estate.
  8 27    Sec. 8.  NEW SECTION.  490.1712  INTERESTS DESCRIBED.
  8 28    As used in this division, the following apply:
  8 29    1.  A person holds an interest in agricultural land if the
  8 30 person directly or indirectly owns, leases, or has a legal or
  8 31 equitable interest in agricultural land.
  8 32    2.  A person holds an interest in a farmers entity if the
  8 33 person holds an interest as any of the following:
  8 34    a.  A member of a farmers cooperative association.
  8 35    b.  A member of a farmers cooperative limited liability
  9  1 company.
  9  2    c.  A shareholder of a networking farmers corporation.
  9  3    d.  A member of a networking farmers limited liability
  9  4 company.
  9  5    e.  A general partner or a limited partner in a networking
  9  6 farmers limited partnership.
  9  7    Sec. 9.  NEW SECTION.  490.1713  LANDHOLDINGS RESTRICTED.
  9  8    1.  Notwithstanding section 9H.4, a networking farmers
  9  9 corporation may hold agricultural land in this state if it
  9 10 meets all of the following conditions:
  9 11    a.  The corporation does not hold an interest in
  9 12 agricultural land of more than one thousand five hundred
  9 13 acres.
  9 14    b.  At least seventy-five percent of the corporation's
  9 15 gross income from farming is from the sale of livestock or
  9 16 livestock products.
  9 17    2.  a.  Notwithstanding section 9H.4, if a person holds an
  9 18 interest in a networking farmers corporation, that interest
  9 19 shall not be treated as an interest in agricultural land.
  9 20    b.  Notwithstanding section 9H.5, if an authorized entity
  9 21 holds an interest in a networking farmers corporation, the
  9 22 number of acres of agricultural land in which the corporation
  9 23 holds an interest shall not be attributable to the authorized
  9 24 entity when calculating the number of acres of agricultural
  9 25 land that the entity may hold under section 9H.5.
  9 26    3.  In the event of a transfer of an interest in the
  9 27 networking farmers corporation by operation of law as a result
  9 28 of death, divorce, or bankruptcy, or pursuant to a security
  9 29 interest, the cooperative may disregard the transfer for
  9 30 purposes of determining compliance with subsection 1 for a
  9 31 period of two years after the transfer.
  9 32    Sec. 10.  NEW SECTION.  490.1714  MULTIPLE INTERESTS
  9 33 RESTRICTED.
  9 34    A person who holds an interest in a networking farmers
  9 35 corporation holding an interest in agricultural land pursuant
 10  1 to section 487.1203 shall not hold an interest in another
 10  2 farmers entity if any of the following applies:
 10  3    1.  The person holds a twenty-five percent or greater
 10  4 interest in a networking farmers corporation having six or
 10  5 fewer stockholders.
 10  6    2.  The person holds a fifteen percent or greater interest
 10  7 in a networking farmers corporation having seven or more
 10  8 stockholders.
 10  9    Sec. 11.  NEW SECTION.  490.1715  REPORTING REQUIREMENTS.
 10 10    1.  A networking farmers corporation that claims it is
 10 11 exempt from the restrictions of section 9H.4 pursuant to
 10 12 section 490.1713 shall file an annual report with the
 10 13 secretary of state on or before March 31 of each year on forms
 10 14 adopted pursuant to chapter 17A and supplied by the secretary
 10 15 of state.
 10 16    2.  The report shall be signed by the president or other
 10 17 officer or authorized representative of the corporation.
 10 18    3.  The report shall contain information for the last year
 10 19 regarding the corporation, including all of the following:
 10 20    a.  The name and address of the corporation.
 10 21    b.  The name and address of the person supervising the
 10 22 daily operations on the agricultural land.
 10 23    c.  The name, address, and citizenship, if other than
 10 24 United States citizenship, of each stockholder.
 10 25    d.  A certification that the corporation meets all of the
 10 26 requirements of a networking farmers corporation.
 10 27    e.  The number of acres of agricultural land held by the
 10 28 corporation, including the following:
 10 29    (1)  The total number of acres in the state.
 10 30    (2)  The number of acres in each county identified by
 10 31 county name.
 10 32    (3)  The number of acres owned.
 10 33    (4)  The number of acres leased.
 10 34    (5)  The number of acres held other than by ownership or
 10 35 lease.
 11  1    (6)  The number of acres used for the production of row
 11  2 crops.
 11  3    (7)  The animal weight capacity of the livestock operation.
 11  4    4.  A networking farmers corporation shall be excused from
 11  5 filing a report with the secretary of state during any year in
 11  6 which the corporation holds an interest in less than twenty
 11  7 acres of agricultural land in this state and the gross revenue
 11  8 produced from all farming on the land equals less than ten
 11  9 thousand dollars.  If a networking farmers corporation is
 11 10 excused from filing a report with the secretary of state as
 11 11 provided in this subsection in the immediately prior reporting
 11 12 year, the secretary of state is not required to deliver a form
 11 13 to the corporation for the current reporting year, unless
 11 14 requested by the corporation.
 11 15    5.  A report required pursuant to this section shall be in
 11 16 lieu of any report which is also required by a networking
 11 17 farmers corporation which qualifies as an authorized
 11 18 corporation pursuant to section 9H.5A.
 11 19    6.  Notwithstanding chapter 22, reports required in this
 11 20 section shall be confidential reports except as to the
 11 21 attorney general for review and appropriate action when
 11 22 necessary.
 11 23    7.  The secretary of state shall assist any committee of
 11 24 the general assembly studying the effects of this division and
 11 25 the practices this division regulates, to the same extent
 11 26 required pursuant to section 9H.14.
 11 27    Sec. 12.  NEW SECTION.  490.1716  PENALTIES.
 11 28    1.  a.  A networking farmers corporation violating section
 11 29 490.1713 shall be assessed a civil penalty of not more than
 11 30 ten thousand dollars and shall divest itself of any land held
 11 31 in violation of that section within one year after judgment is
 11 32 entered ordering the corporation to comply with that section.
 11 33    b.  A civil penalty of not more than one thousand dollars
 11 34 may be imposed on a person who becomes a stockholder of a
 11 35 networking farmers corporation in violation of section
 12  1 490.1714.  The person violating the section shall divest the
 12  2 interest held by the person in a farmers entity or authorized
 12  3 entity as is necessary to comply with that section.
 12  4    2.  The court may determine the method of divesting an
 12  5 interest held by a person found to be in violation of section
 12  6 490.1713 or 490.1714.  A financial gain realized by a person
 12  7 who disposes of an interest held in violation of those
 12  8 sections shall be forfeited to the state's general fund.  All
 12  9 court costs and fees shall be paid by the person holding the
 12 10 interest in violation of the section.
 12 11    3.  The courts of this state may prevent and restrain
 12 12 violations of section 490.1713 or 490.1714 through the
 12 13 issuance of an injunction.  The attorney general or a county
 12 14 attorney shall institute suits on behalf of the state to
 12 15 prevent and restrain violations of section 490.1713 or
 12 16 490.1714.
 12 17    4.  a.  The failure to timely file a report or the filing
 12 18 of false information in a report as provided in section
 12 19 490.1715 is punishable by a civil penalty not to exceed one
 12 20 thousand dollars.
 12 21    b.  The secretary of state shall notify a person who the
 12 22 secretary has reason to believe is required to file a report
 12 23 as provided by this division and who has not filed a timely
 12 24 report, that the person may be in violation of section
 12 25 490.1715.  The secretary of state shall include in the notice
 12 26 a statement of the penalty which may be assessed if the
 12 27 required report is not filed within thirty days.  The
 12 28 secretary of state shall refer to the attorney general any
 12 29 person who the secretary has reason to believe is required to
 12 30 report if, after thirty days from receipt of the notice, the
 12 31 person has not filed the required report.  The attorney
 12 32 general may, upon referral from the secretary of state, file
 12 33 an action in district court to seek the assessment of a civil
 12 34 penalty of one hundred dollars for each day the report is not
 12 35 filed.  
 13  1                         SUBCHAPTER XVII
 13  2               FARMERS LIMITED LIABILITY COMPANIES
 13  3    Sec. 13.  NEW SECTION.  490A.1701  DEFINITIONS.
 13  4    As used in this subchapter, unless the context otherwise
 13  5 requires:
 13  6    1.  "Actively engaged in farming" means the same as defined
 13  7 in section 9H.1.
 13  8    2.  "Agricultural land" means the same as defined in
 13  9 section 9H.1.
 13 10    3.  "Authorized entity" means an authorized farm
 13 11 corporation; authorized limited liability company; limited
 13 12 partnership, other than a family farm limited partnership; or
 13 13 authorized trust, as defined in section 9H.1.
 13 14    4.  "Family farm entity" means a family farm corporation,
 13 15 family farm limited liability company, family farm limited
 13 16 partnership, or family trust, as defined in section 9H.1.
 13 17    5.  "Farm estate" means the real and personal property of a
 13 18 decedent, a ward, or a trust as provided in chapter 633, if at
 13 19 least sixty percent of the gross income from the estate comes
 13 20 from farming.
 13 21    6.  "Farmers cooperative association" means the same as
 13 22 defined in section 499.91.
 13 23    7.  "Farmers cooperative limited liability company" means a
 13 24 limited liability company if all of the following apply:
 13 25    a.  One hundred percent of the voting membership interest
 13 26 is held by associations which operate on a cooperative basis.
 13 27    b.  At least fifty percent of the stock and fifty percent
 13 28 of the voting stock is held by farmers cooperative
 13 29 associations.
 13 30    8.  "Farmers entity" means a networking farmers entity,
 13 31 farmers cooperative limited liability company, or farmers
 13 32 cooperative association.
 13 33    9.  "Farmers limited liability company" means a networking
 13 34 farmers limited liability company or a farmers cooperative
 13 35 limited liability company.
 14  1    10.  "Farming" means the same as defined in section 9H.1.
 14  2    11.  "Livestock" means an animal belonging to the bovine,
 14  3 caprine, equine, ovine, or porcine species, ostriches, rheas,
 14  4 emus, farm deer as defined in section 481A.1, or poultry.
 14  5    12.  "Networking farmers entity" means a networking farmers
 14  6 corporation, networking farmers limited liability company, or
 14  7 networking farmers limited partnership.
 14  8    13.  "Networking farmers limited liability company" means a
 14  9 limited liability company organized under this chapter if all
 14 10 of the following conditions are satisfied:
 14 11    a.  At least seventy percent of the membership interest is
 14 12 held by qualified persons.
 14 13    b.  At least seventy percent of votes that may be cast by
 14 14 members of the limited liability company is held by qualified
 14 15 persons.
 14 16    14.  "Networking farmers limited partnership" means the
 14 17 same as defined in section 487.1201.
 14 18    15.  "Qualified person" means any of the following:
 14 19    a.  A natural person actively engaged in farming.
 14 20    b.  A general partnership as provided in chapter 486 in
 14 21 which all partners are natural persons actively engaged in
 14 22 farming.
 14 23    c.  A family farm entity.
 14 24    d.  A person who owns at least one hundred fifty acres of
 14 25 agricultural land and receives as rent a share of the crops or
 14 26 the animals raised on the land, provided that the person is a
 14 27 natural person or a general partnership as provided in chapter
 14 28 486 in which all persons are natural persons.
 14 29    e.  A farm estate.
 14 30    Sec. 14.  NEW SECTION.  490.1702  INTERESTS DESCRIBED.
 14 31    As used in this subchapter, the following apply:
 14 32    1.  A person holds an interest in agricultural land if the
 14 33 person directly or indirectly owns, leases, or has a legal or
 14 34 equitable interest in agricultural land.
 14 35    2.  A person holds an interest in a farmers entity if the
 15  1 person holds an interest as any of the following:
 15  2    a.  A member of a farmers cooperative association.
 15  3    b.  A member of a farmers cooperative limited liability
 15  4 company.
 15  5    c.  A shareholder of a networking farmers corporation.
 15  6    d.  A member of a networking farmers limited liability
 15  7 company.
 15  8    e.  A general partner or limited partner of a networking
 15  9 farmers limited partnership.
 15 10    Sec. 15.  NEW SECTION.  490A.1703  LANDHOLDINGS RESTRICTED.
 15 11    1.  Notwithstanding section 9H.4, a farmers limited
 15 12 liability company may hold agricultural land in this state if
 15 13 it meets all of the following conditions:
 15 14    a.  The farmers limited liability company does not hold an
 15 15 interest in agricultural land of more than one thousand five
 15 16 hundred acres.
 15 17    b.  At least seventy-five percent of the farmers limited
 15 18 liability company's gross income from farming is from the sale
 15 19 of livestock or livestock products.
 15 20    2.  a.  Notwithstanding section 9H.4, the following shall
 15 21 apply:
 15 22    (1)  If a person holds an interest in a networking farmers
 15 23 limited liability company, that interest shall not be treated
 15 24 as an interest in agricultural land.
 15 25    (2)  Except as provided in section 499.93, if a person
 15 26 holds an interest in a farmers cooperative limited liability
 15 27 company, that interest shall not be treated as an interest in
 15 28 agricultural land.
 15 29    b.  Notwithstanding section 9H.5, if an authorized entity
 15 30 holds an interest in a farmers limited liability company, the
 15 31 number of acres of agricultural land in which the limited
 15 32 liability company holds an interest shall not be attributable
 15 33 to the authorized entity when calculating the number of acres
 15 34 of agricultural land that the authorized entity may hold under
 15 35 section 9H.5.
 16  1    3.  In the event of a transfer of an interest in the
 16  2 farmers limited liability company by operation of law as a
 16  3 result of death, divorce, or bankruptcy, or pursuant to a
 16  4 security interest, the networking farmers limited liability
 16  5 company may disregard the transfer for purposes of determining
 16  6 compliance with subsection 1 for a period of two years after
 16  7 the transfer.
 16  8    Sec. 16.  NEW SECTION.  490A.1704  MULTIPLE INTERESTS
 16  9 RESTRICTED.
 16 10    A person who holds an interest in a networking farmers
 16 11 limited liability company holding an interest in agricultural
 16 12 land pursuant to section 490A.1703 shall not hold an interest
 16 13 in another farmers entity, if any of the following applies:
 16 14    1.  The person holds a twenty-five percent or greater
 16 15 interest in a networking farmers limited liability company
 16 16 having six or fewer limited members.
 16 17    2.  The person holds a fifteen percent or greater interest
 16 18 in a networking farmers limited liability company having seven
 16 19 or more members.
 16 20    Sec. 17.  NEW SECTION.  490A.1705  REPORTING REQUIREMENTS.
 16 21    1.  A farmers limited liability company that claims it is
 16 22 exempt from the restrictions of section 9H.4 pursuant to
 16 23 section 490A.1703 shall file an annual report with the
 16 24 secretary of state on or before March 31 of each year on forms
 16 25 adopted pursuant to chapter 17A and supplied by the secretary
 16 26 of state.
 16 27    2.  The report shall be signed by the manager or authorized
 16 28 representative of the farmers limited liability company.
 16 29    3.  The report shall contain information for the last year
 16 30 regarding the farmers limited liability company, including all
 16 31 of the following:
 16 32    a.  The name and address of the limited liability company.
 16 33    b.  The name and address of the person supervising the
 16 34 daily operations on the agricultural land.
 16 35    c.  The name, address, and citizenship, if other than
 17  1 United States citizenship, of each member.
 17  2    d.  A certification that the farmers limited liability
 17  3 company meets all of the requirements of a networking farmers
 17  4 limited liability company or a farmers cooperative limited
 17  5 liability company.
 17  6    e.  The number of acres of agricultural land held by the
 17  7 farmers limited liability company, including the following:
 17  8    (1)  The total number of acres in the state.
 17  9    (2)  The number of acres in each county identified by
 17 10 county name.
 17 11    (3)  The number of acres owned.
 17 12    (4)  The number of acres leased.
 17 13    (5)  The number of acres held other than by ownership or
 17 14 lease.
 17 15    (6)  The number of acres used for the production of row
 17 16 crops.
 17 17    (7)  The animal weight capacity of the livestock
 17 18 operations.
 17 19    4.  A farmers limited liability company shall be excused
 17 20 from filing a report with the secretary of state during any
 17 21 year in which the farmers limited liability company holds an
 17 22 interest in less than twenty acres of agricultural land in
 17 23 this state and the gross revenue produced from all farming on
 17 24 the land equals less than ten thousand dollars.  If a farmers
 17 25 limited liability company is excused from filing a report with
 17 26 the secretary of state as provided in this subsection in the
 17 27 immediately prior reporting year, the secretary of state is
 17 28 not required to deliver a form to the farmers limited
 17 29 liability company for the current reporting year, unless
 17 30 requested by the farmers limited liability company.
 17 31    5.  A report required pursuant to this section shall be in
 17 32 lieu of any report which is also required by a farmers limited
 17 33 liability company which qualifies as an authorized limited
 17 34 liability company pursuant to section 9H.5A.
 17 35    6.  Notwithstanding chapter 22, reports required in this
 18  1 section shall be confidential reports except as to the
 18  2 attorney general for review and appropriate action when
 18  3 necessary.
 18  4    7.  The secretary of state shall assist any committee of
 18  5 the general assembly studying the effects of this subchapter
 18  6 and the practices this subchapter regulates, to the same
 18  7 extent required pursuant to section 9H.14.
 18  8    Sec. 18.  NEW SECTION.  490A.1706  PENALTIES.
 18  9    1.  a.  A farmers limited liability company violating
 18 10 section 490A.1703 shall be assessed a civil penalty of not
 18 11 more than ten thousand dollars and shall divest itself of any
 18 12 land held in violation of that section within one year after
 18 13 judgment is entered ordering the limited liability company to
 18 14 comply with that section.
 18 15    b.  A civil penalty of not more than one thousand dollars
 18 16 may be imposed on a person who becomes a member of a
 18 17 networking farmers limited liability company in violation of
 18 18 section 490A.1704.  The person violating the section shall
 18 19 divest the interest held by the person in a farmers entity or
 18 20 authorized entity as is necessary to comply with that section.
 18 21    2.  The court may determine the method of divesting an
 18 22 interest held by a person found to be in violation of section
 18 23 490A.1703 or 490A.1704.  A financial gain realized by a person
 18 24 who disposes of an interest held in violation of those
 18 25 sections shall be forfeited to the state's general fund.  All
 18 26 court costs and fees shall be paid by the person holding the
 18 27 interest in violation of the section.
 18 28    3.  The courts of this state may prevent and restrain
 18 29 violations of section 490A.1703 or 490A.1704 through the
 18 30 issuance of an injunction.  The attorney general or a county
 18 31 attorney shall institute suits on behalf of the state to
 18 32 prevent and restrain violations of section 490A.1703 or
 18 33 490A.1704.
 18 34    4.  a.  The failure to timely file a report or the filing
 18 35 of false information in a report as provided in section
 19  1 490A.1705 is punishable by a civil penalty not to exceed one
 19  2 thousand dollars.
 19  3    b.  The secretary of state shall notify a person who the
 19  4 secretary has reason to believe is required to file a report
 19  5 as provided by this subchapter and who has not filed a timely
 19  6 report, that the person may be in violation of section
 19  7 490A.1705.  The secretary of state shall include in the notice
 19  8 a statement of the penalty which may be assessed if the
 19  9 required report is not filed within thirty days.  The
 19 10 secretary of state shall refer to the attorney general any
 19 11 person who the secretary has reason to believe is required to
 19 12 report if, after thirty days from receipt of the notice, the
 19 13 person has not filed the required report.  The attorney
 19 14 general may, upon referral from the secretary of state, file
 19 15 an action in district court to seek the assessment of a civil
 19 16 penalty of one hundred dollars for each day the report is not
 19 17 filed.  
 19 18                          SUBCHAPTER II
 19 19                FARMERS COOPERATIVE ASSOCIATIONS
 19 20    Sec. 19.  NEW SECTION.  499.91  DEFINITIONS.
 19 21    As used in this subchapter, unless the context otherwise
 19 22 requires:
 19 23    1.  "Actively engaged in farming" means the same as defined
 19 24 in section 9H.1.
 19 25    2.  "Agricultural land" means the same as defined in
 19 26 section 9H.1.
 19 27    3.  "Authorized entity" means an authorized farm
 19 28 corporation; authorized limited liability company; limited
 19 29 partnership, other than a family farm limited partnership; or
 19 30 authorized trust, as defined in section 9H.1.
 19 31    4.  "Family farm entity" means a family farm corporation,
 19 32 family farm limited liability company, family farm limited
 19 33 partnership, or family trust, as defined in section 9H.1.
 19 34    5.  "Farm estate" means the real and personal property of a
 19 35 decedent, a ward, or a trust as provided in chapter 633, if at
 20  1 least sixty percent of the gross income from the estate comes
 20  2 from farming.
 20  3    6.  "Farmers cooperative association" means an association
 20  4 organized under this chapter, if seventy percent of the
 20  5 association's voting stock is held by qualified persons.
 20  6    7.  "Farmers cooperative limited liability company" means
 20  7 the same as defined in section 490A.1701.
 20  8    8.  "Farmers entity" means a networking farmers entity,
 20  9 farmers cooperative limited liability company, or farmers
 20 10 cooperative association.
 20 11    9.  "Farming" means the same as defined in section 9H.1.
 20 12    10.  "Livestock" means an animal belonging to the bovine,
 20 13 caprine, equine, ovine, or porcine species, ostriches, rheas,
 20 14 emus, farm deer as defined in section 481A.1, or poultry.
 20 15    11.  "Networking farmers entity" means a networking farmers
 20 16 corporation, networking farmers limited liability company, or
 20 17 networking farmers limited partnership.
 20 18    12.  "Networking farmers limited liability company" means
 20 19 the same as defined in section 490A.1701.
 20 20    13.  "Networking farmers limited partnership" means the
 20 21 same as defined in section 487.1201.
 20 22    14.  "Qualified person" means any of the following:
 20 23    a.  A natural person actively engaged in farming.
 20 24    b.  A general partnership as provided in chapter 486 in
 20 25 which all partners are natural persons actively engaged in
 20 26 farming.
 20 27    c.  A family farm entity.
 20 28    d.  A person who owns at least one hundred fifty acres of
 20 29 agricultural land and receives as rent a share of the crops or
 20 30 the animals raised on the land, provided that the person is a
 20 31 natural person or a general partnership as provided in chapter
 20 32 486 in which all persons are natural persons.
 20 33    e.  A farm estate.
 20 34    Sec. 20.  NEW SECTION.  499.92  INTERESTS DESCRIBED.
 20 35    As used in this subchapter, the following apply:
 21  1    1.  A person holds an interest in agricultural land if the
 21  2 person directly or indirectly owns, leases, or has a legal or
 21  3 equitable interest in agricultural land.
 21  4    2.  A person holds an interest in a farmers entity if the
 21  5 person holds an interest as any of the following:
 21  6    a.  A member of a farmers cooperative association.
 21  7    b.  A member of a farmers cooperative limited liability
 21  8 company.
 21  9    c.  A shareholder of a networking farmers corporation.
 21 10    d.  A member of a networking farmers limited liability
 21 11 company.
 21 12    e.  A general partner or a limited partner in a networking
 21 13 farmers limited partnership.
 21 14    Sec. 21.  NEW SECTION.  499.93  LANDHOLDINGS RESTRICTED.
 21 15    1.  Notwithstanding section 9H.4, a farmers cooperative
 21 16 association may hold agricultural land in this state if it
 21 17 meets all of the following conditions:
 21 18    a.  The farmers cooperative association does not hold an
 21 19 interest in agricultural land of more than one thousand five
 21 20 hundred acres.
 21 21    b.  At least seventy-five percent of the farmers
 21 22 cooperative association's gross income from farming is from
 21 23 the sale of livestock or livestock products.
 21 24    2.  a.  Notwithstanding section 9H.4, if a person holds an
 21 25 interest in a farmers cooperative association, that interest
 21 26 shall not be treated as an interest in agricultural land.
 21 27    b.  Notwithstanding section 9H.5, if an authorized entity
 21 28 holds an interest in a farmers cooperative association, the
 21 29 number of acres of agricultural land in which the association
 21 30 holds an interest shall not be attributable to the authorized
 21 31 entity when calculating the number of acres of agricultural
 21 32 land that the entity may hold under section 9H.5.
 21 33    3.  a.  If a farmers cooperative association is a member of
 21 34 a networking farmers cooperative limited liability company as
 21 35 provided in section 490A.1701, the association shall be deemed
 22  1 to hold an interest in agricultural land held by the limited
 22  2 liability company in proportion to the interest that the
 22  3 association holds in the limited liability company.  The
 22  4 association's proportionate interest shall be calculated by
 22  5 multiplying the number of acres of agricultural land held by
 22  6 the networking farmers cooperative limited liability company
 22  7 by the percentage interest in the limited liability company
 22  8 held by the association as a member.
