Senate Study Bill 1105
SENATE FILE
BY (PROPOSED COMMITTEE ON
AGRICULTURE BILL BY
CO=CHAIRPERSON JOHNSON)
Passed Senate, Date Passed House, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act providing for life science enterprises authorized to hold
2 agricultural land, making penalties applicable, and providing
3 an effective date.
4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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PAG LIN
1 1 Section 1. Section 10B.4, subsection 2, paragraph g, Code
1 2 2005, is amended to read as follows:
1 3 g. If the reporting entity is a life science enterprise,
1 4 as provided in chapter 10C, as that chapter exists on or
1 5 before June 30, 2004 2005, the total amount of commercial sale
1 6 of life science products and products other than life science
1 7 products which are produced from the agricultural land held by
1 8 the life science enterprise.
1 9 Sec. 2. Section 10C.6, subsection 1, paragraph a, Code
1 10 2005, is amended to read as follows:
1 11 a. A life science enterprise may acquire or hold
1 12 agricultural land, notwithstanding section 10C.5 as that
1 13 section exists in the 2005 Code, if all of the following
1 14 apply:
1 15 (1) The life science enterprise acquires the agricultural
1 16 land on or before June 30, 2008.
1 17 (2) The enterprise acquires or holds the agricultural land
1 18 pursuant to chapter 10C as that chapter exists in the 2005
1 19 Code.
1 20 (3) The economic development board has approved a life
1 21 science enterprise plan filed on or before June 30, 2004 2005,
1 22 with the board. The enterprise must acquire or hold the
1 23 agricultural land pursuant to the plan which may be amended at
1 24 any time and approved by the board pursuant to section 15.104.
1 25 Sec. 3. Section 10C.6, subsection 2, unnumbered paragraph
1 26 1, Code 2005, is amended to read as follows:
1 27 A person who is a successor in interest to a life science
1 28 enterprise may acquire or hold agricultural land,
1 29 notwithstanding section 10C.5 as that section exists in the
1 30 2003 Code or 2003 Code Supplement, if all of the following
1 31 apply:
1 32 Sec. 4. Section 10C.6, subsection 2, paragraph a, Code
1 33 2005, is amended to read as follows:
1 34 a. The person meets the qualifications of a life science
1 35 enterprise and acquires or holds the agricultural land as
2 1 provided in chapter 10C as that chapter exists in the 2003
2 2 Code or 2003 Code Supplement.
2 3 Sec. 5. Section 15.104, subsection 4, unnumbered paragraph
2 4 1, Code 2005, is amended to read as follows:
2 5 Review and approve or disapprove a life science enterprise
2 6 plan or amendments to that plan as provided in chapter 10C as
2 7 that chapter exists on or before June 30, 2004 2005, and
2 8 according to rules adopted by the board. A life science plan
2 9 shall make a reasonable effort to provide for participation by
2 10 persons who are individuals or family farm entities actively
2 11 engaged in farming as defined in section 10.1. The persons
2 12 may participate in the life science enterprise by holding an
2 13 equity position in the life science enterprise or providing
2 14 goods or service to the enterprise under contract. The plan
2 15 must be filed with the board not later than June 30, 2004
2 16 2005. The life science enterprise may file an amendment to a
2 17 plan at any time. A life science enterprise is not eligible
2 18 to file a plan, unless the life science enterprise files a
2 19 notice with the board. The notice shall be a simple statement
2 20 indicating that the life science enterprise may file a plan as
2 21 provided in this section. The notice must be filed with the
2 22 board not later than June 30, 2001 1, 2005. The notice, plan,
2 23 or amendments shall be submitted by a life science enterprise
2 24 as provided by the board. The board shall consult with the
2 25 department of agriculture and land stewardship during its
2 26 review of a life science plan or amendments to that plan. The
2 27 plan shall include information regarding the life science
2 28 enterprise as required by rules adopted by the board,
2 29 including but not limited to all of the following:
2 30 Sec. 6. CODE EDITOR DIRECTIVE. The Code editor shall,
2 31 upon the repeal of sections 10C.1 through 10C.4, pursuant to
2 32 section 10C.5, insert in section 10C.6 references to the Code
2 33 or Code Supplement in which the most recent amendments to Code
2 34 chapter 10C or portions thereof, as applicable, were
2 35 incorporated.
3 1 Sec. 7. EFFECTIVE DATE. This Act, being deemed of
3 2 immediate importance, takes effect upon enactment.
3 3 EXPLANATION
3 4 Code chapter 9H generally prohibits corporate entities from
3 5 holding an interest in agricultural land used in farming.
3 6 Code chapter 9I also prohibits nonalien residents and foreign
3 7 governments from holding such an interest. Code chapter 10B
3 8 provides for reporting of agricultural land holdings by
3 9 corporate entities.
3 10 Code chapter 10C provides that notwithstanding any other
3 11 provision of law, a life science enterprise may hold an
3 12 interest in agricultural land for purposes of farming.
3 13 Generally, an enterprise must provide for the development of
3 14 industries unrelated to traditional farming, and be devoted to
3 15 the production of items referred to as life science products
3 16 which are derived from animals (limited to embryos or oocytes
3 17 for use in implantation; blood, milk, or urine for use in the
3 18 manufacture of pharmaceuticals or nutriceuticals; or cells,
3 19 tissue, or organs for use in transplantation).
3 20 In order to qualify as an enterprise, it must meet certain
3 21 conditions. First, it must be organized as a corporation or
3 22 limited liability company. Second, the economic development
3 23 board must approve a plan for the acquisition of the land. An
3 24 enterprise is not eligible to file a plan unless the
3 25 enterprise had filed a notice with the board by June 30, 2001.
3 26 Third, the enterprise cannot hold a total of more than 320
3 27 acres of agricultural land. Fourth, the enterprise must only
3 28 hold the land for purposes of producing life science products
3 29 according to the plan. Fifth, the enterprise cannot receive
3 30 any form of financing from an Iowa agricultural industry
3 31 finance corporation as provided in Code chapter 15E. Sixth,
3 32 the commercial sales of products produced from the
3 33 agricultural land must be limited to the sale of life science
3 34 products, cull livestock, surplus commodities produced as feed
3 35 for the livestock, and life science by=products. The
4 1 provisions authorizing an enterprise to acquire agricultural
4 2 land are repealed on July 1, 2008.
4 3 The bill extends the period during which a corporation or
4 4 limited liability company can qualify to hold agricultural
4 5 land as an enterprise by providing that it has until June 1,
4 6 2005, to file the notice with the economic development board
4 7 and June 30, 2005, to file a plan with the board.
4 8 Code section 9H.4 provides that an entity violating its
4 9 provisions is subject to a civil penalty of not more than
4 10 $25,000 and must divest itself of any land held in violation
4 11 of the Code chapter. The Code chapter provides that a court
4 12 may grant an injunction in order to restrain violations of the
4 13 chapter's provisions. Code section 9I.11 provides that if an
4 14 entity violates its land acquisition provisions, the land
4 15 escheats to the state. An entity that fails to report as
4 16 required under Code chapter 10B is subject to a civil penalty
4 17 of $1,000.
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