Senate File 410 - Introduced



                                       SENATE FILE       
                                       BY  ZIEMAN


    Passed Senate, Date               Passed House,  Date             
    Vote:  Ayes        Nays           Vote:  Ayes        Nays         
                 Approved                            

                                      A BILL FOR

  1 An Act providing for the acquisition of multiple interests in
  2    business associations allowed to hold agricultural land, and
  3    making penalties applicable.
  4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  5 TLSB 2701XS 82
  6 da/es/88

PAG LIN



  1  1    Section 1.  Section 10.4, subsection 1, paragraph b, Code
  1  2 2007, is amended to read as follows:
  1  3    b.  The person holds a fifteen twenty percent or greater
  1  4 interest in a networking farmers corporation having seven or
  1  5 more stockholders.
  1  6    Sec. 2.  Section 10.6, subsection 1, paragraph b, Code
  1  7 2007, is amended to read as follows:
  1  8    b.  The person holds a fifteen twenty percent or greater
  1  9 interest in a networking farmers limited liability company
  1 10 having seven or more members.
  1 11    Sec. 3.  Section 10.8, subsection 1, paragraph b, Code
  1 12 2007, is amended to read as follows:
  1 13    b.  The person holds a fifteen twenty percent or greater
  1 14 interest in a farmers cooperative association having seven or
  1 15 more members.
  1 16                           EXPLANATION
  1 17    GENERAL.  This bill applies to a person who is an investor
  1 18 in a business association (a stockholder of a corporation or a
  1 19 member of a limited liability company or cooperative) which is
  1 20 allowed to hold agricultural land under Code chapter 10
  1 21 (notwithstanding a general prohibition against such ownership
  1 22 provided in Code chapter 9H).  Under provisions in Code
  1 23 chapter 10, the person cannot invest in a second such business
  1 24 association if the person owns a certain percentage of equity
  1 25 interest (shares or membership interests) in the first
  1 26 business association.  The percentage is based on the number
  1 27 of other investors who belong to the first business
  1 28 association.  For a business association having six or fewer
  1 29 investors, a person who wants to invest in the second business
  1 30 association must not own 25 percent of the equity interest in
  1 31 the first business association.  Otherwise, the person must
  1 32 not own 15 percent of equity interest in any such business
  1 33 association having seven or more investors.
  1 34    The bill provides that the person who belongs to a business
  1 35 association having seven or more investors and who owns less
  2  1 than 20 percent of the equity interest in the first business
  2  2 association may invest in the second business association.
  2  3    Code section 10.12 provides that a person who holds
  2  4 multiple interests in a business association in violation of
  2  5 the statutory prohibitions is subject to a civil penalty of
  2  6 not more than $1,000, and the person must divest the interest
  2  7 so held.
  2  8 LSB 2701XS 82
  2  9 da:rj/es/88