Session of 1998
                   
HOUSE BILL No. 3001
         
By Committee on Appropriations
         
3-3
            9             AN ACT enacting the swine enterprise referendum act; relating to agri-
10             cultural corporations, restrictions and exceptions; establishment of
11             swine production facilities, feedlots and slaughterhouses, procedure
12             and election; amending K.S.A. 17-5908 and K.S.A. 1997 Supp. 17-5903
13             and 17-5904 and repealing the existing sections.
14            
15       Be it enacted by the Legislature of the State of Kansas:
16           New Section 1. This act shall be known and may be cited as the swine
17       enterprise referendum act.
18           Sec. 2. K.S.A. 1997 Supp. 17-5903 is hereby amended to read as
19       follows: 17-5903. As used in this act:
20           (a) ``Corporation'' means a domestic or foreign corporation organized
21       for profit or nonprofit purposes.
22           (b) ``Nonprofit corporation'' means a corporation organized not for
23       profit and which qualifies under section 501(c)(3) of the federal internal
24       revenue code of 1986 as amended.
25           (c) ``Limited partnership'' has the meaning provided by K.S.A. 56-
26       1a01, and amendments thereto.
27           (d) ``Limited agricultural partnership'' means a limited partnership
28       founded for the purpose of farming and ownership of agricultural land in
29       which:
30           (1) The partners do not exceed 10 in number;
31           (2) the partners are all natural persons, persons acting in a fiduciary
32       capacity for the benefit of natural persons or nonprofit corporations, or
33       general partnerships other than corporate partnerships formed under the
34       laws of the state of Kansas; and
35           (3) at least one of the general partners is a person residing on the
36       farm or actively engaged in the labor or management of the farming
37       operation. If only one partner is meeting the requirement of this provision
38       and such partner dies, the requirement of this provision does not apply
39       for the period of time that the partner's estate is being administered in
40       any district court in Kansas.
41           (e) ``Corporate partnership'' means a partnership, as defined in
42       K.S.A. 56-306, and amendments thereto, which has within the association
43       one or more corporations or one or more limited liability companies.

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  1           (f) ``Feedlot'' means a lot, yard, corral, or other area in which live-
  2       stock, except swine confined in a feedlot with an animal unit capacity of
  3       1,000 or more for swine, fed for slaughter are confined. The term includes
  4       within its meaning agricultural land in such acreage as is necessary for
  5       the operation of the feedlot.
  6           (g) ``Agricultural land'' means land suitable for use in farming.
  7           (h) ``Farming'' means the cultivation of land for the production of
  8       agricultural crops, the raising of poultry, the production of eggs, the pro-
  9       duction of milk, the production of fruit or other horticultural crops, graz-
10       ing or the production of livestock. Farming does not include the produc-
11       tion of timber, forest products, nursery products or sod, and farming does
12       not include a contract to provide spraying, harvesting or other farm serv-
13       ices.
14           (i) ``Fiduciary capacity'' means an undertaking to act as executor, ad-
15       ministrator, guardian, conservator, trustee for a family trust, authorized
16       trust or testamentary trust or receiver or trustee in bankruptcy.
17           (j) ``Family farm corporation'' means a corporation:
18           (1) Founded for the purpose of farming and the ownership of agri-
19       cultural land in which the majority of the voting stock is held by and the
20       majority of the stockholders are persons related to each other, all of whom
21       have a common ancestor within the third degree of relationship, by blood
22       or by adoption, or the spouses or the stepchildren of any such persons,
23       or persons acting in a fiduciary capacity for persons so related;
24           (2) all of its stockholders are natural persons or persons acting in a
25       fiduciary capacity for the benefit of natural persons; and
26           (3) at least one of the stockholders is a person residing on the farm
27       or actively engaged in the labor or management of the farming operation.
28       A stockholder who is an officer of any corporation referred to in this
29       subsection and who is one of the related stockholders holding a majority
30       of the voting stock shall be deemed to be actively engaged in the man-
31       agement of the farming corporation. If only one stockholder is meeting
32       the requirement of this provision and such stockholder dies, the require-
33       ment of this provision does not apply for the period of time that the
34       stockholder's estate is being administered in any district court in Kansas.
35           (k) ``Authorized farm corporation'' means a Kansas corporation, other
36       than a family farm corporation, all of the incorporators of which are Kan-
37       sas residents, family farm corporations or family farm limited liability
38       agricultural companies or any combination thereof, and which is founded
39       for the purpose of farming and the ownership of agricultural land in
40       which:
41           (1) The stockholders do not exceed 15 in number; and
42           (2) the stockholders are all natural persons, family farm corporations,
43       family farm limited liability agricultural companies or persons acting in a

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  1       fiduciary capacity for the benefit of natural persons, family farm corpo-
  2       rations, family farm limited liability agricultural companies or nonprofit
  3       corporations; and
  4           (3) if all of the stockholders are natural persons, at least one stock-
  5       holder must be a person residing on the farm or actively engaged in labor
  6       or management of the farming operation. If only one stockholder is meet-
  7       ing the requirement of this provision and such stockholder dies, the re-
  8       quirement of this provision does not apply for the period of time that the
  9       stockholder's estate is being administered in any district court in Kansas.
10           (l) ``Trust'' means a fiduciary relationship with respect to property,
11       subjecting the person by whom the property is held to equitable duties
12       to deal with the property for the benefit of another person, which arises
13       as a result of a manifestation of an intention to create it. A trust includes
14       a legal entity holding property as trustee, agent, escrow agent, attorney-
15       in-fact and in any similar capacity.
16           (m) ``Family trust'' means a trust in which:
17           (1) A majority of the equitable interest in the trust is held by and the
18       majority of the beneficiaries are persons related to each other, all of whom
19       have a common ancestor within the third degree of relationship, by blood
20       or by adoption, or the spouses or stepchildren of any such persons, or
21       persons acting in a fiduciary capacity for persons so related; and
22           (2) all the beneficiaries are natural persons, are persons acting in a
23       fiduciary capacity, other than as trustee for a trust, or are nonprofit cor-
24       porations.
25           (n) ``Authorized trust'' means a trust other than a family trust in
26       which:
27           (1) The beneficiaries do not exceed 15 in number;
28           (2) the beneficiaries are all natural persons, are persons acting in a
29       fiduciary capacity, other than as trustee for a trust, or are nonprofit cor-
30       porations; and
31           (3) the gross income thereof is not exempt from taxation under the
32       laws of either the United States or the state of Kansas.
33           For the purposes of this definition, if one of the beneficiaries dies, and
34       more than one person succeeds, by bequest, to the deceased beneficiary's
35       interest in the trust, all of such persons, collectively, shall be deemed to
36       be one beneficiary, and a husband and wife, and their estates, collectively,
37       shall be deemed to be one beneficiary.
38           (o) ``Testamentary trust'' means a trust created by devising or be-
39       queathing property in trust in a will as such terms are used in the Kansas
40       probate code.
41           (p) ``Poultry confinement facility'' means the structures and related
42       equipment used for housing, breeding, laying of eggs or feeding of poultry
43       in a restricted environment. The term includes within its meaning only

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  1       such agricultural land as is necessary for proper disposal of liquid and
  2       solid wastes and for isolation of the facility to reasonably protect the con-
  3       fined poultry from exposure to disease. As used in this subsection, ``poul-
  4       try'' means chickens, turkeys, ducks, geese or other fowl.
  5           (q) ``Rabbit confinement facility'' means the structures and related
  6       equipment used for housing, breeding, raising, feeding or processing of
  7       rabbits in a restricted environment. The term includes within its meaning
  8       only such agricultural land as is necessary for proper disposal of liquid
  9       and solid wastes and for isolation of the facility to reasonably protect the
10       confined rabbits from exposure to disease.
11           (r) ``Swine marketing pool'' means an association whose membership
12       includes three or more business entities or individuals formed for the sale
13       of hogs to buyers but shall not include any trust, corporation, limited
14       partnership or corporate partnership, or limited liability company other
15       than a family farm corporation, authorized farm corporation, limited lia-
16       bility agricultural company, limited agricultural partnership, family trust,
17       authorized trust or testamentary trust.
18           (s) ``Swine production facility'' means the land, structures and related
19       equipment owned or, leased by a corporation or, limited liability com-
20       pany, limited partnership, corporate partnership or trust and used for
21       housing, breeding, farrowing or, feeding or finishing of swine or a nursery
22       for swine. The term includes within its meaning only such agricultural
23       land as is necessary for proper disposal of liquid and solid wastes in en-
24       vironmentally sound amounts for crop production and to avoid nitrate
25       buildup and for isolation of the facility to reasonably protect the confined
26       animals from exposure to disease. The term also includes a lot, yard, corral
27       or other area in which swine fed for slaughter are confined in such lot,
28       yard, corral or other area with an animal unit capacity of 1,000 or more
29       for swine.
30           (t) ``Limited liability company'' has the meaning provided by K.S.A.
31       17-7602, and amendments thereto.
32           (u) ``Limited liability agricultural company'' means a limited liability
33       company founded for the purpose of farming and ownership of agricul-
34       tural land in which:
35           (1) The members do not exceed 10 in number; and
36           (2) the members are all natural persons, family farm corporations,
37       family farm limited liability agriculture companies, persons acting in a
38       fiduciary capacity for the benefit of natural persons, family farm corpo-
39       rations, family farm limited liability agricultural companies or nonprofit
40       corporations, or general partnerships other than corporate partnerships
41       formed under the laws of the state of Kansas; and
42           (3) if all of the members are natural persons, at least one member
43       must be a person residing on the farm or actively engaged in labor or

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  1       management of the farming operation. If only one member is meeting
  2       the requirement of this provision and such member dies, the requirement
  3       of this provision does not apply for the period of time that the member's
  4       estate is being administered in any district court in Kansas.
  5           (v) ``Dairy production facility'' means the land, structures and related
  6       equipment used for housing, breeding, raising, feeding or milking dairy
  7       cows. The term includes within its meaning only such agricultural land
  8       as is necessary for proper disposal of liquid and solid wastes and for iso-
  9       lation of the facility to reasonably protect the confined cows from expo-
10       sure to disease.
11           (w) ``Family farm limited liability agricultural company'' means a lim-
12       ited liability company founded for the purpose of farming and ownership
13       of agricultural land in which:
14           (1) The majority of the members are persons related to each other,
15       all of whom have a common ancestor within the third degree of relation-
16       ship, by blood or by adoption, or the spouses or the stepchildren of any
17       such persons, or persons acting in a fiduciary capacity for persons so
18       related;
19           (2) the members are natural persons or persons acting in a fiduciary
20       capacity for the benefit of natural persons; and
21           (3) at least one of the members is a person residing on the farm or
22       actively engaged in the labor or management of the farming operation.
23       If only one member is meeting the requirement of this provision and
24       such member dies, the requirement of this provision does not apply for
25       the period of time that the member's estate is being administered in any
26       district court in Kansas.
27           (x) ``Hydroponics'' means the growing of vegetables, flowers, herbs,
28       or plants used for medicinal purposes, in a growing medium other than
29       soil.
30           Sec. 3. K.S.A. 1997 Supp. 17-5904 is hereby amended to read as
31       follows: 17-5904. (a) No corporation, trust, limited liability company, lim-
32       ited partnership or corporate partnership, other than a family farm cor-
33       poration, authorized farm corporation, limited liability agricultural com-
34       pany, family farm limited liability agricultural company, limited
35       agricultural partnership, family trust, authorized trust or testamentary
36       trust shall, either directly or indirectly, own, acquire or otherwise obtain
37       or lease any agricultural land in this state. The restrictions provided in
38       this section do not apply to the following:
39           (1) A bona fide encumbrance taken for purposes of security.
40           (2) Agricultural land when acquired as a gift, either by grant or devise,
41       by a bona fide educational, religious or charitable nonprofit corporation.
42           (3) Agricultural land acquired by a corporation or a limited liability
43       company in such acreage as is necessary for the operation of a nonfarming

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  1       business. Such land may not be used for farming except under lease to
  2       one or more natural persons, a family farm corporation, authorized farm
  3       corporation, family trust, authorized trust or testamentary trust. The cor-
  4       poration shall not engage, either directly or indirectly, in the farming
  5       operation and shall not receive any financial benefit, other than rent, from
  6       the farming operation.
  7           (4) Agricultural land acquired by a corporation or a limited liability
  8       company by process of law in the collection of debts, or pursuant to a
  9       contract for deed executed prior to the effective date of this act, or by
10       any procedure for the enforcement of a lien or claim thereon, whether
11       created by mortgage or otherwise, if such corporation divests itself of any
12       such agricultural land within 10 years after such process of law, contract
13       or procedure, except that provisions of K.S.A. 9-1102, and amendments
14       thereto, shall apply to any bank which acquires agricultural land.
15           (5) A municipal corporation.
16           (6) Agricultural land which is acquired by a trust company or bank in
17       a fiduciary capacity or as a trustee for a nonprofit corporation.
18           (7) Agricultural land owned or leased or held under a lease purchase
19       agreement as described in K.S.A. 12-1741, and amendments thereto, by
20       a corporation, corporate partnership, limited corporate partnership or
21       trust on the effective date of this act if: (A) Any such entity owned or
22       leased such agricultural land prior to July 1, 1965, provided such entity
23       shall not own or lease any greater acreage of agricultural land than it
24       owned or leased prior to the effective date of this act unless it is in com-
25       pliance with the provisions of this act; (B) any such entity was in compli-
26       ance with the provisions of K.S.A. 17-5901 prior to its repeal by this act,
27       provided such entity shall not own or lease any greater acreage of agri-
28       cultural land than it owned or leased prior to the effective date of this act
29       unless it is in compliance with the provisions of this act, and absence of
30       evidence in the records of the county where such land is located of a
31       judicial determination that such entity violated the provisions of K.S.A.
32       17-5901 prior to its repeal shall constitute proof that the provisions of this
33       act do not apply to such agricultural land, and that such entity was in
34       compliance with the provisions of K.S.A. 17-5901 prior to its repeal; or
35       (C) any such entity was not in compliance with the provisions of K.S.A.
36       17-5901 prior to its repeal by this act, but is in compliance with the
37       provisions of this act by July 1, 1991.
38           (8) Agricultural land held or leased by a corporation or a limited li-
39       ability company for use as a feedlot, a poultry confinement facility or
40       rabbit confinement facility.
41           (9) Agricultural land held or leased by a corporation for the purpose
42       of the production of timber, forest products, nursery products or sod.
43           (10) Agricultural land used for bona fide educational research or sci-

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  1       entific or experimental farming.
  2           (11) Agricultural land used for the commercial production and con-
  3       ditioning of seed for sale or resale as seed or for the growing of alfalfa by
  4       an alfalfa processing entity if such land is located within 30 miles of such
  5       entity's plant site.
  6           (12) Agricultural land owned or leased by a corporate partnership or
  7       limited corporate partnership in which the partners associated therein are
  8       either natural persons, family farm corporations, authorized farm corpo-
  9       rations, limited liability agricultural companies, family trusts, authorized
10       trusts or testamentary trusts.
11           (13) Any corporation, either domestic or foreign, or any limited lia-
12       bility company, organized for coal mining purposes which engages in
13       farming on any tract of land owned by it which has been strip mined for
14       coal.
15           (14) Agricultural land owned or leased by a limited partnership prior
16       to the effective date of this act.
17           (15) Except as provided by K.S.A. 17-5908 and amendments thereto,
18       agricultural land held or leased by a corporation or a limited liability
19       company for use as a swine production facility in any county which has
20       voted favorably pursuant to K.S.A. 17-5908 and amendments thereto,
21       either by county resolution or by the electorate.
22           (16) Agricultural land held or leased by a corporation or a limited
23       liability company for use as a dairy production facility in any county which
24       has voted favorably pursuant to K.S.A. 17-5907 and amendments thereto,
25       either by county resolution or by the electorate.
26           (17) Agricultural land held or leased by a corporation or a limited
27       liability company used in a hydroponics setting.
28           (18) Agricultural land held or leased by a corporation or a limited
29       liability company prior to July 1, 1998, for use as a feedlot with an animal
30       unit capacity of 1,000 or more for swine.
31           (19) Agricultural land held or leased by any business entity listed in
32       K.S.A. 17-5903 and amendments thereto, or any individual person prior
33       to July 1, 1998, for use as a swine production facility as such term was
34       defined prior to July 1, 1998.
35           (20) Agricultural land held or leased by any swine production facility
36       that is located in a county which upon a proposition was resubmitted to
37       the electors as provided in subsection (f) of K.S.A. 17-5908 and amend-
38       ments thereto and the electors voted not to allow a swine production
39       facility to be established in such county if such agricultural land was held
40       or leased prior to the time of the election.
41           (21) Agricultural land held or leased by any slaughterhouse or pack-
42       ing plant for swine as provided in subsection (b)(2) prior to July 1, 1998.
43           (b) (1) No business entity, listed in K.S.A. 17-5903 and amendments

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  1       thereto, or any individual person who owns over 50,000 sows in total
  2       ownership regardless of whether the sows are located in Kansas or else-
  3       where, or who anticipates locating a swine production facility with an
  4       animal unit capacity of 2,500 or more in Kansas or whether currently
  5       owning such sows or anticipating building a swine production facility or
  6       facilities which will house such sows, either directly or indirectly, shall
  7       own, acquire or otherwise obtain or lease any agricultural land in any
  8       county in this state until such county has voted favorable pursuant to
  9       K.S.A. 17-5908, and amendments thereto, either by county resolution or
10       by the electorate.
11           (2) No slaughterhouse which slaughters swine in an amount of
12       500,000 or more swine annually or a packing plant for swine in an amount
13       of 500,000 or more swine annually, or both, shall own, acquire or oth-
14       erwise obtain or lease any agricultural or other land in any county in this
15       state until such county has voted favorably pursuant to K.S.A. 17-5908
16       and amendments thereto, either by county resolution or by the electorate.
17           (c) Production contracts entered into by a corporation, trust, limited
18       liability company, limited partnership or corporate partnership and a per-
19       son engaged in farming for the production of agricultural products shall
20       not be construed to mean the ownership, acquisition, obtainment or lease,
21       either directly or indirectly, of any agricultural land in this state.
22           (c) (d) Any corporation, trust, limited liability company, limited part-
23       nership or corporate partnership, other than a family farm corporation,
24       authorized farm corporation, limited liability agricultural company, family
25       farm limited liability agricultural company, limited agricultural partner-
26       ship, family trust, authorized trust or testamentary trust, violating the
27       provisions of this section shall be subject to a civil penalty of not more
28       than $50,000 and shall divest itself of any land acquired in violation of
29       this section within one year after judgment is entered in the action. The
30       district courts of this state may prevent and restrain violations of this
31       section through the issuance of an injunction. The attorney general or
32       district or county attorney shall institute suits on behalf of the state to
33       enforce the provisions of this section.
34           (d) (e) Civil penalties sued for and recovered by the attorney general
35       shall be paid into the state general fund. Civil penalties sued for and
36       recovered by the county attorney or district attorney shall be paid into
37       the general fund of the county where the proceedings were instigated.
38           Sec. 4. K.S.A. 17-5908 is hereby amended to read as follows: 17-
39       5908. (a) (1) The board of county commissioners, by resolution, may
40       permit a swine production facility, as defined in K.S.A. 17-5903, and
41       amendments thereto, or pursuant to subsection (b) of K.S.A. 17-5904,
42       and amendments thereto to be established within the county. Such res-
43       olution shall be published once each week for two consecutive weeks in

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  1       the official county newspaper. The resolution shall take effect 60 days
  2       after final publication unless a valid petition in opposition to the same is
  3       filed.
  4           (2) If within 60 days of the final publication of the resolution, a valid
  5       protest petition to submit the resolution to the qualified voters of the
  6       county is signed by qualified electors of the county equal in number to
  7       not less than 5% of the electors of the county who voted for the office of
  8       secretary of state at the last preceding general election at which such
  9       office was elected and is filed with the county election officer, the county
10       election officer shall submit the question of whether a swine production
11       facility shall be allowed to be established in such county at the next state
12       or county-wide regular or special election.
13           (b) (1) The board of county commissioners, upon a petition filed in
14       accordance with paragraph (b)(2), shall submit to the qualified electors
15       of the county a proposition to permit a swine production facility, as de-
16       fined in K.S.A. 17-5903, and amendments thereto, or pursuant to sub-
17       section (b) of K.S.A. 17-5904, and amendments thereto, to be established
18       within the county.
19           (2) A petition to submit a proposition to the qualified voters of a
20       county pursuant to this section shall be filed with the county election
21       officer. The petition shall be signed by qualified electors of the county
22       equal in number to not less than 5% of the electors of the county who
23       voted for the office of secretary of state at the last preceding general
24       election at which such office was elected. The following shall appear on
25       the petition:
26           ``We request an election to determine whether a corporate swine production facility shall
27       be allowed to be established in ________&nbspc/ounty, pursuant to K.S.A. 17-5904.''
28           (3) Upon the submission of a valid petition calling for an election
29       pursuant to this subsection, the county election officer shall submit the
30       question of whether a swine production facility shall be allowed to be
31       established in such county at the next state or county-wide regular or
32       special election which occurs more than 60 days after the petition is filed
33       with the county election officer.
34           (c) If a majority of the votes cast and counted are in opposition to
35       allowing swine production facilities to be established in such county, the
36       county election officer shall transmit a copy of the result to the secretary
37       of state who shall publish in the Kansas register the result of such election
38       and that swine production facilities are not allowed to be established in
39       such county.
40           (d) If a majority of the votes cast and counted is in favor of the prop-
41       osition, the county election officer shall transmit a copy of the result to
42       the secretary of state who shall publish in the Kansas register the result
43       of such election and that swine production facilities are allowed to be

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  1       established in such county.
  2           (e) The election provided for by this section shall be conducted, and
  3       the votes counted and canvassed, in the manner provided by law for
  4       question submitted elections of the county.
  5           (f) When the proposition of whether a swine production facility shall
  6       be allowed to be established in a county has been submitted to the electors
  7       or a resolution permitting the establishment of a swine production facility
  8       has been adopted, such proposition may be resubmitted to the electors of
  9       such county or the resolution may be submitted to the electors not more
10       often than once every two years thereafter, whenever a valid petition has
11       been submitted to the board of county commissioners signed by qualified
12       electors of the county equal in number to not less than 5% of the electors
13       of the county who voted for the office of secretary of state at the last
14       preceding general election at which such office was elected. The county
15       election officer shall submit the question at the next state or county-wide
16       regular or special election which occurs more than 60 days after the pe-
17       tition is filed with the county election officer. The results of such election
18       shall be binding and shall supersede any previous election or resolution.
19           Sec. 5. K.S.A. 17-5908 and K.S.A. 1997 Supp. 17-5903 and 17-5904
20       are hereby repealed.
21           Sec. 6. This act shall take effect and be in force from and after its
22       publication in the statute book.
23