AB230, s. 52 13Section 52. 127.06 (5) and (6) of the statutes are created to read:
AB230,20,1814 127.06 (5) Grain dealer; disclosure of amount of grain purchased. With
15every financial statement filed under sub. (1m), a grain dealer shall file a statement,
16on a form furnished by the department, showing the total dollar value of grain that
17the grain dealer purchased from producers during the grain dealer's last completed
18fiscal year and during each month of that fiscal year.
AB230,21,2 19(6) Liability adjustments. (a) For purposes of s. 127.065 (1) (c) or 127.067 (1)
20(c), a warehouse keeper or grain dealer may deduct, from the amount of a liability
21reported in the warehouse keeper's or grain dealer's financial statement, any of the
22liability adjustments allowed for the warehouse keeper or grain dealer under pars.
23(b) to (f) if the amount of the liability adjustments and of the offsetting assets are
24disclosed in the notes to the financial statement. The total amount of the liability
25adjustments under pars. (b) to (f) may not exceed the total amount of the

1corresponding assets, identified in the notes to the financial statement, that justify
2the adjustments.
AB230,21,83 (b) A grain dealer may deduct amounts that the grain dealer has borrowed from
4a lending institution and deposited with a commodities broker to maintain an
5account to hedge grain transactions. The amount of the deduction shall be the lesser
6of the amount deposited with the commodities broker or the amount owed to the
7lending institution for funds borrowed from the lending institution and deposited
8with the commodities broker.
AB230,21,149 (c) A grain dealer may deduct amounts that the grain dealer has borrowed from
10a lending institution to buy grain that has been shipped and is in transit if the grain
11dealer has a collectible account receivable for that grain on the date of the balance
12sheet. The amount of the deduction shall be the lesser of the amount receivable by
13the grain dealer for the grain that has been shipped and is in transit or the amount
14that the grain dealer owes to the lending institution for funds used to buy that grain.
AB230,21,1915 (d) A grain dealer may deduct amounts that the grain dealer has borrowed from
16a lending institution and that are secured by grain owned by the grain dealer and
17held in the grain dealer's inventory. The amount of the deduction shall be the lesser
18of the value of the grain pledged as security or the amount owed to the lending
19institution.
AB230,21,2520 (e) A grain dealer may deduct amounts that the grain dealer has borrowed from
21a lending institution and used to buy grain that the grain dealer holds in inventory
22on the date of the balance sheet if the grain dealer has entered into a written contract
23to sell the grain. The amount of the deduction shall be the lesser of the amount owed
24to the lending institution or the value of the grain purchased with the borrowed funds
25and held in inventory to fill the sales contract.
AB230,22,6
1(f) A warehouse keeper or a grain dealer may deduct amounts that the
2warehouse keeper or grain dealer has borrowed from a lending institution and used
3to pay for fertilizer, pesticides, herbicides or seed that the warehouse keeper or grain
4dealer holds in inventory on the date of the balance sheet. The amount of the
5deduction shall be the lesser of the amount owed to the lending institution or the cost
6of the fertilizer, pesticides, herbicides or seed purchased with the borrowed funds.
AB230, s. 53 7Section 53. 127.065 of the statutes is created to read:
AB230,22,10 8127.065 Minimum financial standards; warehouse keepers. (1)
9Requirement. Except as provided in sub. (2), a warehouse keeper other than an
10exempt warehouse keeper shall meet all of the following financial standards:
AB230,22,1311 (a) On the date of the warehouse keeper's initial financial statement under s.
12127.06 (1) (a) 1. and at the end of each fiscal year, the ratio of the warehouse keeper's
13current assets to current liabilities shall be at least 1.25 to 1.
AB230,22,1514 (b) At all times other than the times under par. (a), the ratio of the warehouse
15keeper's current assets to current liabilities shall be at least 1 to 1.
AB230,22,1916 (c) The warehouse keeper's total assets shall at all times exceed total liabilities,
17adjusted as provided in s. 127.06 (6), by at least $50,000 or the product obtained by
18multiplying the capacity of the warehouse keeper's warehouses by 10 cents,
19whichever is greater.
AB230,22,21 20(2) Exemptions. A warehouse keeper is not required to comply with sub. (1) if
21the warehouse keeper does all of the following:
AB230,22,2322 (a) Files with the department a bond or other security that complies with s.
