The prayer was offered by the Chaplain, Gerry King, followed by the Pledge of Allegiance led by Senate page Rachel Hilt.

     Roll Call: All members present.

     The Committee on Legislative Procedure respectfully reports that the Secretary of the Senate has had under consideration the Senate Journal of the twenty-first day.

     All errors, typographical or otherwise, are duly marked in the temporary journal for correction.

     And we hereby move the adoption of the report.

     "Section 1. The secretary of the Department of Education and Cultural Affairs shall promulgate rules, pursuant to chapter 1-26, that calculate exclusions for revenue received from opting out of the property tax limitations such that all expenditures shall be credited to formula revenue and unreserved general fund balance from the preceding fiscal year prior to any credits against opt-out revenue."

Also MADAM PRESIDENT:

    The Committee on Appropriations respectfully reports that it has had under consideration SB 3, 112, 138, 153, and 159 which were deferred to the 36^th Legislative Day.

     "Section 1. A county or municipality may provide fire service or enter into an agreement for the provision of fire service. Any county or municipality may appropriate funds for fire services and may enter into an agreement with any other governmental subdivision or with any nonprofit fire protection corporation or association legally organized for fire services to furnish funds for fire suppression purposes on an annual basis as may mutually be agreed upon. The funds shall be paid to the political subdivision or nonprofit when a claim has been duly filed, audited, and allowed by the county or municipality.

     Section 2. If any county, municipality, or other fire department makes a fire suppression call, the governing body, may at its discretion, bill the property owner of record for the cost of answering the fire suppression call. The governing body shall pass a resolution by a two-thirds vote to bill the property owner. The resolution shall state the owner of record, the legal description, the date of the fire suppressant call, and the cost to be charged to the property owner for the fire suppressant call. The resolution shall be sent by certified mail to the owner of record. If not paid within thirty days from receipt of resolution, the bill for the fire suppressant call may be filed as a lien on the property.

     Section 3. No lien as provided in this Act shall be effective, however, unless a certified written notice containing the name of the owner of record and legal description of the property receiving a fire suppressant service, the date the service was rendered, and the name of the person or persons alleged to be responsible for payment for the services is filed in the office of the register of deeds of the county in which the person receiving the services resides, or in the county of the person's residence or last residence if the person is deceased.

     Section 4. If any person receiving fire suppressant service is a married person, the lien therein established shall also be a lien upon all the property, real and personal including joint tenancy and homestead interests, property thereafter acquired, or interest in property, of the husband or wife of such person receiving fire suppressant service as the case may be. The lien does not sever a joint tenancy, nor affect the right of survivorship except that the lien is enforceable to the extent that the person receiving fire suppressant service had an interest prior to the person's death.

     Section 5. Any lien established by virtue of this Act may be foreclosed by action or compromised and settled in the manner prescribed by chapter 28-14, relating to public aid to poor liens."

    The Committee on Taxation respectfully reports that it has had under consideration HB 1219 and returns the same with the recommendation that said bill be amended as follows:

Also MADAM PRESIDENT:

    The Committee on Taxation respectfully reports that it has had under consideration SB 4 which was deferred to the 36^th Legislative Day.

     "Section 3. That chapter 34-6 be amended by adding thereto a NEW SECTION to read as follows:

use, distribution, marketing, promotion, and sale of tobacco products that are more restrictive than those provided for by the Legislature."

    The Committee on State Affairs respectfully reports that it has had under consideration SB 156 and returns the same with the recommendation that said bill be amended as follows:

     "Section 1. That § 47-9A-1 be amended to read as follows:

     47-9A-1.   The Legislature of the State of South Dakota recognizes the importance of the family farm to the economic and moral stability of the state, and the Legislature recognizes that the existence of the independent family farm is threatened by conglomerates important to the economic viability of rural South Dakota and is jeopardized by downward vertical integration in farming. Therefore, it is hereby declared to be the public policy of this state, and shall be the provision of this chapter, that, notwithstanding the provisions of §  47-2-3, no foreign or domestic corporation legal entity which limits the individual liability of its owners or investors , except as provided herein, shall be formed or licensed under the South Dakota Business Corporation Act laws of this state for the purpose of owning, leasing, holding, or otherwise controlling agricultural land to be used in the business of agriculture or owning livestock .

     Section 2. That § 47-9A-2 be amended to read as follows:

     47-9A-2.   Terms used in this chapter , unless the context otherwise plainly requires, mean:

distributor of farm products or supplies provides spraying, harvesting or other farm services; , or the ownership of livestock; and

     47-9A-3.   Except as provided herein in this chapter , no foreign or domestic corporation may own livestock for more than two weeks prior to delivery for slaughter or engage in farming; nor may any foreign or domestic corporation, directly or indirectly, own, acquire, or otherwise obtain an interest, whether legal, beneficial, or otherwise, in any title to real estate used for farming or capable of being used for farming agricultural land in this state.

     Section 4. That § 47-9A-3.1 be repealed.

     47-9A-3.1.   The restrictions of §  47-9A-3 do not apply to the cultivation of edible fruits, vegetables, or mushrooms if such cultivation occurs within a greenhouse or other enclosed or semi-enclosed structure.

     Section 5. That § 47-9A-4 be repealed.

     47-9A-4.   Any national or state chartered bank, or trust company, authorized to do business in this state shall be exempt from the provisions of this chapter; provided, however, that no national or state bank or trust company shall purchase agricultural lands in South Dakota through a pooled investment fund formed from assets from retirement, pension, profit sharing, stock bonds, or other trusts.

     Section 6. That § 47-9A-5 be amended to read as follows:

     47-9A-5.   The restrictions of §  47-9A-3 shall § §  47-9A-1 and 47-9A-3 do not apply to agricultural land and land capable of being used for farming or livestock which:

     47-9A-6.   The restrictions provided in §  47-9A-3 shall not apply to a bona fide encumbrance taken for purposes of security.

     Section 8. That § 47-9A-7 be repealed.

     47-9A-7.   The restrictions of §  47-9A-3 shall not apply to agricultural lands acquired by a corporation by process of law in the collection of debts; or by any procedure for the enforcement of a lien or claim thereon, whether created by mortgage or otherwise; provided, however, that all lands so acquired be disposed of within ten years after acquiring the title thereto, and further provided that the land so acquired shall not be used for farming during the ten-year period except under a lease to a family farm unit, a family farm corporation, or an authorized farm corporation. The aforementioned ten-year limitation period shall be deemed a covenant running

with the title to the land against any corporate grantee or assignee or the successor of such corporation.

     Section 9. That § 47-9A-8 be repealed.

     47-9A-8.   The restrictions of §  47-9A-3 shall not apply to gifts of agricultural lands, either by grant or devise, to any corporation organized under chapter 47-22.

     Section 10. That § 47-9A-9 be repealed.

     47-9A-9.   The restrictions of §  47-9A-3 shall not apply to a farm operated for research or experimental purposes; provided, that any commercial sales from such farm shall be incidental to the research or experimental objectives of the corporation.

     Section 11. That § 47-9A-10 be repealed.

     47-9A-10.   The restrictions of §  47-9A-3 shall not apply to agricultural land operated by a corporation for the purpose of raising breeding stock for resale to farmers or operated for the purpose of growing seed, nursery plants, or sod.

     Section 12. That § 47-9A-11 be repealed.

     47-9A-11.   The restrictions of §  47-9A-3 shall not apply to agricultural lands acquired by a corporation solely for the purpose of feeding livestock.

     Section 13. That § 47-9A-12 be amended to read as follows:

     47-9A-12.   The restrictions of §  47-9A-3 shall do not apply to agricultural land acquired by a corporation other than a family farm corporation or authorized farm corporation for immediate or potential use in nonfarming purposes. A corporation may hold such agricultural land in such acreage as may be necessary to its nonfarm business operation; provided, however, that pending the development of agricultural land for nonfarm purposes, such land may not be used for farming except under lease to a family farm unit, a family farm corporation or an authorized farm corporation, or except when controlled through ownership, options, leaseholds or other agreements by a corporation which has entered into an agreement with the United States of America pursuant to the New Community Act of 1968, (Title IV of the Housing and Urban Development Act of 1968, 42 U.S.C. 3901-3914), as amended, or a subsidiary or assign of such a corporation.

     Section 14. That § 47-9A-13 be repealed.

     47-9A-13.   The restrictions of §  47-9A-3 shall not apply to a family farm corporation or an authorized farm corporation.

     Section 15. That § 47-9A-13.1 be repealed.

     47-9A-13.1.   No corporation, except a family farm corporation, may own or operate any hog confinement facility. For the purposes of this chapter a hog confinement facility is any real

estate used for the breeding, farrowing, and raising of swine. This restriction shall not apply to the acquisition of a hog confinement facility by a corporation by process of law in the collection of debts, or by any other procedure for the enforcement of a lien or claim thereon, as provided in §   47-9A-7.

     Section 16. That § 47-9A-14 be repealed.

     47-9A-14.   As used in this chapter, unless the context otherwise plainly requires, "family farm corporation" means a corporation founded for the purpose of farming and the ownership of agricultural land in which the majority of the voting stock is held by the majority of the stockholders who are members of a family related to each other within the third degree of kindred, and at least one of whose stockholders is a person who is residing on or actively operating the farm or who has resided on or has actively operated the farm, and none of whose stockholders are corporations, or a corporation founded for the purpose of farming and the ownership of agricultural land in which a majority of the voting stock is held by resident stockholders who are family farmers and are actively engaged in farming as their primary economic activity. However, a family farm corporation does not cease to qualify as such hereunder by reason of any devise or bequest of shares of voting stock or by reason of any gift of shares of voting stock to any person who is entitled to inherit from the donor if the donor were to die intestate.

     Section 17. That § 47-9A-15 be repealed.

     47-9A-15.   As used in this chapter, unless the context otherwise plainly requires, "authorized farm corporation" means a corporation whose shareholders do not exceed ten in number, whose shareholders are all natural persons or estates, whose shares are all of one class, and whose revenues from rent, royalties, dividends, interest, and annuities do not exceed twenty percent of its gross receipts.

