Amendment AA1-ASA1-SB55

SB55-ASA1-AA1,934,14 1. The vegetable contractor's existing security falls below the amount required under sub. (3) for any reason, including a depreciation in the value of the security filed with the department, increased obligations to vegetable producers or producer agents, or the cancellation of any security filed with the department.

SB55-ASA1-AA1,934,16 2. The vegetable contractor fails to provide required information that is relevant to a determination of security requirements.

SB55-ASA1-AA1,934,21 (b) The department shall issue a demand under par. (a) in writing. The department shall indicate why additional security is required, the amount of security required, and the deadline date for filing security. The department may not specify a deadline for filing security that is more than 30 days after the date on which the department issues its demand for security.

SB55-ASA1-AA1,934,24 (c) A vegetable contractor may request a hearing, under ch. 227, on a security demand under par. (b). A request for hearing does not automatically stay a security demand.

SB55-ASA1-AA1,935,9 (d) If a vegetable contractor fails to comply with the department's security demand under this subsection, the vegetable contractor shall give written notice of that fact to all vegetable producers and producer agents from whom the vegetable contractor procures processing vegetables. If the vegetable contractor fails to give accurate notice under this paragraph within 5 days after the security filing deadline under par. (b) has passed, the department shall promptly notify vegetable producers and producer agents by publishing a class 3 notice under ch. 985. The department may also give individual notice to vegetable producers or producer agents of whom the department is aware.

SB55-ASA1-AA1,935,11 (e) If a vegetable contractor fails to comply with the department's demand for security under this subsection, the department may do any of the following:

SB55-ASA1-AA1,935,15 1. Issue a summary order under s. 126.85 (2) that prohibits the vegetable contractor from procuring processing vegetables from vegetable producers or producer agents, or requires the vegetable contractor to pay cash on delivery under all vegetable procurement contracts.

SB55-ASA1-AA1,935,16 2. Suspend or revoke the vegetable contractor's license.

SB55-ASA1-AA1,935,20 (7) Releasing security. (a) The department may release security filed under sub. (1) (a), except for any amount of security that the vegetable contractor is required to file because sub. (1) (b) applies to the vegetable contractor, if any of the following applies:

SB55-ASA1-AA1,935,25 1. The vegetable contractor reports less than $1,000,000 in annual contract obligations under s. 126.56 (9) (a) for at least 2 consecutive years and the vegetable contractor pays the quarterly fund assessment that would have been required of the vegetable contractor if the vegetable contractor had been a contributing vegetable contractor on the most recent quarterly installment date under s. 126.60 (6).

SB55-ASA1-AA1,936,5 2. The vegetable contractor's annual financial statement under s. 126.58 shows positive equity for at least 2 consecutive years and the vegetable contractor pays the quarterly fund assessment that would have been required of the vegetable contractor if the vegetable contractor had been a contributing vegetable contractor on the most recent quarterly installment date under s. 126.60 (6).

SB55-ASA1-AA1,936,8 (b) The department may release security filed under sub. (1) (b), except for any amount of security that the vegetable contractor is required to file because sub. (1) (a) applies to the vegetable contractor, if any of the following applies:

SB55-ASA1-AA1,936,10 1. The vegetable contractor has no unpaid obligations under deferred payment contracts, and will not use deferred payment contracts in the current license year.

SB55-ASA1-AA1,936,13 2. The vegetable contractor files 2 consecutive annual financial statements under s. 126.58 that show a current ratio of at least 1.25 to 1.0, positive equity, and a debt to equity ratio of not more than 4.0 to 1.0.

SB55-ASA1-AA1,936,15 (c) On May 1, 2002, the department may release security maintained under sub. (2), unless the vegetable contractor is required to file security under sub. (1).

SB55-ASA1-AA1,936,17 (d) The department may release security to the extent that the security exceeds the amount required under sub. (3).

SB55-ASA1-AA1,936,19 (e) The department may release security if the vegetable contractor files alternative security, of equivalent value, that the department approves.

SB55-ASA1-AA1,936,21 (f) The department shall release security if the vegetable contractor has gone out of business and paid all contract obligations in full.

SB55-ASA1-AA1,936,23 126.62 Vegetable contractors; records. (1) Records required. A vegetable contractor shall keep all of the following:

SB55-ASA1-AA1,936,24 (a) Copies of all written vegetable procurement contracts.

SB55-ASA1-AA1,937,2 (b) A current record of all vegetable contract obligations, payments, and unpaid balances.

SB55-ASA1-AA1,937,4 (2) Records retention. A vegetable contractor shall keep all of the following records for at least 6 years from the date of their creation:

SB55-ASA1-AA1,937,5 1. Records required under sub. (1).

SB55-ASA1-AA1,937,7 2. Records that the vegetable contractor was required to keep, under s. 100.03, 1999 stats., and department rules, before February 1, 2002.

SB55-ASA1-AA1,937,10 (3) Records inspection. A vegetable contractor shall make records required under this section available to the department for inspection and copying upon request.

SB55-ASA1-AA1,937,14 126.63 Vegetable contractors; business practices. (1) Vegetable grading and tare. (a) A vegetable contractor shall grade vegetables according to the following standards if the vegetable grade may affect the amount received by the vegetable producer:

SB55-ASA1-AA1,937,15 1. Standard grading procedures that the department establishes by rule.

SB55-ASA1-AA1,937,17 2. Uniform grade standards that the department establishes by rule, unless the vegetable procurement contract clearly specifies alternative grade standards.

SB55-ASA1-AA1,937,20 (b) If a vegetable contractor makes any deduction for tare, the vegetable contractor shall determine tare according to procedures that the department establishes by rule.

SB55-ASA1-AA1,937,23 (c) The department shall establish grade standards for vegetables that conform to grade standards adopted by the federal department of agriculture under 7 USC 1621 to 1632.

SB55-ASA1-AA1,938,2 (2) Prohibited deductions. No vegetable purchaser may deduct, from the amount payable under a vegetable procurement contract, an amount designated for the payment of any vegetable contractor license fee, surcharge, or fund assessment under this subchapter.

SB55-ASA1-AA1,938,6 (3) Timely payment. A vegetable contractor shall pay a vegetable producer or producer agent according to the vegetable procurement contract. The vegetable contractor shall make the following payments by the following dates, unless the contract specifies a different payment date in writing:

SB55-ASA1-AA1,938,9 (a) The 15th day of the month immediately following the month in which the vegetable contractor harvests or accepts delivery of processing vegetables, the full amount owed under the contract for those vegetables.

SB55-ASA1-AA1,938,13 (b) The 15th day of the month immediately following the month in which the vegetable contractor rejects or fails to harvest processing vegetables tendered under the vegetable procurement contract, the full amount owed under the contract for those vegetables.

SB55-ASA1-AA1,938,16 (4) Annual payment deadline. (a) Except as provided in par. (b) or (c), a vegetable contractor shall pay all outstanding obligations to vegetable producers by January 31 of each license year.

SB55-ASA1-AA1,938,20 (b) For processing vegetables tendered or delivered in January of any license year, a vegetable contractor shall pay the full amount owed under the vegetable procurement contract by February 15 or by the 30th day after the date of delivery, whichever date is later.

SB55-ASA1-AA1,938,24 (c) A vegetable contractor may pay outstanding producer obligations in accordance with a deferred payment contract that complies with sub. (5) and specifies a payment date after January 31 for processing vegetables delivered on or before December 31.

SB55-ASA1-AA1,939,5 (5) Deferred payment contract. (a) Before a vegetable contractor offers a deferred payment contract to any vegetable producer, the vegetable contractor shall put the deferred payment contract to a vote of vegetable producers, as provided in par. (b), obtain the approval of a majority of the voting vegetable producers, and comply with par. (c).

SB55-ASA1-AA1,939,13 (b) To put a deferred payment contract to a vote of vegetable producers, the vegetable contractor shall give written notice to all vegetable producers in this state from whom the vegetable contractor procured the same type of processing vegetables during the preceding license year. In the notice, the vegetable contractor shall include a copy of the proposed contract, shall announce a meeting at which the vegetable producers will be asked to vote on the proposed contract, and shall include a mail ballot by which a vegetable producer may vote without attending the meeting. The vegetable contractor shall conduct the voting by secret ballot.

SB55-ASA1-AA1,939,15 (c) To comply with this paragraph, a vegetable contractor shall file all of the following with the department:

SB55-ASA1-AA1,939,17 1. A sworn statement certifying that the contract was approved in a vote of vegetable producers under this subsection.

SB55-ASA1-AA1,939,18 2. Any additional security required under s. 126.61 (3).

SB55-ASA1-AA1,939,20 (6) Cash on delivery. A vegetable contractor shall pay cash on delivery under all vegetable procurement contracts if any of the following applies:

SB55-ASA1-AA1,939,23 (a) The vegetable contractor stated, in the vegetable contractor's last annual statement under s. 126.56 (9) (g), that the vegetable contractor would pay cash on delivery.

SB55-ASA1-AA1,940,3 (b) The department disqualifies the vegetable contractor, under s. 126.59 (2) (c), or requires the vegetable contractor to pay cash on delivery under s. 126.61 (6) (e).

SB55-ASA1-AA1,940,5 126.64 Vegetable contractors; prohibited practices. No vegetable contractor may do any of the following:

SB55-ASA1-AA1,940,7 (1) Misrepresent the weight, grade, or quality of processing vegetables under a vegetable procurement contract.

SB55-ASA1-AA1,940,9 (2) Falsify any record or account, or conspire with any other person to falsify a record or account.

SB55-ASA1-AA1,940,10 (3) Make any false or misleading representation to the department.

SB55-ASA1-AA1,940,13 (4) If the vegetable contractor is licensed under s. 126.56, engage in any activity that is inconsistent with representations made in the vegetable contractor's annual license application.

SB55-ASA1-AA1,940,15 (5) Make any false or misleading representation to a vegetable producer or producer agent related to matters regulated under this chapter.

SB55-ASA1-AA1,940,17 (6) Fail to file the full amount of security required under s. 126.61 (6) by the date that the department specifies.

SB55-ASA1-AA1,940,19 SUBCHAPTER VII RECOVERY PROCEEDINGS

SB55-ASA1-AA1,940,20 126.68 Definitions. In this subchapter:

SB55-ASA1-AA1,940,21 (1) "Contributing contractor" means any of the following:

SB55-ASA1-AA1,940,22 (a) A contributing grain dealer, as defined in s. 126.10 (3).

SB55-ASA1-AA1,940,23 (b) A contributing grain warehouse keeper, as defined in s. 126.25 (2).

SB55-ASA1-AA1,940,24 (c) A contributing milk contractor, as defined in s. 126.40 (1).

SB55-ASA1-AA1,940,25 (d) A contributing vegetable contractor, as defined in s. 126.55 (4).

SB55-ASA1-AA1,941,1 (2) "Depositor" has the meaning given in s. 126.25 (5).

SB55-ASA1-AA1,941,2 (3) "Grain dealer" has the meaning given in s. 126.10 (9).

SB55-ASA1-AA1,941,3 (4) "Grain producer" has the meaning given in s. 126.10 (10).

SB55-ASA1-AA1,941,4 (5) "Grain warehouse keeper" has the meaning given in s. 126.25 (9).

SB55-ASA1-AA1,941,5 (6) "Milk contractor" has the meaning given in s. 126.40 (8).

SB55-ASA1-AA1,941,6 (7) "Milk producer" has the meaning given in s. 126.40 (10).

SB55-ASA1-AA1,941,7 (8) "Producer grain" has the meaning given in s. 126.10 (14).

SB55-ASA1-AA1,941,8 (9) "Producer milk" has the meaning given s. 126.40 (14).

SB55-ASA1-AA1,941,9 (10) "Vegetable contractor" has the meaning given in s. 126.55 (14).

SB55-ASA1-AA1,941,10 (11) "Vegetable procurement contract" has the meaning given in s. 126.55 (15).

SB55-ASA1-AA1,941,11 (12) "Vegetable producer" has the meaning given in s. 126.55 (16).

SB55-ASA1-AA1,941,14 126.70 Recovery proceedings. (1) Default claims. Any of the following persons may file a default claim with the department against a contractor who is licensed, or required to be licensed, under this chapter:

SB55-ASA1-AA1,941,17 (a) A grain producer or producer agent, as defined in s. 126.10 (13), who claims that a grain dealer has failed to pay, when due, for producer grain that the grain dealer procured in this state.

SB55-ASA1-AA1,941,20 (b) A depositor who is either a grain producer or a producer agent, as defined in s. 126.10 (13), and who claims that a grain warehouse keeper has failed to return stored grain or its equivalent upon demand.

SB55-ASA1-AA1,941,23 (c) A milk producer or producer agent, as defined in s. 126.40 (13), who claims that a milk contractor has failed to pay, when due, for producer milk procured in this state.

SB55-ASA1-AA1,942,3 (d) A vegetable producer or producer agent, as defined in s. 126.55 (12), who claims that a vegetable contractor has failed to make payment when due under a vegetable procurement contract.

SB55-ASA1-AA1,942,8 (2) Filing default claims. A claimant shall file a default claim under sub. (1) within 30 days after the claimant first learns of the default, subject to sub. (3). The claimant shall specify the nature and amount of the default. The department may investigate the alleged default and may require the claimant to provide supporting documentation.

SB55-ASA1-AA1,942,13 (3) Initiating a recovery proceeding. (a) The department may initiate a recovery proceeding in response to one or more default claims under sub. (1). The department shall issue a written notice announcing the recovery proceeding. The department shall mail or deliver a copy of the notice to the contractor and each claimant in the proceeding.

SB55-ASA1-AA1,942,17 (b) If the department has reason to believe that other persons may have default claims under sub. (1) against the same contractor, the department may invite those persons to file their claims in the recovery proceeding. The department may publish the invitation in any of the following ways:

SB55-ASA1-AA1,942,18 1. By posting it at the contractor's place of business.

SB55-ASA1-AA1,942,19 2. By publishing it as a class 3 notice under ch. 985.

SB55-ASA1-AA1,942,21 3. By mailing or delivering it to prospective claimants known to the department.

SB55-ASA1-AA1,942,22 4. By other means that the department considers appropriate.

SB55-ASA1-AA1,943,2 (c) In its invitation under par. (b), the department may specify a deadline date and a procedure for filing default claims. An invitation may indicate the amount of a prospective claimant's apparent claim and may ask the prospective claimant to verify or correct that amount.

SB55-ASA1-AA1,943,4 (d) The department may initiate separate recovery proceedings for default claims that comply with sub. (2) but are filed after the deadline date under par. (c).

SB55-ASA1-AA1,943,7 (4) Auditing claims. The department shall audit each claim included in a recovery proceeding. The department shall disallow a claim if the department finds any of the following:

SB55-ASA1-AA1,943,8 (a) That the claim is false or not adequately documented.

SB55-ASA1-AA1,943,11 (b) That the claimant filed the claim more than 30 days after the claimant first learned of the contractor's default, unless the department specifies a later claim-filing deadline under sub. (3) (c).

SB55-ASA1-AA1,943,14 (c) That the claimant, without any contractual obligation to do so, continued to deliver grain, milk, or vegetables to the defaulting contractor more than 10 days after the claimant first learned of the contractor's default.

SB55-ASA1-AA1,943,16 (d) That the claimant failed to comply with claim-filing deadlines or procedures specified under sub. (3) (c).