23127.07.
AB230,22,2424 (b) Files monthly reports with the department under s. 127.069.
AB230,23,4
1(3) Notice of changes. A warehouse keeper that is required to comply with
2sub. (1) shall notify the department whenever the warehouse keeper knows or has
3reason to believe that the warehouse keeper no longer meets a financial standard
4under sub. (1).
AB230, s. 54 5Section 54. 127.067 of the statutes is created to read:
AB230,23,9 6127.067 Minimum financial standards; grain dealers. (1) Requirement.
7Except as provided in sub. (2), each Class B grain dealer that uses any deferred
8payment contract or deferred price contract to buy grain from a producer and each
9Class A grain dealer shall meet all of the following financial standards:
AB230,23,1210 (a) On the date of the grain dealer's initial financial statement under s. 127.06
11(1m) (b) 1. and at the end of each fiscal year, the ratio of the grain dealer's current
12assets to current liabilities shall be at least 1.25 to 1.
AB230,23,1413 (b) At all times other than the times under par. (a), the ratio of the grain dealer's
14current assets to current liabilities shall be at least 1 to 1.
AB230,23,1715 (c) The grain dealer's total assets shall at all times exceed total liabilities,
16adjusted as provided in s. 127.06 (6), by $15,000 or the amount required to achieve
17a ratio of total liabilities to equity of not more than 5 to 1, whichever is greater.
AB230,23,19 18(2) Exemptions. A grain dealer is not required to comply with sub. (1) if the
19grain dealer does all of the following:
AB230,23,2120 (a) Files with the department a bond or other security that complies with s.
21127.07.
AB230,23,2222 (b) Files monthly reports with the department under s. 127.069.
AB230,23,25 23(3) Notice of changes. A grain dealer that is required to comply with sub. (1)
24shall notify the department whenever the grain dealer knows or has reason to believe
25that the grain dealer no longer meets a financial standard under sub. (1).
AB230, s. 55
1Section 55. 127.069 of the statutes is created to read:
AB230,24,8 2127.069 Monthly reports; warehouse keepers and grain dealers. (1)
3Warehouse keeper. A warehouse keeper, other than an exempt warehouse keeper,
4that does not meet the financial standards under s. 127.065 (1) shall file monthly
5reports with the department. The warehouse keeper shall file each monthly report
6no later than the 10th day of each month. Each monthly report shall state the
7inventory of each type of grain in storage in each of the warehouse keeper's
8warehouses on the last day of the previous month.
AB230,24,10 9(2) Grain dealers. (a) All of the following shall file monthly reports with the
10department:
AB230,24,1211 1. A Class A grain dealer that does not meet the financial standards under s.
12127.067 (1).
AB230,24,1513 2. A Class B grain dealer that uses any deferred payment contract or deferred
14price contract to buy grain from producers and that does not meet the financial
15standards under s. 127.067 (1).
AB230,24,1716 3. A grain dealer that claims to be bonded or that claims to have filed security
17with the department for the benefit of producers.
AB230,24,2018 (b) A grain dealer shall file the monthly report under par. (a) with the
19department no later than the 10th day of each month. The report shall include all
20of the following:
AB230,24,2321 1. The total number of bushels of each type of grain, and the total cost of each
22type of grain, that the grain dealer purchased from producers during the previous
23month.
AB230,25,3
12. The total number of bushels of each type of grain purchased from producers
2under a deferred payment contract or deferred price contract for which the grain
3dealer had not paid as of the last day of the previous month.
AB230,25,84 3. The amount that the grain dealer owed producers for each type of grain
5identified under subd. 2. as of the last day of the previous month. The grain dealer
6shall estimate the amount owed for grain purchased under deferred price contracts
7based on the pricing formulas in the contracts and the market prices for grain as of
8the last day of the previous month.
AB230, s. 56 9Section 56. 127.07 of the statutes is repealed and recreated to read:
AB230,25,14 10127.07 Security requirements; warehouse keepers and grain dealers.
11(1)
Warehouse keepers. A warehouse keeper that claims to be bonded or claims to
12have filed security for the benefit of depositors or that does not meet the financial
13standards under s. 127.065 (1) and that is not an exempt warehouse keeper shall file
14with the department, and maintain, security under this section.
AB230,25,16 15(2) Grain dealers. All of the following grain dealers shall file with the
16department, and maintain, security under this section:
AB230,25,1817 (a) Class A grain dealer that does not meet the financial standards under s.
18127.067 (1).
AB230,25,2119 (b) A Class B grain dealer that uses any deferred payment contract or deferred
20price contract to buy grain from producers and that does not meet the financial
21standards under s. 127.067 (1).
AB230,25,2322 (c) A grain dealer that claims to be bonded or that claims to have filed security
23for the benefit of producers.
AB230,26,3
1(3) Form of security. Security filed and maintained under sub. (1) or (2) shall
2comply with the standards promulgated by the department by rule and shall be in
3one of the following forms:
AB230,26,74 (a) A continuous surety bond that is subject to cancellation by the surety
5company only upon 90 days' written notice to the department. Notice of cancellation
6may not affect any liability incurred on the bond within 90 days after notice is served
7on the department.
AB230,26,88 (b) Cash or negotiable securities.
AB230,26,99 (c) Stocks, bonds or other marketable securities at current market value.
AB230,26,1310 (d) An irrevocable bank letter of credit that is issued for an initial period of one
11year and is automatically renewed at the end of each period unless, at least 90 days
12before the scheduled renewal date, the issuing bank gives the department written
13notice that the letter of credit will not be renewed.
AB230,26,1514 (e) Personal surety bonds or other 3rd party guarantees that are fully backed
15by security under par. (b) or (c).
AB230,26,19 16(4) Amount of security; warehouse keepers. A warehouse keeper that is
17required to file and maintain security under sub. (1) shall file and maintain security
18in an amount that is at least 20% of the current market value of all grain that the
19warehouse keeper has in storage for depositors or $25,000, whichever is greater.
AB230,26,23 20(5) Amount of security; grain dealers. (a) Except as provided under par. (b),
21a grain dealer that is required to file and maintain security under sub. (2) shall file
22and maintain security in an amount that is at least equal to the sum of the following,
23increased to the next highest $1,000:
AB230,27,3
11. The total amount that the grain dealer owed to producers under deferred
2payment contracts as of the last day of the previous month or as of another date
3specified by the department.
AB230,27,84 2. The estimated total amount that the grain dealer owed to producers under
5deferred price contracts as of the last day of the previous month or as of another date
6specified by the department. The grain dealer shall estimate the amount owed based
7on the pricing formulas in the contracts and the market prices for grain as of the last
8day of the previous month or as of the date specified by the department.
AB230,27,99 3. One of the following:
AB230,27,1310 a. Before September 1, 1996, an amount equal to 20% of the dollar amount of
11the grain dealer's average monthly purchases from producers for the 3 months in
12which the grain dealer made the largest monthly purchases from producers during
13the preceding 12 months.
AB230,27,1714 b. Beginning on September 1, 1996, an amount equal to 35% of the dollar
15amount of the grain dealer's average monthly purchases from producers for the 3
16months in which the grain dealer made the largest monthly purchases from
17producers during the preceding 12 months.
AB230,27,2518 (b) If a grain dealer has operated as a grain dealer for less than one year, the
19grain dealer shall file and maintain security in an amount specified by the
20department. The department shall specify an amount that is equal to the amount
21that the department projects to be the dollar amount of the grain dealer's monthly
22average grain purchases during the 3 months in which the grain dealer is likely to
23make the largest monthly purchases from producers during the following 12 months,
24multiplied by the percentage under par. (a) 3. or, beginning on September 1, 1996,
25under par. (a) 4.
AB230,28,2
1(6) Demands for security. (a) The department may require a warehouse
2keeper or grain dealer to file security whenever one of the following occurs:
AB230,28,53 1. The warehouse keeper ceases to meet the financial standards under s.
4127.065 (1) or the grain dealer ceases to meet the financial standards under s.
5127.067 (1).
AB230,28,76 2. The department receives notice of cancellation of a surety bond, or notice of
7nonrenewal of a letter of credit, filed with the department as security.
AB230,28,108 3. Security filed with the department falls below the amount required under
9sub. (4) or (5) because of a depreciation in the value of the security or an increase in
10the amount of security required or for any other reason.
AB230,28,1211 4. The warehouse keeper or grain dealer fails to provide information requested
12by the department that is relevant to a determination of security requirements.
AB230,28,1813 (b) If the department requires a warehouse keeper or grain dealer to file
14security with the department under par. (a), the department shall issue a written
15demand for security to the warehouse keeper or grain dealer. The demand shall
16indicate why the security is required, the amount of security required, the basis on
17which the department determined the amount of security required and the deadline
18for filing security.
AB230,28,2119 (c) If a warehouse keeper or grain dealer fails to file security by the deadline
20specified under par. (b), the department may summarily suspend the license of the
21warehouse keeper or grain dealer.
AB230,29,322 (d) If a warehouse keeper or grain dealer fails to file security by the deadline
23specified under par. (b), the warehouse keeper or grain dealer shall, within 5 days
24after the deadline, give notice of its failure to file security to all depositors or
25producers to whom the warehouse keeper or grain dealer is obligated under a grain

1storage contract or a grain purchase contract. If a warehouse keeper or grain dealer
2fails to notify depositors or producers under this paragraph, the department shall
3notify those producers or depositors by publishing a class 3 notice under ch. 985.
AB230,29,6 4(7) Release of security. The department may, upon request, release security
5filed by a warehouse keeper or grain dealer under this section only if one of the
6following occurs:
AB230,29,117 (a) The warehouse keeper or grain dealer achieves and maintains compliance
8with the applicable financial standards under s. 127.065 (1) or 127.067 (1) as
9evidenced by 2 successive annual financial statements or one annual financial
10statement and a reviewed financial statement for the first quarter of the following
11fiscal year.
AB230,29,1412 (b) The warehouse keeper or grain dealer demonstrates to the department's
13satisfaction that the amount of security on file exceeds the amount required under
14sub. (4) or (5).
AB230,29,1615 (c) The warehouse keeper or grain dealer files alternative security of equal
16value.
AB230,29,1917 (d) The warehouse keeper or grain dealer is no longer in business and
18demonstrates to the department's satisfaction that all obligations to producers or
19depositors have been satisfied in full.
AB230, s. 57 20Section 57. 127.09 of the statutes is amended to read:
AB230,30,7 21127.09 (title) Duties of a warehouse keeper. (1) Scale ticket or receipt.
22No warehouse keeper may receive grain from any depositor unless the warehouse
23keeper furnishes the depositor or the depositor's agent with a scale ticket, warehouse
24receipt
or other written evidence of storage receipt or storage at the time the grain
25is received. The document storage receipt shall include the kind, quality and weight

1of grain received, and other terms and conditions under which the grain is received.
2Scale tickets and receipts for grain shall be considered storage receipts unless
3otherwise clearly designated. A warehouse keeper shall keep copies of all scale
4tickets and receipts for at least 6 years or for as long as the scale ticket or receipt
5remains outstanding, whichever is longer. A warehouse keeper shall make copies of
6all scale tickets and receipts available to the department for inspection and copying
7upon request.
AB230,30,14 8(2) Weight; grade; quality. A warehouse keeper shall make accurate
9determinations of
accurately determine the weight of grain through the use of using
10accurate weighing equipment. If determinations are made on the basis of a
11warehouse keeper determines the
grade and or quality of grain, the warehouse
12keeper shall make accurate determinations of accurately determine the grade and
13or quality through the use of using accurate testing and grading and testing
14equipment.
AB230,30,18 15(3) Maintain facilities. A warehouse keeper shall maintain equipment and
16facilities which that are adequate to protect grain from loss or abnormal
17deterioration while in storage and. A warehouse keeper is responsible for the care
18and safekeeping of stored grain while in storage.
AB230,30,21 19(4) Maintain sufficient inventory. A warehouse keeper shall at all times
20maintain grain inventories sufficient in quantity and quality to meet all outstanding
21obligations for grain received from or held in storage for depositors.
AB230,31,2 22(5) Records and accounts. A warehouse keeper shall maintain current,
23complete and accurate records and accounts, including daily position records, of all
24grain received into or withdrawn from the warehouse, including daily position
25records, which will
. The records shall permit the ready determination of total grain

1on hand or in storage, and all obligations relating to grain received into or withdrawn
2from storage.
AB230, s. 58 3Section 58. 127.10 (title), (1) and (2) of the statutes are amended to read:
AB230,31,13 4127.10 (title) Duties of a grain dealers dealer. (1) Documentation. No
5grain dealer may purchase grain from or sell grain for any producer unless the grain
6dealer furnishes the producer or the producer's agent with written documentation
7evidencing the purchase or sales transaction at the time the grain is purchased or
8received for sale. Documentation shall include a record of the kind and weight of
9grain purchased or received for sale, the date of receipt by the grain dealer and, the
10price of the grain or the formula on which the price is to be based and other terms
11of purchase or sale. The A grain dealer shall furnish scale tickets or other
12appropriate receipts to the a producer or the producer's agent whenever immediately
13upon receiving
grain is received from the producer or the producer's agent.
AB230,31,19 14(2) Weight; grade; quality. A grain dealer shall make accurate determinations
15of
accurately determine the weight of grain through the use of using accurate
16weighing equipment. If determinations are made on the basis of a grain dealer
17determines the
grade and or quality of grain, the grain dealer shall make accurate
18determinations of
accurately determine the grade and or quality through the use of
19using accurate testing and grading and testing equipment.
AB230, s. 59 20Section 59. 127.10 (4) of the statutes is amended to read:
AB230,32,221 127.10 (4) Compliance with contracts. A grain dealer buying grain from or
22selling grain for producers shall make payment pay for the grain when payment is
23due under the terms of any the purchase or sale contract or agreement. A forged
24check, check drawn on an account with insufficient funds or other nonnegotiable

1check is not considered payment under the terms of any purchase or sale the contract
2or agreement.
AB230, s. 60 3Section 60. 127.10 (5) of the statutes is renumbered 127.10 (5) (a) and
4amended to read:
AB230,32,135 127.10 (5) (a) A grain dealer who uses any deferred payment or deferred price
6contract shall be in writing. A grain dealer shall furnish the producer with a copy
7of the
written contract at the time the contract is entered into or when the grain
8dealer obtains title to or takes control of the grain, whichever is earliest
within 7 days
9after the grain dealer takes title to the grain covered by the contract
. The contract
10shall state the price of the grain or, in the case of a deferred price contract, the
11formula on by which the price is to be based, terms of the purchase or sale and the
12date on which payment is to be made
will be determined and the deadline by which
13the price will be determined
.
AB230, s. 61 14Section 61. 127.10 (5) (b) of the statutes is created to read:
AB230,32,1815 127.10 (5) (b) A deferred payment contract or deferred price contract shall
16specify the date by which the grain dealer agrees to pay the producer in full. That
17date may not be more than 180 days after the day on which the contract price is
18established.
AB230, s. 62 19Section 62. 127.10 (6) of the statutes is amended to read:
AB230,32,2520 127.10 (6) (title) Permanent business location; business hours. (a) A Each
21Class A grain dealer and, Class B grain dealer and Class B2 grain dealer shall
22maintain a permanent business address at which the grain dealer may be readily
23contacted during business hours. A grain dealer shall provide written notice of the
24dealer's permanent business address shall be provided to every producer from whom
25the grain dealer buys grain or for whom the grain dealer sells grain.
AB230,33,10
1(b) Any grain dealer under par. (a) who purchases grain under a deferred price
2contract shall have business hours that begin at 9:30 a.m. and that continue until
31:30 p.m. each week day.
Each Class A grain dealer, Class B grain dealer and Class
4B2 grain dealer shall keep business hours at the grain dealer's permanent business
5address under par. (a). On each day that the Chicago Board of Trade is open, the
6grain dealer shall be open for business beginning at least one-half hour before the
7opening of the Chicago Board of Trade and continuing until at least one-half hour
8after the closing of the Chicago Board of Trade.
The grain dealer's business hours
9that are required under this paragraph shall be prominently posted at the business
10location
grain dealer's permanent business address under par. (a).
AB230, s. 63 11Section 63. 127.105 of the statutes is amended to read:
AB230,33,18 12127.105 Liability of warehouse keepers and grain dealers. (1) A
13warehouse keeper or grain dealer is liable to a producer or depositor if a subsidiary
14or affiliate of the warehouse keeper or grain dealer fails to pay the producer in full,
15in cash and according to the terms of the contract between the subsidiary or affiliate
16and the producer, amounts owed to the producer by the subsidiary or affiliate
when
17due, or fails to return stored grain to the depositor upon demand, according to a
18contract for the storage, purchase or sale of grain
.
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