     Section 18. That § 47-9A-16 be amended to read as follows:

     47-9A-16.   Every corporation or limited liability entity engaged in farming or proposing to commence farming in this state shall file with the secretary of state a report containing:

     47-9A-17.   The report of a corporation seeking to qualify hereunder as a family farm corporation or an authorized farm corporation shall contain, in addition:

     47-9A-18.   No corporation shall or limited liability entity may commence farming in this state until the secretary of state has inspected the report required by §  47-9A-16 and certified that its proposed operations comply with the provisions of § §  47-9A-16 and 47-9A-17 §  47-9A- 16 .

     Section 21. That § 47-9A-19 be repealed.

     47-9A-19.   Every corporation engaged in farming in this state shall, prior to the first day of the second month following the anniversary month of the corporation of each year, file with the secretary of state a report containing the information required in this chapter, based on its operations in the preceding calendar year and its status at the end of such year.

     Section 22. That § 47-9A-20 be amended to read as follows:

     47-9A-20.   Any corporation or limited liability entity which fails to file any report required by this chapter or intentionally files false information on any report required by this chapter is subject to a civil fine of not more than one thousand dollars.

     Section 23. That § 47-9A-21 be amended to read as follows:

     47-9A-21.   If the attorney general has reason to believe that a corporation or limited liability entity is in violation of this chapter, he the attorney general shall commence an action in the circuit court for the county in which any agricultural lands relative to such violation are situated, or if situated in two or more counties, in any county in which a substantial part of the lands are situated. If the court finds that the lands in question are being held in violation of this chapter, it shall enter an order so declaring.

     Section 24. That § 47-9A-22 be amended to read as follows:

     47-9A-22.   The attorney general shall file any order under §  47-9A-21 for record with the register of deeds of each county in which any portion of said the lands are located. Thereafter, the corporation or limited liability entity owning such land shall have a period of five years from the date of such order to divest itself of such lands. The aforementioned five-year limitation

period shall be deemed a covenant running with the title to the land against any corporate grantee or assignee or the successor of such corporation entity . Any lands not so divested within the time prescribed shall be sold at public sale in the manner prescribed by order of the court.

     Section 25. That § 47-9A-23 be amended to read as follows:

     47-9A-23.   This chapter shall be known and may be cited as the Family Farm Act of 1974 .

     Section 26. The provisions of this Act become effective on July 1, 2002, if the electors of the State of South Dakota approve the repeal of sections 21, 22, 23, and 24 of Article XVII of the South Dakota Constitution at the June 2002, primary election."

Also MADAM PRESIDENT:

    The Committee on State Affairs respectfully reports that it has had under consideration SB  67 which was deferred to the 36^th Legislative Day.

MADAM PRESIDENT:

    I have the honor to transmit herewith HB 1171, 1229, 1237, 1281, and 1289 which have passed the House and your favorable consideration is respectfully requested.

     Which motion prevailed.

     So the motion having received an affirmative vote of a majority of the members-elect, the President declared the motion carried and SB 151 was so placed.

     Excused:
Sutton (Dan)

     So the bill having received an affirmative vote of a majority of the members-elect, the President declared the bill passed and the title was agreed to.

     Yeas:
Albers; Bogue; Brosz; Diedtrich (Elmer); Everist; Koskan; McCracken; Munson; Olson (Ed); Vitter

     Nays:
Apa; Brown (Arnold); Cradduck; de Hueck; Dennert; Diedrich (Larry); Drake; Duxbury; Greenfield; Hagen; Ham; Hutmacher; Kleven; Koetzle; Madden; McIntyre; Moore; Putnam; Reedy; Staggers; Sutton (Dan); Symens; Volesky; Whiting

     Excused:
Daugaard

     So the bill not having received an affirmative vote of a majority of the members-elect, the President declared the bill lost.

     So the bill having received an affirmative vote of a majority of the members-elect, the President declared the bill passed and the title was agreed to.

    Which request was supported.

    The question being on Sen. Koetzle's motion that SB 181 be further amended.

     And the roll being called:

     Yeas 12, Nays 21, Excused 2, Absent 0

     Yeas:
de Hueck; Dennert; Duxbury; Hagen; Hutmacher; Koetzle; McIntyre; Moore; Munson; Reedy; Symens; Volesky

     Nays:
Albers; Apa; Bogue; Brosz; Brown (Arnold); Cradduck; Diedrich (Larry); Diedtrich (Elmer); Drake; Everist; Greenfield; Ham; Kleven; Koskan; Madden; McCracken; Olson (Ed); Putnam; Staggers; Vitter; Whiting

     Excused:
Daugaard; Sutton (Dan)

     So the motion not having received an affirmative vote of a majority of the members present, the President declared the motion lost.

     Having had its second reading was up for consideration and final passage.

     Was read the first time and referred to the Committee on Commerce.

     So the bill having received an affirmative vote of a majority of the members-elect, the President declared the bill passed and the title was agreed to.

     Was read the second time.

     Excused:
Daugaard

     So the bill having received an affirmative vote of a majority of the members-elect, the President declared the bill passed and the title was agreed to.