SB430: Bill Text

LRB-3796/1

RCT:kmg:km

1995 - 1996 LEGISLATURE

1995 Senate BILL 430

November 16, 1995 - Introduced by Senators A. Lasee and Fitzgerald, cosponsored by Representatives Ott, Seratti, Gard and Grothman. Referred to Committee on Transportation, Agriculture and Local Affairs.

SB430,1,7 An Act to repeal 100.03 (1) (n); 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 (3) (a) 2., 100.03 (3) (b), 100.03 (4) (a), 100.03 (4) (c), 100.03 (4) (f), 100.03 (5) (c) 1. and 3., 100.03 (6) (b) 1., 100.03 (6) (b) 3., 100.03 (6) (b) 4., 100.03 (7) (c) 1., 100.03 (8) (b) 6., 100.03 (8) (bm) 1. a., 100.03 (15) (title), 100.03 (15) (a) (intro.), 100.03 (15) (c), 100.03 (18) and 100.03 (19) (a) (intro.); and to create 100.03 (1) (zs) of the statutes; relating to: fruit producer security.

Analysis by the Legislative Reference Bureau

Under current law, the department of agriculture, trade and consumer protection (DATCP) administers a program 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. The fruit and vegetable producer security program includes requirements concerning registration with DATCP, filing financial statements and providing security or meeting minimum financial standards.

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

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:

SB430, s. 1 Section 1. 20.115 (1) (gm) of the statutes is amended to read:

SB430,2,9 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.

SB430, s. 2 Section 2. 97.29 (4) of the statutes is amended to read:

SB430,2,19 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.

SB430, s. 3 Section 3. 100.03 (title) of the statutes is amended to read:

SB430,2,22 100.03 (title) Farm product Vegetable procurement; financial security; grading and tare.

SB430, s. 4 Section 4. 100.03 (1) (a) (intro.) of the statutes is amended to read:

SB430,2,25 100.03 (1) (a) (intro.) "Affiliate" means any of the following persons or business entities that procures farm products vegetables for use by an operator:

SB430, s. 5 Section 5. 100.03 (1) (f) of the statutes is amended to read:

SB430,3,6 100.03 (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:

SB430,3,9 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.

SB430,3,11 2. A restaurant or retail food establishment that procures farm products vegetables solely for retail sale at the restaurant or retail food establishment.

SB430, s. 6 Section 6. 100.03 (1) (n) of the statutes is repealed.

SB430, s. 7 Section 7. 100.03 (1) (v) to (wm) of the statutes are amended to read:

SB430,3,17 100.03 (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.

SB430,3,21 (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.

SB430,3,23 (w) "Producer" means a person who produces and sells a farm product vegetable, or who grows a farm product vegetable under contract.

SB430,3,25 (wm) "Producer claim" means a claim held by a producer for his or her farm products vegetables.

SB430, s. 8 Section 8. 100.03 (1) (zm) of the statutes is amended to read:

SB430,4,4 100.03 (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.

SB430, s. 9 Section 9. 100.03 (1) (zs) of the statutes is created to read:

SB430,4,8 100.03 (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.

SB430, s. 10 Section 10. 100.03 (3) (a) 2. of the statutes is amended to read:

SB430,4,14 100.03 (3) (a) 2. Unless the department by rule establishes a different fee, a fee of one cent for each $100 in the total contractual obligations reported under sub. (4) (a). The fee under this subdivision is not required if all farm product vegetable grading is performed or supervised by the department under contract with the contractor.

SB430, s. 11 Section 11. 100.03 (3) (b) of the statutes is amended to read:

SB430,4,23 100.03 (3) (b) Surcharge for operating without a registration certificate. A contractor who applies for a registration certificate under sub. (2) shall pay a surcharge of $500 if the department determines that, within 365 days before submitting the application, the contractor procured a farm product vegetable from a producer without a registration certificate in violation of sub. (2). Payment of the surcharge does not relieve the contractor of any other civil or criminal liability that results from the procurement of the farm product vegetable, but it does not constitute evidence of any law violation.

SB430, s. 12 Section 12. 100.03 (4) (a) of the statutes is amended to read:

SB430,5,4 100.03 (4) (a) The contractor's total paid and unpaid contractual obligations to producers, for farm products vegetables tendered or delivered, that have accrued during the registration year immediately preceding the registration year for which application is made.

SB430, s. 13 Section 13. 100.03 (4) (c) of the statutes is amended to read:

SB430,5,15 100.03 (4) (c) The contractor's anticipated maximum liability to producers during the registration year for which application is made. The application shall state if the contractor anticipates a maximum liability of zero. If so, the application also shall state whether the contractor anticipates a maximum liability of zero because the contractor plans to make cash payment on delivery under every procurement contract, or because the contractor plans to procure all farm products vegetables from another contractor. A contractor shall immediately notify the department in writing if, at any time during the registration year, the contractor has reason to believe that the contractor's maximum liability will exceed the maximum liability previously anticipated and reported to the department.

SB430, s. 14 Section 14. 100.03 (4) (f) of the statutes is amended to read:

SB430,5,20 100.03 (4) (f) Whether the contractor is a producer-owned cooperative or organization doing business on a cooperative pooling basis with its producer owners, and whether the producer-owned cooperative or organization procures any farm products vegetables from producers who are not its producer owners.

SB430, s. 15 Section 15. 100.03 (5) (c) 1. and 3. of the statutes are amended to read:

SB430,5,25 100.03 (5) (c) 1. A contractor who either plans to make payment on delivery for all farm products vegetables tendered or delivered by producers, or to procure all farm products vegetables from another contractor, and who submits a sworn and notarized statement to that effect under sub. (4) (c).

SB430,6,3 3. A producer-owned cooperative or organization that procures farm products vegetables solely on a cooperative pooling basis from its producer owners, and that submits under sub. (4) a sworn and notarized statement to that effect.

SB430, s. 16 Section 16. 100.03 (6) (b) 1. of the statutes is amended to read:

SB430,6,9 100.03 (6) (b) 1. If a procurement contract does not specify a payment date in writing, the contractor shall pay a liability to a producer by the 15th day of the month immediately following the month in which the producer tendered or delivered the farm products vegetables under the contract, or by an earlier date agreed upon between the parties.

SB430, s. 17 Section 17. 100.03 (6) (b) 3. of the statutes is amended to read:

SB430,6,24 100.03 (6) (b) 3. By January 31 of each registration year, a contractor shall pay for all farm products vegetables that were delivered by producers on or before December 31 of that registration year. This requirement does not apply if a written contract specifying a later payment date was approved by a vote of producers who delivered farm products vegetables to the contractor during the preceding registration year. To obtain the approval of producers, a contractor shall give advance written notice to every eligible producer. The notice shall include a copy of the proposed contract and shall announce a meeting at which producers will be asked to vote on the proposed contract. The notice shall also include a mail ballot by which a producer may cast his or her vote without attending the meeting. Voting shall be by secret ballot. The proposed contract shall be approved by a majority of the producers who vote on the proposed contract. The contractor shall file a sworn statement with the department, on a form provided by the department, certifying the results of the balloting.

SB430, s. 18 Section 18. 100.03 (6) (b) 4. of the statutes is amended to read:

SB430,7,5 100.03 (6) (b) 4. If a producer tenders or delivers farm products vegetables to a contractor after December 31 of any registration year, the contractor shall pay the producer for the farm products vegetables by the 15th day of the month following the month in which the farm products vegetables were tendered or delivered, or within 30 days after tender or delivery.

SB430, s. 19 Section 19. 100.03 (7) (c) 1. of the statutes is amended to read:

SB430,7,8 100.03 (7) (c) 1. The contractor makes payment on delivery for all farm products vegetables obtained from producers.

SB430, s. 20 Section 20. 100.03 (8) (b) 6. of the statutes is amended to read:

SB430,7,13 100.03 (8) (b) 6. If the contractor is an operator, a food processing plant trusteeship under which processed farm products vegetables equivalent to not less than 30% of the raw farm products vegetables received from producers are set aside in trust for the producers.

SB430, s. 21 Section 21. 100.03 (8) (bm) 1. a. of the statutes is amended to read:

SB430,7,20 100.03 (8) (bm) 1. a. Provide that no portion of the set-aside products inventory may be released from trust unless an amount equivalent to the value of the released products inventory has been paid to producers or to the trustee for payment to producers. Payments under this subd. 1. a. shall be made to all producers to whom liabilities are owed, in proportionate amounts based on the size of the liability to each producer.

SB430, s. 22 Section 22. 100.03 (15) (title) of the statutes is amended to read:

SB430,7,22 100.03 (15) (title) Farm product Vegetable grading and tare.

SB430, s. 23 Section 23. 100.03 (15) (a) (intro.) of the statutes is amended to read:

SB430,8,2 100.03 (15) (a) Grading procedures and grade standards. (intro.) If under a procurement contract the amount received by the producer depends on the grade of the farm products vegetables, the farm products vegetables shall be graded in compliance with all of the following:

SB430, s. 24 Section 24. 100.03 (15) (c) of the statutes is amended to read:

SB430,8,5 100.03 (15) (c) Price-fixing not permitted. This subsection does not fix or regulate the price paid for any farm product vegetable.

SB430, s. 25 Section 25. 100.03 (18) of the statutes is amended to read:

SB430,8,16 100.03 (18) Summary order requiring payment on delivery. If the department has reasonable grounds to believe that a contractor does not meet the minimum financial standards under sub. (7), and does not have adequate security on file under sub. (8), the department may issue a summary special order requiring the contractor to make payment on delivery for all farm products vegetables. A summary special order shall set forth the specific basis for the order. The order shall remain in effect until the contractor meets the financial standards under sub. (7) or files adequate security under sub. (8). A person adversely affected by a special order under this section shall be given a prompt hearing before the department upon request, under ch. 227.

SB430, s. 26 Section 26. 100.03 (19) (a) (intro.) of the statutes is amended to read:

SB430,8,22 100.03 (19) (a) Grounds. (intro.) The department may summarily suspend the contractor's registration certificate when necessary to prevent clear and imminent harm to producers if the department has reasonable grounds to believe that a contractor has failed to make payment on delivery for farm products vegetables, procured from producers, contrary to any of the following:

SB430,8,23 (End)