(8) Objections to proposed decision; notice, hearing, and final decision. (a) If a contractor or claimant files a timely written objection to the proposed decision under sub. (6), the department shall hold a public hearing on the objection. The department shall follow applicable contested case procedures under ch. 227. The department may hear all objections in a single proceeding. At the conclusion of the contested case proceeding, the department shall issue a final decision affirming or modifying the proposed decision under sub. (6).
(b) The department may issue a final decision under sub. (7) related to default claims that are not affected by objections under par. (a), regardless of whether the department has completed the contested case proceeding under par. (a).
126.71 Paying default claims. (1) Claims against contributing contractor. Except as provided in sub. (2) or (3), the department shall pay from the appropriate sources under s. 126.72 the following default claim amounts:
(a) Except as provided in par. (d) or (e), for each default claim allowed under s. 126.70 against a grain dealer or milk contractor who was a contributing contractor when the default occurred:
1. Eighty percent of the first $60,000 allowed.
2. Seventy-five percent of any amount allowed in excess of $60,000.
(b) For each default claim allowed under s. 126.70 against a grain warehouse keeper who was a contributing contractor when the default occurred, 100% of the first $100,000 allowed.
(c) For each default claim allowed under s. 126.70 against a vegetable contractor who was a contributing contractor when the default occurred:
1. Ninety percent of the first $40,000 allowed.
2. Eighty-five percent of the next $40,000 allowed.
3. Eighty percent of the next $40,000 allowed.
4. Seventy-five percent of any amount allowed in excess of $120,000.
(d) For each default claim allowed under s. 126.70 against a qualified producer agent who, at the time of the default, was a contributing contractor and maintained security under s. 126.47 (3) (c), if the default occurs after April 30, 2002, and before May 1, 2004, 15% of the amount allowed.
(e) For each default claim allowed under s. 126.70 against a qualified producer agent who, at the time of the default, was a contributing contractor and maintained security under s. 126.47 (3) (c), if the default occurs after April 30, 2004, and before May 1, 2007, 20% of the amount allowed.
(1m) When default occurs. For the purposes of this chapter, a default occurs on the date on which payment or delivery becomes overdue.
(2) Claims against contractor who has filed security. If the department allows default claims under s. 126.70 against a contractor who has security on file with the department, the department shall convert that security and use the proceeds as follows:
(a) If the contractor was not a contributing contractor when the default occurred, the department shall use the security proceeds to pay the full amount of the allowed claims, except that, if the security is not adequate to pay the full amount of the allowed claims, the department shall pay claimants on a prorated basis in proportion to their allowed claims.
(b) If the contractor was a contributing contractor when the default occurred, the department shall use the security proceeds to reimburse the sources under s. 126.72 from which the department makes any claim payment under sub. (1). If the security amount exceeds the amount payable under sub. (1) from the sources under s. 126.72, the department shall use the remaining security proceeds to pay the balance of the allowed claims. If the security amount is not adequate to pay the full remaining balance, the department shall pay claimants on a prorated basis in proportion to their allowed claims.
(c) Notwithstanding par. (b), if the contractor was a contributing contractor when the default occurred, the department may, at its discretion, pay claims directly from security proceeds rather than from a fund source under s. 126.72. If the department acts under this paragraph, the department shall first pay claims in the amounts provided in sub. (1). If the security amount exceeds the amount payable under sub. (1) from the sources under s. 126.72, the department shall use the remaining security proceeds to pay the balance of the allowed claims. If the security amount is not adequate to pay the full remaining balance, the department shall pay claimants on a prorated basis in proportion to their allowed claims.
(3) Payment restrictions. (a) The department may not pay any portion of the following from any source identified in s. 126.72:
1. A default claim related to a default by a grain dealer or grain warehouse keeper that occurs before September 1, 2002.
2. A default claim related to a default by a milk contractor that occurs before May 1, 2002.
3. A default claim related to a default by a vegetable contractor that occurs before February 1, 2002.
4. A default claim allowed against a contractor who was not a contributing contractor when the default occurred.
(b) The department may not pay any default claim under this chapter, except as provided in sub. (1) or (2).
(c) If the total amount of default claims exceeds the amount available under s. 126.72, the department shall prorate the available amount among the eligible claimants in proportion to the amount of their allowed claims.
(4) Effect of payment. A claimant who accepts payment under sub. (1) or (2) releases his or her claim against the contractor to the extent of the payment. A payment under sub. (1) or (2) does not prevent a claimant from recovering the balance of an allowed claim directly from the contractor.
126.72 Claims against contributing contractor; payment sources. (1) Producer security fund. From the appropriation under s. 20.115 (1) (w), the department shall make payments authorized under s. 126.71 (1), up to the deductible amount in sub. (4).
(2) Industry bond proceeds. The department shall make a demand against the appropriate industry bond under s. 126.06 and shall use the proceeds of that bond to make payments authorized under s. 126.71 (1), to the extent that those payments exceed the deductible amount in sub. (4).
(3) Blanket bond proceeds. The department shall make a demand against the blanket bond under s. 126.07 and shall use the bond proceeds to pay any remaining amounts authorized under s. 126.71 (1) after the department makes payments under subs. (1) and (2).
(4) Deductible amount. The deductible amount, for purposes of subs. (1) and (2), is as follows:
(a) For default claims against a grain dealer or grain warehouse keeper who was a contributing contractor when the default occurred:
1. If the department allows the claims on or after September 1, 2002, but before September 1, 2004, $500,000.
2. If the department allows the claims on or after September 1, 2004, but before September 1, 2006, $750,000.
3. If the department allows the claims on or after September 1, 2006, $1,000,000.
(b) For default claims against a milk contractor who was a contributing contractor when the default occurred:
1. If the department allows the claims on or after May 1, 2002, but before May 1, 2004, $1,000,000.
2. If the department allows the claims on or after May 1, 2004, but before May 1, 2006, $1,500,000.
3. If the department allows the claims on or after May 1, 2006, $2,000,000.
(c) For claims against a vegetable contractor who was a contributing contractor when the default occurred:
1. If the department allows the claims on or after February 1, 2002, but before February 1, 2004, $500,000.
2. If the department allows the claims on or after February 1, 2004, but before February 1, 2006, $750,000.
3. If the department allows the claims on or after February 1, 2006, $1,000,000.
126.73 Reimbursing payments. (1) Payments from the fund. The department may demand and collect, from a contractor, any claim amounts that the department pays under s. 126.72 (1) because of the contractor's default.
(2) Bond payments. A bond surety may demand and collect, from a contractor, any claim amounts that the bond surety pays to the department under s. 126.72 (2) or (3) because of the contractor's default. The bond surety shall provide the department with a copy of each demand under this subsection.
SUBCHAPTER VIII
ADMINISTRATION AND ENFORCEMENT
126.78 Definitions. In this subchapter:
(1) "Contributing contractor" has the meaning given in s. 126.68 (1).
(2) "Depositor" has the meaning given in s. 126.25 (5).
(3) "Grain dealer" has the meaning given in s. 126.10 (9).
(4) "Grain warehouse keeper" has the meaning given in s. 126.25 (9).
(5) "Milk contractor" has the meaning given in s. 126.40 (8).
(6) "Producer agent" means a person who is a producer agent, as defined in s. 126.10 (13), 126.40 (13), or 126.55 (12).
(7) "Vegetable contractor" has the meaning given in s. 126.55 (14).
(8) "Vegetable producer" has the meaning given in s. 126.55 (16).
126.80 Department authority; general. The department shall administer this chapter.
126.81 Rule-making. The department may promulgate rules to do any of the following:
(1) Interpret and implement this chapter.
(2) Modify the license fees and surcharges provided in s. 126.11 (4), 126.26 (3), 126.41 (3), 126.42, or 126.56 (4).
(3) Modify the fund assessments provided under s. 126.15, 126.30, 126.46, or 126.60, as provided in s. 126.88.
(4) Require a contractor to notify producers and producer agents of the contractor's license, security, or fund contribution status under this chapter.
126.82 Investigations. The department may conduct investigations that it considers necessary for the administration of this chapter, including investigations to determine any of the following:
(1) Whether a contractor complies with this chapter.
(2) Whether a contractor is able to honor contract obligations when due.
(3) Whether a contractor has failed to honor contract obligations when due.
(4) Whether a grain warehouse keeper has sufficient grain on hand to meet the grain warehouse keeper's obligations to depositors.
(5) The nature and amount of a contractor's storage obligations or other contract obligations.
126.83 Information. The department may require a contractor to provide information that is relevant to the administration and enforcement of this chapter.
126.84 Records; confidentiality. (1) Public records exemption. The following records obtained by the department under this chapter are not open to public inspection under s. 19.35:
(a) Contractor financial statements.
(b) A contractor's purchase, storage, or procurement records.
(2) Use of records in court or administrative proceedings. Notwithstanding sub. (1), the department may introduce any information obtained under this chapter in a court proceeding or administrative contested case, subject to any protective order that the court or administrative tribunal determines to be appropriate.
126.85 Remedial orders. (1) General. The department may, by special order, require a contractor to remedy a violation of this chapter or a rule promulgated under this chapter. The department may order the contractor to take specific remedial actions, including actions to remedy deficiencies or to prevent losses to persons protected under this chapter. Except as provided in sub. (2), the department shall give the contractor notice and an opportunity for hearing before the department issues an order.
(2) Summary order. The department may issue an order under sub. (1) without prior notice or hearing if the department finds that the order is necessary to prevent a clear and imminent threat of harm to persons protected under this chapter. Conditions indicating a clear and imminent threat of harm include the following:
(a) A contractor fails to pay producers according to this chapter or according to the contractor's contracts with producers.
(b) A contractor fails to file replacement insurance within the time required under this chapter.
(c) A contractor fails to file security according to this chapter, or in response to the department's demand under this chapter.
(d) A contractor fails to pay a fund assessment when due.
(e) A vegetable contractor fails to pay vegetable producers by January 31 for vegetables delivered by December 31 of the previous year, except as authorized in a deferred payment contract.
(f) A grain warehouse keeper fails to return grain to depositors upon demand, as required under s. 126.34 (4).
(g) A grain warehouse keeper fails to maintain adequate grain inventory as required under s. 126.34 (3), and at least one of the following applies:
1. The amount of the deficiency exceeds 10,000 bushels or 10% of the grain warehouse keeper's obligations to depositors, whichever amount is less.
2. The grain warehouse keeper fails to correct the deficiency within 15 days after receiving the department's written notice that a deficiency exists.
(3) Hearing on summary order. (a) A contractor named in a summary order under sub. (2) may, within 10 days after receiving the order, request a hearing on the order. The department shall hold an informal hearing as soon as possible after receiving a hearing request, but not later than 10 days after receiving the hearing request, unless the contractor waives the informal hearing or agrees to hold it at a later date. If the matter is not resolved at the informal hearing, the department shall hold a contested case hearing under ch. 227 as soon as reasonably possible.
(b) A hearing request under par. (a) does not automatically stay a summary order. The department may stay a summary order pending hearing.
126.86 License actions. (1) General. The department may for cause deny, suspend, revoke, or impose conditions on a contractor's license, as provided in s. 93.06 (7) and (8). Cause may include any of the following:
(a) The contractor fails to comply with this chapter or a rule promulgated under this chapter.
(b) The contractor fails to comply with an order that the department issues under this chapter.
(c) The contractor fails to provide relevant information that the department requests under this chapter or falsifies information provided to the department.