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HF 5144

Nonprofit corporation exemption under the corporate farm law modified.

2025-2026 Regular Session Introduced by John Burkel

Nonprofit corporations may lease or own farmland only within new limits (1,500 acres cap, specific ownership rules) and must align with farming/educational uses by Aug 1, 2026.

Introduction and first reading, referred to Agriculture Finance and Policy
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Bill Summary · HF 5144

Summary of HF5144 (2025-2026) — Nonprofit corporation exemption under the corporate farm law modified

Purpose and intent

  • The bill amends Minnesota Statutes 2024, section 500.24, subdivision 2, to modify how nonprofit corporations are treated under the corporate farm law.
  • It sets new definitions and criteria for various farming-related entities (authorized farm corporations, partnerships, LLCs, etc.) and, importantly, adds an effective date for certain provisions.
  • The overarching aim is to refine which entities can own or lease agricultural land and under what conditions, with a focus on nonprofit corporations’ role and exemptions.

Key provisions and changes

  • Definitions (subdivision 2) are expanded and detailed to cover a wide range of entity types involved in farming, including:
    • Authorized farm corporations and authorized farm partnerships
    • Authorized livestock farm corporations and authorized farm limited liability companies
    • Family farm trusts, family farm partnerships, and family farm LLCs
    • Related concepts such as “exempt land,” “gifted land,” “repossessed land,” and “current beneficiary”
    • “Nonprofit corporation” is defined in a way that ties land use and leasing to nonfarming or educational purposes
  • Ownership and control thresholds:
    • Several standards specify caps on land ownership (typically 1,500 acres) and on the composition of ownership and control (e.g., majority of stockholders or members must be natural persons or family farm trusts; limits on classes of shares; limits on revenue sources beyond farming activities).
    • Restrictions apply to affiliations between entities (e.g., no overlapping ownership with other authorized farm entities exceeding acreage caps).
  • Land use and leasing:
    • Nonprofit corporations are permitted to lease agricultural land to family farm units, family farm corporations, authorized farm entities, and certain family farm trusts or partnerships.
    • Provisions address how nonprofit entities may use revenue and profits, with emphasis on farming-related activity or educational use in certain cases.
  • Special categories and clarifications:
    • Several definitions clarify what constitutes “active farming,” “actively engaged in livestock production,” and who qualifies as a “farmer.”
    • Various land classifications (exempt land, gifted land, repossessed land) are defined to govern transitions and allowable uses, including specific timelines for disposition.
  • Effective date:
    • The act (Section 1) includes a new effective date: August 1, 2026.

Who/what is affected

  • Agricultural landowners and entities that own, lease, or operate farmland, including:
    • Nonprofit corporations
    • Family farm trusts, partnerships, and various forms of family farm corporations/LLCs
    • Authorized farm corporations, authorized livestock farm corporations, and authorized farm partnerships/LLCs
    • Pension or investment funds and other financial entities that interact with agricultural land (within the context of the defined exemptions and land-use restrictions)
  • The changes primarily affect state-regulated ownership structures, eligibility criteria for land ownership, leasing arrangements, and the permissible scope of non-profit involvement in farming operations.

Procedural and timeline aspects

  • First reading and referral occurred on May 14, 2026, with the bill referred to Agriculture, Finance, and Policy committees.
  • A new effective date for key provisions is established: August 1, 2026.
  • The bill’s structure uses a definitions-heavy approach to reframe eligibility and exemptions under the corporate farm law, with concrete acreage caps and ownership restrictions designed to limit concentration of land in certain non-individual entities.

Practical implications and considerations

  • If enacted, nonprofit corporations that lease or own farmland would be subject to stricter criteria and clear timelines, particularly around land ownership limits and the composition of eligible shareholders/members.
  • The August 1, 2026, effective date provides a transition period for entities to assess compliance and adjust structures, leases, or holdings accordingly.
  • Stakeholders (farmers, nonprofit educational/religious groups, family farm trusts, and investment funds) should review how their current ownership or leasing arrangements align with the new thresholds and definitions to avoid unintended noncompliance.

Note: This summary focuses on substantive content and potential impact based on the bill text provided. For legislative drafting details, exact statutory language, and potential interplay with other statutes, please consult the official bill as introduced and any fiscal notes or committee analyses.

Compiled from official sources — confirm details with the bill’s official record.

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