AB630: Bill Text

LRB-0347/1

RCT:kmg:km

1995 - 1996 LEGISLATURE

1995 Assembly BILL 630

October 26, 1995 - Introduced by Representatives Ott, Olsen, Owens, Seratti, Lehman, Hahn, Zukowski, Goetsch and Wilder, cosponsored by Senator A. Lasee, by request of Department of Agriculture, Trade and Consumer Protection. Referred to Committee on Agriculture.

AB630,1,11 An Act to repeal 100.03 (1) (n), 100.03 (1) (zp), 100.03 (8) (b) 6. and 100.03 (8) (bm); to renumber and amend 100.03 (1) (e); to amend 20.115 (1) (gm), 97.29 (4), 100.03 (title), 100.03 (1) (a) (intro.), 100.03 (1) (f), 100.03 (1) (v) to (wm), 100.03 (1) (zm), 100.03 (2) (a), 100.03 (3) (a) 2., 100.03 (3) (b), 100.03 (4) (a), 100.03 (4) (c), 100.03 (4) (f), 100.03 (5) (a) 2., 100.03 (5) (b), 100.03 (5) (c), 100.03 (5) (e), 100.03 (6) (b) 1., 100.03 (6) (b) 3., 100.03 (6) (b) 4., 100.03 (7) (a) 1., 100.03 (7) (c) (intro.), 100.03 (7) (c) 1., 100.03 (15) (title), 100.03 (15) (a) (intro.), 100.03 (15) (c), 100.03 (18) and 100.03 (19) (a) (intro.); to repeal and recreate 100.03 (7) (a) 2.; and to create 100.03 (1) (ym), 100.03 (1) (zs), 100.03 (5) (am), 100.03 (7) (a) 3. and 100.03 (8) (cm) of the statutes; relating to: fruit and vegetable producer security.

Analysis by the Legislative Reference Bureau

This bill makes numerous changes in the laws regulating fruit and vegetable contractors, known as the fruit and vegetable producer security program. A fruit and vegetable contractor is a person who buys fruit or vegetables that are grown in this state for use in food processing or who contracts with a producer to grow fruit or vegetables in this state for use in food processing.

This bill eliminates persons who buy or contract to buy fruit from regulation under the current fruit and vegetable security program.

Under current law, a fruit and vegetable contractor is required to obtain an annual registration certificate from the department of agriculture, trade and consumer protection (DATCP). The registration certificate expires on March 31. Under this bill, a vegetable contractor annual registration certificate expires on January 31.

Under current law, a contractor must file an annual financial statement with DATCP as a condition of renewal or continuation of the contractor's registration certificate. This bill requires that all annual financial statements be audited or reviewed by a public accountant. The bill also requires a vegetable contractor to file, with each application for renewal, an interim financial statement as of the quarter that ends closest to November 30.

Under current law, a contractor generally must either meet minimum financial requirements or file security with the DATCP. Under current law, the financial requirements are that the contractor's ratio of current assets to current liabilities be at least 1.2 to 1.0 and that the contractor's total assets exceed total liabilities. Under this bill, the financial requirements are:

1. The contractor's ratio of current assets to current liabilities must be at least 1.2 to 1.0 on its annual financial statement.

2. The contractor's ratio of current assets to current liabilities must be at least 1.0 to 1.0 at all times other than the end of the contractor's fiscal year.

3. The contractor must have equity equal to at least 25% of total assets at all times.

The bill phases in the amount of security that must be provided by a vegetable contractor who does not meet the financial standards as changed by this bill but who does meet the financial standards under current law.

This bill also eliminates the method of providing financial security under which processed farm products equivalent to not less than 30% of the raw farm products received from producers are set aside in trust for producers.

For further information see the state fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB630, s. 1 Section 1. 20.115 (1) (gm) of the statutes is amended to read:

AB630,3,2 20.115 (1) (gm) (title) Dairy trade regulation; dairy and farm product and vegetable producer security. The amounts in the schedule for the regulation of farm product vegetable procurement under s. 100.03, of dairy plant financial condition under s. 100.06 and of dairy trade practices under s. 100.201. All moneys received under ss. 100.03 (3) (a) 3., 100.06 (9) and 100.201 (6) shall be credited to this appropriation, but any balance at the close of a fiscal biennium that exceeds 20% of the previous fiscal year's expenditures under this appropriation shall lapse to the general fund.

AB630, s. 2 Section 2. 97.29 (4) of the statutes is amended to read:

AB630,3,12 97.29 (4) (title) Food processing plants buying farm products vegetables from producers. The department may not issue or renew a license to operate a food processing plant to any applicant who is a contractor, as defined in s. 100.03 (1) (f), unless the applicant has filed all financial information and any security that is required under s. 100.03. If an applicant has not filed all financial information and any security that is required under s. 100.03, the department may issue a conditional license under s. 93.06 (8) that prohibits the licensed operator from procuring farm products vegetables from a producer or a producer's agent, but allows the operator to procure farm products vegetables from other sources.

AB630, s. 3 Section 3. 100.03 (title) of the statutes is amended to read:

AB630,3,15 100.03 (title) Farm product Vegetable procurement; financial security; grading and tare.

AB630, s. 4 Section 4. 100.03 (1) (a) (intro.) of the statutes is amended to read:

AB630,3,18 100.03 (1) (a) (intro.) "Affiliate" means any of the following persons or business entities that procures farm products vegetables for use by an operator:

AB630, s. 5 Section 5. 100.03 (1) (e) of the statutes is renumbered 100.03 (1) (bm) and amended to read:

AB630,4,2 100.03 (1) (bm) "Certified Audited financial statement" means a financial statement that, in the accompanying opinion of an independent certified public accountant or a public accountant holding a certificate of authority under ch. 442, fairly and in all material respects represents the financial position of the contractor, the results of the contractor's operations and the contractor's cash flows in conformity with generally accepted accounting principles.

AB630, s. 6 Section 6. 100.03 (1) (f) of the statutes is amended to read:

AB630,4,8 100.03 (1) (f) "Contractor" means a person who buys farm products vegetables grown in this state from a producer, or who contracts with a producer to grow farm products vegetables in this state, regardless of whether the contractor is located in this state or is engaged in food processing. "Contractor" does not include any of the following:

AB630,4,11 1. A person who procures fruits and vegetables primarily for unprocessed fresh market use and is licensed under the federal perishable agricultural commodities act, 7 USC 499.

AB630,4,13 2. A restaurant or retail food establishment that procures farm products vegetables solely for retail sale at the restaurant or retail food establishment.

AB630, s. 7 Section 7. 100.03 (1) (n) of the statutes is repealed.

AB630, s. 8 Section 8. 100.03 (1) (v) to (wm) of the statutes are amended to read:

AB630,4,19 100.03 (1) (v) "Payment on delivery" means cash payment of the full agreed price for a farm product vegetable when the farm product vegetable is tendered or delivered to a contractor, or cash payment of the full agreed price within 72 hours after delivery if the farm product vegetable is graded.

AB630,4,23 (vm) "Procurement contract" means an oral or written agreement between a contractor and a producer, under which the contractor buys a farm product vegetable grown in this state from the producer or contracts with the producer to grow a farm product vegetable in this state.

AB630,4,25 (w) "Producer" means a person who produces and sells a farm product vegetable, or who grows a farm product vegetable under contract.

AB630,5,2 (wm) "Producer claim" means a claim held by a producer for his or her farm products vegetables.

AB630, s. 9 Section 9. 100.03 (1) (ym) of the statutes is created to read:

AB630,5,5 100.03 (1) (ym) "Reviewed financial statement" means a financial statement, other than an audited financial statement, that is all of the following:

AB630,5,6 1. Sworn and notarized by the contractor.

AB630,5,9 2. Reviewed according to generally accepted accounting principles by an independent certified public accountant or a public accountant holding a certificate of authority under ch. 442.

AB630, s. 10 Section 10. 100.03 (1) (zm) of the statutes is amended to read:

AB630,5,13 100.03 (1) (zm) "Subsidiary" means a corporation or business entity that is owned, controlled or operated by an operator, and that procures a farm product vegetable for use by the operator.

AB630, s. 11 Section 11. 100.03 (1) (zp) of the statutes is repealed.

AB630, s. 12 Section 12. 100.03 (1) (zs) of the statutes is created to read:

AB630,5,18 100.03 (1) (zs) "Vegetable" means any vegetable that is grown or sold for use in food processing, whether or not that vegetable is actually processed as food. "Vegetable" includes sweet corn, but does not include grain.

AB630, s. 13 Section 13. 100.03 (2) (a) of the statutes is amended to read: