LRB-0347/1
RCT:kmg:km
1995 - 1996 LEGISLATURE
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
1An Act to repeal 100.03 (1) (n), 100.03 (1)
(zp), 100.03 (8) (b) 6. and 100.03 (8)
2(bm);
to renumber and amend 100.03 (1) (e);
to amend 20.115 (1) (gm), 97.29
3(4), 100.03 (title), 100.03 (1) (a) (intro.), 100.03 (1) (f), 100.03 (1) (v) to (wm),
4100.03 (1) (zm), 100.03 (2) (a), 100.03 (3) (a) 2., 100.03 (3) (b), 100.03 (4) (a),
5100.03 (4) (c), 100.03 (4) (f), 100.03 (5) (a) 2., 100.03 (5) (b), 100.03 (5) (c), 100.03
6(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(7) (c) (intro.), 100.03 (7) (c) 1., 100.03 (15) (title), 100.03 (15) (a) (intro.), 100.03
8(15) (c), 100.03 (18) and 100.03 (19) (a) (intro.);
to repeal and recreate 100.03
9(7) (a) 2.; and
to create 100.03 (1) (ym), 100.03 (1) (zs), 100.03 (5) (am), 100.03
10(7) (a) 3. and 100.03 (8) (cm) of the statutes;
relating to: fruit and vegetable
11producer 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
1Section
1. 20.115 (1) (gm) of the statutes is amended to read:
AB630,3,22
20.115
(1) (gm) (title)
Dairy trade regulation; dairy and farm product and
3vegetable producer security. The amounts in the schedule for the regulation of
farm
4product vegetable procurement under s. 100.03, of dairy plant financial condition
5under s. 100.06 and of dairy trade practices under s. 100.201. All moneys received
6under ss. 100.03 (3) (a) 3., 100.06 (9) and 100.201 (6) shall be credited to this
7appropriation, but any balance at the close of a fiscal biennium that exceeds 20% of
1the previous fiscal year's expenditures under this appropriation shall lapse to the
2general fund.
AB630, s. 2
3Section
2. 97.29 (4) of the statutes is amended to read:
AB630,3,124
97.29
(4) (title)
Food processing plants buying farm products vegetables
5from producers. The department may not issue or renew a license to operate a food
6processing plant to any applicant who is a contractor, as defined in s. 100.03 (1) (f),
7unless the applicant has filed all financial information and any security that is
8required under s. 100.03. If an applicant has not filed all financial information and
9any security that is required under s. 100.03, the department may issue a conditional
10license under s. 93.06 (8) that prohibits the licensed operator from procuring
farm
11products vegetables from a producer or a producer's agent, but allows the operator
12to procure
farm products vegetables from other sources.
AB630, s. 3
13Section
3. 100.03 (title) of the statutes is amended to read:
AB630,3,15
14100.03 (title)
Farm product
Vegetable procurement; financial security;
15grading and tare.
AB630, s. 4
16Section
4. 100.03 (1) (a) (intro.) of the statutes is amended to read:
AB630,3,1817
100.03
(1) (a) (intro.) "Affiliate" means any of the following persons or business
18entities that procures
farm products vegetables for use by an operator:
AB630, s. 5
19Section
5. 100.03 (1) (e) of the statutes is renumbered 100.03 (1) (bm) and
20amended to read:
AB630,4,221
100.03
(1) (bm) "
Certified Audited financial statement" means a financial
22statement that, in the accompanying opinion of an independent certified public
23accountant or a public accountant holding a certificate of authority under ch. 442,
24fairly and in all material respects represents the financial position of the contractor,
1the results of the contractor's operations and the contractor's cash flows in
2conformity with generally accepted accounting principles.
AB630, s. 6
3Section
6. 100.03 (1) (f) of the statutes is amended to read:
AB630,4,84
100.03
(1) (f) "Contractor" means a person who buys
farm products vegetables 5grown in this state from a producer, or who contracts with a producer to grow
farm
6products vegetables in this state, regardless of whether the contractor is located in
7this state or is engaged in food processing. "Contractor" does not include any of the
8following:
AB630,4,119
1. A person who procures
fruits and vegetables primarily for unprocessed fresh
10market use and is licensed under the federal perishable agricultural commodities
11act,
7 USC 499.
AB630,4,1312
2. A restaurant or retail food establishment that procures
farm products 13vegetables solely for retail sale at the restaurant or retail food establishment.
AB630, s. 7
14Section
7. 100.03 (1) (n) of the statutes is repealed.
AB630, s. 8
15Section
8. 100.03 (1) (v) to (wm) of the statutes are amended to read:
AB630,4,1916
100.03
(1) (v) "Payment on delivery" means cash payment of the full agreed
17price for a
farm product vegetable when the
farm product vegetable is tendered or
18delivered to a contractor, or cash payment of the full agreed price within 72 hours
19after delivery if the
farm product vegetable is graded.
AB630,4,2320
(vm) "Procurement contract" means an oral or written agreement between a
21contractor and a producer, under which the contractor buys a
farm product vegetable 22grown in this state from the producer or contracts with the producer to grow a
farm
23product vegetable in this state.
AB630,4,2524
(w) "Producer" means a person who produces and sells a
farm product 25vegetable, or who grows a
farm product vegetable under contract.
AB630,5,2
1(wm) "Producer claim" means a claim held by a producer for his or her
farm
2products vegetables.
AB630, s. 9
3Section
9. 100.03 (1) (ym) of the statutes is created to read:
AB630,5,54
100.03
(1) (ym) "Reviewed financial statement" means a financial statement,
5other than an audited financial statement, that is all of the following:
AB630,5,66
1. Sworn and notarized by the contractor.
AB630,5,97
2. Reviewed according to generally accepted accounting principles by an
8independent certified public accountant or a public accountant holding a certificate
9of authority under ch. 442.
AB630, s. 10
10Section
10. 100.03 (1) (zm) of the statutes is amended to read:
AB630,5,1311
100.03
(1) (zm) "Subsidiary" means a corporation or business entity that is
12owned, controlled or operated by an operator, and that procures a
farm product 13vegetable for use by the operator.
AB630, s. 11
14Section
11. 100.03 (1)
(zp) of the statutes is repealed.
AB630, s. 12
15Section
12. 100.03 (1) (zs) of the statutes is created to read:
AB630,5,1816
100.03
(1) (zs) "Vegetable" means any vegetable that is grown or sold for use
17in food processing, whether or not that vegetable is actually processed as food.
18"Vegetable" includes sweet corn, but does not include grain.
AB630, s. 13
19Section
13. 100.03 (2) (a) of the statutes is amended to read:
AB630,5,2320
100.03
(2) (a)
Requirement. No contractor may enter into a procurement
21contract with a producer unless the contractor holds a registration certificate from
22the department. A registration certificate expires on
March January 31 annually
23and is not transferable.
AB630, s. 14
24Section
14. 100.03 (3) (a) 2. of the statutes is amended to read:
AB630,6,5
1100.03
(3) (a) 2. Unless the department by rule establishes a different fee, a fee
2of one cent for each $100 in the total contractual obligations reported under sub. (4)
3(a). The fee under this subdivision is not required if all
farm product vegetable 4grading is performed or supervised by the department under contract with the
5contractor.
AB630, s. 15
6Section
15. 100.03 (3) (b) of the statutes is amended to read:
AB630,6,147
100.03
(3) (b)
Surcharge for operating without a registration certificate. A
8contractor who applies for a registration certificate under sub. (2) shall pay a
9surcharge of $500 if the department determines that, within 365 days before
10submitting the application, the contractor procured a
farm product vegetable from
11a producer without a registration certificate in violation of sub. (2). Payment of the
12surcharge does not relieve the contractor of any other civil or criminal liability that
13results from the procurement of the
farm product
vegetable, but it does not constitute
14evidence of any law violation.
AB630, s. 16
15Section
16. 100.03 (4) (a) of the statutes is amended to read:
AB630,6,1916
100.03
(4) (a) The contractor's total paid and unpaid contractual obligations to
17producers, for
farm products vegetables tendered or delivered, that have accrued
18during the registration year immediately preceding the registration year for which
19application is made.
AB630, s. 17
20Section
17. 100.03 (4) (c) of the statutes is amended to read:
AB630,7,521
100.03
(4) (c) The contractor's anticipated maximum liability to producers
22during the registration year for which application is made. The application shall
23state if the contractor anticipates a maximum liability of zero. If so, the application
24also shall state whether the contractor anticipates a maximum liability of zero
25because the contractor plans to make cash payment on delivery under every
1procurement contract, or because the contractor plans to procure all
farm products 2vegetables from another contractor. A contractor shall immediately notify the
3department in writing if, at any time during the registration year, the contractor has
4reason to believe that the contractor's maximum liability will exceed the maximum
5liability previously anticipated and reported to the department.
AB630, s. 18
6Section
18. 100.03 (4) (f) of the statutes is amended to read:
AB630,7,107
100.03
(4) (f) Whether the contractor is a producer-owned cooperative or
8organization doing business on a cooperative pooling basis with its producer owners,
9and whether the producer-owned cooperative or organization procures any
farm
10products vegetables from producers who are not its producer owners.
AB630, s. 19
11Section
19. 100.03 (5) (a) 2. of the statutes is amended to read:
AB630,7,1712
100.03
(5) (a) 2. Except as provided under par. (c), a contractor shall file an
13annual financial statement with the department as a condition to the renewal or
14continuation of the contractor's registration certificate under sub. (2). An annual
15financial statement shall be filed by the 15th day of the 4th month commencing after
16the close of the contractor's fiscal year
, except that the department may, for cause,
17extend the deadline for filing the annual financial statement for up to 30 days.
AB630, s. 20
18Section
20. 100.03 (5) (am) of the statutes is created to read:
AB630,7,2119
100.03
(5) (am)
Interim statement. Except as provided in par. (c), a contractor
20shall file a interim statement as of the quarter that ends closest to November 30 with
21each application for renewal.
AB630, s. 21
22Section
21. 100.03 (5) (b) of the statutes is amended to read:
AB630,8,223
100.03
(5) (b) (title)
Additional or interim financial statement.
24Notwithstanding par. (c), the department may require a contractor to file
a an
25annual financial statement or interim statement at any time.
The department may
1require that a financial statement required under this paragraph be an audited
2financial statement or a reviewed financial statement.
AB630, s. 22
3Section
22. 100.03 (5) (c) of the statutes is amended to read:
AB630,8,54
100.03
(5) (c)
Exemptions. Paragraph (a) does Paragraphs (a) and (am) do not
5apply to any of the following: