Section 10-06.1-12.2 - Authorized livestock farm corporation or authorized livestock farm limited liability company allowed to engage in the business of farming or ranching - RequirementsThis chapter does not prohibit an authorized livestock farm corporation or an authorized livestock farm limited liability company from owning or leasing farmland or ranchland and engaging in the business of farming or ranching if the authorized livestock farm corporation meets all the requirements o f chapter 10-19.1 or the authorized livestock farm limited liability company meets all the requirements o f chapter 10-32.1 which are not inconsistent with this chapter. The following requirements also apply :
1.a. If an authorized livestock farm corporation, the corporation may not have more than ten shareholders.b. If an authorized livestock farm limited liability company, the limited liability company may not have more than ten members.2.a. If an authorized livestock farm corporation, shareholders holding seventy-five percent or more of the shares entitled to vote and the shares entitled to distributions must be individuals who are actively engaged in the business of farming or ranching, farming or ranching corporations, or farming or ranching limited liability companies.b. If an authorized livestock farm limited liability company, members holding fifty-one percent or more of interests entitled to vote and interests entitled to distributions in the limited liability company must be individuals who are actively engaged in the business of farming or ranching, farming or ranching corporations, or farming or ranching limited liability companies.3.a. If an authorized livestock farm corporation: (1) All shareholders who are individuals must be citizens of the United States, permanent resident aliens of the United States, or an authorized individual under section 47-10.1-02.(2) All shareholders that are persons otherwise eligible under this chapter, and any controlling individual or entity of the person, must be organized in the United States and one hundred percent of the stock must be owned by citizens of the United States, permanent resident aliens of the United States, or an authorized individual under section 47-10.1-02.b. If an authorized livestock farm limited liability company:(1) All members who are individuals must be citizens of the United States, permanent resident aliens of the United States, or an authorized individual under section 47-10.1-02.(2) All members that are persons otherwise eligible under this chapter, and any controlling individual or entity of the person, must be organized in the United States and one hundred percent of the interests must be owned by citizens of the United States, permanent resident aliens of the United States, or an authorized individual under section 47-10.1-02.4. The authorized livestock farm corporation or authorized livestock farm limited liability company may not own, lease, or otherwise have an interest in more than one hundred sixty acres [64.75 hectares] of farmland or ranchland.5.a. If an authorized livestock farm corporation, none of its shareholders may hold direct or indirect interests in other authorized livestock farm corporations or in authorized livestock farm limited liability companies that in combination with the corporation own, lease, or otherwise have an interest in more than six hundred forty acres [259 hectares] of farmland or ranchland.b. If an authorized livestock farm limited liability company, none of its members may hold direct or indirect interests in other authorized livestock farm limited liability companies or in other authorized livestock farm corporations that in combination with the limited liability company own, lease, or otherwise have an interest in more than six hundred forty acres [259 hectares] of farmland or ranchland.c. This section does not restrict the number of acres [hectares] of farmland or ranchland directly owned or leased by shareholders or members who are individuals, farming or ranching corporations, farming or ranching limited liability companies, or partnerships that meet the requirements of subsection 2 of section 10-06.1-02.6.a. If an authorized livestock farm corporation, the officers and directors of the corporation must be shareholders who are individuals and who are actively engaged in operating the corporation.b. If an authorized livestock farm limited liability company, the governors, managers, and members authorized under a statement of authority, must be members who are individuals and who are actively engaged in operating the limited liability company.7. An annual average of at least sixty-five percent of the gross income of the authorized livestock farm corporation or authorized livestock farm limited liability company over the previous five years, or for each year of its existence, if less than five years, must have been derived from livestock backgrounding, livestock finishing, or the production of poultry or poultry products, milk or dairy products, or swine or swine products.8. The income of the authorized livestock farm corporation or authorized livestock farm limited liability company from nonfarm rent, nonfarm royalties, dividends, interest, and annuities may not exceed twenty percent of the gross income of the authorized livestock farm corporation or authorized livestock farm limited liability company.9. The authorized livestock farm corporation or authorized livestock farm limited liability company may not engage in the production of crops or the grazing of livestock on farmland or ranchland.10. If the authorized livestock farm corporation or authorized livestock farm limited liability company is intended to primarily comprise an animal feeding operation or concentrated animal feeding operation on farmland or ranchland, the corporation or limited liability company must:a. Begin construction of the facilities used in the animal feeding operation or concentrated animal feeding operation within one year of obtaining the agricultural landholding; andb. Have a fully operational animal feeding operation or concentrated animal feeding operation within six years of obtaining the farmland or ranchland.11. An authorized livestock farm corporation or limited liability company violating this section, or which is inactive for three consecutive years as determined by the agriculture commissioner, is subject to the divestment provisions of section 10-06.1-24.Added by S.L. 2023, ch. 102 (HB 1371),§ 13, eff. 4/28/2023.