 22  9    b.  If a farmers cooperative association holds an interest
 22 10 in a networking farmers entity, that interest shall not be
 22 11 treated as an interest in agricultural land.
 22 12    4.  In the event of a transfer of an interest in a farmers
 22 13 cooperative association by operation of law as a result of
 22 14 death, divorce, or bankruptcy, or pursuant to a security
 22 15 interest, the association may disregard the transfer for
 22 16 purposes of determining compliance with subsection 1 for a
 22 17 period of two years after the transfer.
 22 18    Sec. 22.  NEW SECTION.  499.94  MULTIPLE INTERESTS
 22 19 RESTRICTED.
 22 20    A person who holds an interest in a farmers cooperative
 22 21 association holding an interest in agricultural land pursuant
 22 22 to section 499.93 shall not hold an interest in another
 22 23 farmers entity if any of the following applies:
 22 24    1.  The person holds a twenty-five percent or greater
 22 25 interest in a farmers cooperative association having six or
 22 26 fewer members.
 22 27    2.  The person holds a fifteen percent or greater interest
 22 28 in a farmers cooperative association having seven or more
 22 29 stockholders.
 22 30    Sec. 23.  NEW SECTION.  499.95  REPORTING REQUIREMENTS.
 22 31    1.  A farmers cooperative association that claims that it
 22 32 is exempt from the restrictions of section 9H.4 pursuant to
 22 33 section 499.93 shall file an annual report with the secretary
 22 34 of state on or before March 31 of each year on forms adopted
 22 35 pursuant to chapter 17A and supplied by the secretary of
 23  1 state.
 23  2    2.  The report shall be signed by the president or an
 23  3 authorized representative of the farmers cooperative
 23  4 association.
 23  5    3.  The report shall contain information for the last year
 23  6 regarding the farmers cooperative association, including all
 23  7 of the following:
 23  8    a.  The name and address of the farmers cooperative
 23  9 association.
 23 10    b.  The name and address of the person supervising the
 23 11 daily operations on the agricultural land.
 23 12    c.  The name, address, and citizenship, if other than
 23 13 United States citizenship, of each member.
 23 14    d.  A certification that the farmers cooperative
 23 15 association meets all of the requirements of a farmers
 23 16 cooperative association.
 23 17    e.  The number of acres of agricultural land held by the
 23 18 farmers cooperative association, including the following:
 23 19    (1)  The total number of acres in the state.
 23 20    (2)  The number of acres in each county identified by
 23 21 county name.
 23 22    (3)  The number of acres owned.
 23 23    (4)  The number of acres leased.
 23 24    (5)  The number of acres held other than by ownership or
 23 25 lease.
 23 26    (6)  The number of acres used for the production of row
 23 27 crops.
 23 28    (7)  The animal weight capacity of the livestock operation.
 23 29    4.  A farmers cooperative association shall be excused from
 23 30 filing a report with the secretary of state during any year in
 23 31 which the farmers cooperative association holds an interest in
 23 32 less than twenty acres of agricultural land in this state and
 23 33 the gross revenue produced from all farming on the land equals
 23 34 less than ten thousand dollars.  If the farmers cooperative
 23 35 association is excused from filing a report with the secretary
 24  1 of state as provided in this subsection in the immediately
 24  2 prior reporting year, the secretary of state is not required
 24  3 to deliver a form to the farmers cooperative association for
 24  4 the current reporting year, unless requested by the
 24  5 association.
 24  6    5.  A report required pursuant to this section shall be in
 24  7 lieu of any report which is also required by a farmers
 24  8 cooperative association which qualifies as an authorized
 24  9 corporation pursuant to section 9H.5A.
 24 10    6.  Notwithstanding chapter 22, reports required in this
 24 11 section shall be confidential reports except as to the
 24 12 attorney general for review and appropriate action when
 24 13 necessary.
 24 14    7.  The secretary of state shall assist any committee of
 24 15 the general assembly studying the effects of this subchapter
 24 16 and the practices this subchapter regulates, to the same
 24 17 extent required pursuant to section 9H.14.
 24 18    Sec. 24.  NEW SECTION.  499.96  PENALTIES.
 24 19    1.  a.  A farmers cooperative association violating section
 24 20 499.93 shall be assessed a civil penalty of not more than ten
 24 21 thousand dollars and shall divest itself of any land held in
 24 22 violation of that section within one year after judgment is
 24 23 entered ordering the association to comply with that section.
 24 24    b.  A civil penalty of not more than one thousand dollars
 24 25 may be imposed on a person who becomes a member of a farmers
 24 26 cooperative association in violation of section 499.94.  The
 24 27 person violating the section shall divest the interest held by
 24 28 the person in a farmers entity or authorized entity as is
 24 29 necessary to comply with that section.
 24 30    2.  The court may determine the method of divesting an
 24 31 interest held by a person found to be in violation of section
 24 32 499.93 or 499.94.  A financial gain realized by a person who
 24 33 disposes of an interest held in violation of those sections
 24 34 shall be forfeited to the state's general fund.  All court
 24 35 costs and fees shall be paid by the person holding the
 25  1 interest in violation of the section.
 25  2    3.  The courts of this state may prevent and restrain
 25  3 violations of section 499.93 or 499.94 through the issuance of
 25  4 an injunction.  The attorney general or a county attorney
 25  5 shall institute suits on behalf of the state to prevent and
 25  6 restrain violations of section 499.93 or 499.94.
 25  7    4.  a.  The failure to timely file a report or the filing
 25  8 of false information in a report filed pursuant to section
 25  9 499.95 is punishable by a civil penalty not to exceed one
 25 10 thousand dollars.
 25 11    b.  The secretary of state shall notify a person who the
 25 12 secretary has reason to believe is required to file a report
 25 13 as provided by section 499.95 and who has not filed a timely
 25 14 report, that the person may be in violation of section 499.95.
 25 15 The secretary of state shall include in the notice a statement
 25 16 of the penalty which may be assessed if the required report is
 25 17 not filed within thirty days.  The secretary of state shall
 25 18 refer to the attorney general any person who the secretary has
 25 19 reason to believe is required to report under this chapter if,
 25 20 after thirty days from receipt of the notice, the person has
 25 21 not filed the required report.  The attorney general may, upon
 25 22 referral from the secretary of state, file an action in
 25 23 district court to seek the assessment of a civil penalty of
 25 24 one hundred dollars for each day the report is not filed.  
 25 25                           EXPLANATION
 25 26    This bill allows several types of entities to hold
 25 27 agricultural land in this state.  Generally, Code section 9H.5
 25 28 prohibits entities, such as corporations, limited liability
 25 29 companies, limited partnerships, and cooperative associations,
 25 30 from holding agricultural land.  Chapter 9H provides several
 25 31 exceptions to this prohibition.  Specifically, the chapter
 25 32 provides that two types of entities can hold agricultural
 25 33 land:  family farm entities and authorized entities.
 25 34    There is no restriction on the amount of agricultural land
 25 35 that a family farm entity may hold or the number of entities
 26  1 that a person can join as a stockholder.  A family farm entity
 26  2 can be organized as a family farm corporation, family farm
 26  3 limited liability company, family farm limited partnership, or
 26  4 family trust.  A family farm entity must meet certain
 26  5 qualifications.  For example, a family farm corporation must
 26  6 be founded for the purpose of farming and the ownership of
 26  7 agricultural land, a majority of the voting stock must be held
 26  8 by relatives and a majority of the voting stockholders must be
 26  9 relatives, all of the stockholders must be natural persons,
 26 10 and 60 percent of the corporation's gross revenues over the
 26 11 last consecutive three-year period must come from farming.
 26 12 Similar requirements apply to other types of family farm
 26 13 entities.
 26 14    An authorized entity can be organized as an authorized farm
 26 15 corporation, authorized limited liability company, authorized
 26 16 trust, or limited partnership.  An authorized entity such as
 26 17 an authorized corporation must also meet certain
 26 18 qualifications.  An authorized corporation must be founded for
 26 19 the purpose of farming and the ownership of agricultural land,
 26 20 it must be composed of 25 or fewer stockholders, and the
 26 21 stockholders must be natural persons.  These same types of
 26 22 qualifications apply to other authorized entities, other than
 26 23 limited partnerships.  However, an authorized entity,
 26 24 including a limited partnership, is prohibiting from holding
 26 25 more than 1,500 acres of agricultural land.  A person cannot
 26 26 hold an interest in two or more authorized entities.
 26 27    This bill amends several chapters providing for the
 26 28 organization of corporations, limited liability companies,
 26 29 limited partnerships, and cooperative associations by
 26 30 providing that these entities can hold agricultural land if
 26 31 they meet certain qualifications.  An entity which meets these
 26 32 qualifications is referred to as a farmers entity.  A farmers
 26 33 entity can be a networking farmers entity (meaning it can be
 26 34 organized as a networking farmers corporation, networking
 26 35 farmers limited liability company, or networking limited
 27  1 partnership), a farmers cooperative limited liability company,
 27  2 or a farmers cooperative association.
 27  3    The qualifications for each of these entities are similar.
 27  4 For example, to qualify as a networking farmers corporation,
 27  5 70 percent of all stock must be held by qualified persons who
 27  6 are natural persons actively engaged in farming, a general
 27  7 partnership, a family farm corporation or similar entity,
 27  8 natural person or general partnership that receives rent on a
 27  9 share basis, or a farm estate.  In addition, at least 70
 27 10 percent of the corporation's voting stock must be held by
 27 11 qualified persons.  The same qualifications apply to
 27 12 networking farmers limited liability companies and networking
 27 13 farmers limited partnerships.  In the case of farmers
 27 14 cooperative associations, there is a requirement that 70
 27 15 percent of the cooperative's voting stock must be held by
 27 16 qualified persons.  However, there is no requirement that a
 27 17 percentage of all stock must be held by qualified persons.
 27 18 The bill provides also for a special kind of limited liability
 27 19 company composed of cooperative associations, referred to as a
 27 20 farmers cooperative limited liability company.  In that case,
 27 21 all of the membership interest must be held by cooperative
 27 22 associations and 50 percent of the voting interest must be
 27 23 held by farmers cooperative associations.
 27 24    The bill provides that a farmers entity such a qualifying
 27 25 corporation (i.e., a networking farmers corporation) may hold
 27 26 up to 1,500 acres of agricultural land as long as 75 percent
 27 27 of the entity's gross income from farming comes from the sale
 27 28 of livestock or livestock products.
 27 29    The bill provides that if a person holds an interest in a
 27 30 farmers entity such as a networking farmers corporation, the
 27 31 person's own interest in agricultural land is treated
 27 32 separately.  For example, an authorized corporation holding
 27 33 1,500 acres of land can own shares in a networking farmers
 27 34 corporation which also holds 1,500 acres of land.  There is
 27 35 one exception.  In counting land held by a farmers cooperative
 28  1 association which is a member of a farmers cooperative limited
 28  2 liability company, the bill requires that some land held by
 28  3 the limited liability company is attributable to the
 28  4 association.  The amount attributable equals the amount
 28  5 calculated by multiplying the number of acres of land held by
 28  6 the company by the percentage interest in the company held by
 28  7 the association.  The bill contains an antipyramiding
 28  8 provision which limits the number of farmers entities to which
 28  9 a person can belong.  The prohibition is triggered by owning a
 28 10 15 or 25 percent interest in the entity, depending on the size
 28 11 of the entity.  A person who holds a 25 percent or greater
 28 12 interest in a networking farmers corporation with six or fewer
 28 13 shareholders cannot hold an interest in another farmers
 28 14 entity.  If the corporation has more than six shareholders,
 28 15 the person cannot hold an interest in another farmers entity,
 28 16 if the person's interest in the corporation is 15 percent or
 28 17 more.  There is one exception.  A cooperative association can
 28 18 hold an interest in multiple farmers cooperative limited
 28 19 liability companies.  However, as discussed, land owned by the
 28 20 limited liability company is to some extent attributable to a
 28 21 farmers cooperative limited liability company.
 28 22    The bill provides a number of reporting requirements for
 28 23 farmers entities.  The entity must file an annual report with
 28 24 the secretary of state on or before March 31 of each year.
 28 25 The report is similar to reports required to be filed by
 28 26 authorized entities, like authorized corporations under
 28 27 chapter 9H.  The report must contain information for the last
 28 28 year regarding the corporation, including information about
 28 29 the activities of the entity, the entity's land holdings, and
 28 30 agricultural commodities produced on the land.  The bill
 28 31 excuses an entity from filing a report during any year in
 28 32 which the entity holds an interest in less than 20 acres of
 28 33 agricultural land or the entity files a duplicate report as an
 28 34 authorized entity.  The reports are confidential.
 28 35    A farmers entity such as a networking farmers corporation
 29  1 and a person holding an interest in a farmers entity such as a
 29  2 shareholder are subject to penalties for violating the bill's
 29  3 provisions.  The entity can be assessed a civil penalty of not
 29  4 more than $10,000 and must divest itself of any land held in
 29  5 violation of the bill's acreage restrictions.  A civil penalty
 29  6 of not more than $1,000 may be imposed on a person who holds
 29  7 interest in several entities in violation of the bill's
 29  8 antipyramiding rule.  The person in violation must divest the
 29  9 interest held by the person in a farmers entity or authorized
 29 10 entity as is necessary to comply with the section.  A
 29 11 financial gain realized by a person who disposes of an
 29 12 interest held in violation of the bill is forfeited to the
 29 13 state's general fund.  The bill authorizes courts to issue
 29 14 injunctions.  The attorney general or a county attorney is
 29 15 authorized to institute suits on behalf of the state to
 29 16 prevent and restrain violations of the bill.  The failure to
 29 17 timely file a report or the filing of false information in a
 29 18 report is punishable by a civil penalty not to exceed $1,000,
 29 19 following notice to correct a deficiency by the secretary of
 29 20 state.  
 29 21 LSB 3072HC 77
 29 22 da/sc/14.2
     

Text: HSB00500                          Text: HSB00502
Text: HSB00500 - HSB00599               Text: HSB Index
Bills and Amendments: General Index     Bill History: General Index

Return To Home Iowa General Assembly

index Search: House Bills and Amendments (77th General Assembly)

© 1998 Cornell College and League of Women Voters of Iowa


Comments about this site or page? webmaster@legis.iowa.gov. Please remember that the person listed above does not vote on bills. Direct all comments concerning legislation to State Legislators.

Last update: Tue Jan 13 03:42:45 CST 1998
URL: /DOCS/GA/77GA/Legislation/HSB/00500/HSB00501/980112.html
jhf