Amendment AA1-ASA1-SB55

SB55-ASA1-AA1,820,8 Chapter 126 Agricultural Producer security

SB55-ASA1-AA1,820,10 Subchapter I GENERAL

SB55-ASA1-AA1,820,11 126.01 General definitions. In this chapter:

SB55-ASA1-AA1,820,12 (1) "Affiliate" means any of the following persons:

SB55-ASA1-AA1,820,14 (a) An owner, major stockholder, partner, officer, director, member, employee, or agent of a contractor.

SB55-ASA1-AA1,820,15 (b) A person owned, controlled, or operated by a person under par. (a).

SB55-ASA1-AA1,820,16 (2) "Asset" means anything of value owned by a person.

SB55-ASA1-AA1,820,19 (3) "Audited financial statement" means a financial statement on which an independent certified public accountant, or an independent public accountant holding a certificate of authority under ch. 442, has done all of the following:

SB55-ASA1-AA1,820,22 (a) Stated that the financial statement presents fairly, in all material respects, the financial position of a contractor as of a specific date or for a specific period, according to one of the following:

SB55-ASA1-AA1,820,23 1. Generally accepted accounting principles.

SB55-ASA1-AA1,821,3 2. The historical cost basis method of accounting, if the financial statement is a sole proprietor's personal financial statement and the financial statement is prepared on a historical cost basis.

SB55-ASA1-AA1,821,4 (b) Conducted an audit according to generally accepted auditing standards.

SB55-ASA1-AA1,821,6 (4) "Balance sheet" means a statement of assets, liabilities, and equity on a specific date.

SB55-ASA1-AA1,821,7 (5) "Contractor," unless otherwise qualified, means any of the following:

SB55-ASA1-AA1,821,8 (a) A grain dealer, as defined in s. 126.10 (9).

SB55-ASA1-AA1,821,9 (b) A grain warehouse keeper, as defined in s. 126.25 (9).

SB55-ASA1-AA1,821,10 (c) A milk contractor, as defined in s. 126.40 (8).

SB55-ASA1-AA1,821,11 (d) A vegetable contractor, as defined in s. 126.55 (14).

SB55-ASA1-AA1,821,15 (6) "Current assets" means cash and other assets, including trade or investment items, that may be readily converted into cash in the ordinary course of business within one year after the date as of which the value of those assets is determined.

SB55-ASA1-AA1,821,17 (7) "Current liabilities" means those liabilities that are due within one year after the date as of which the value of those liabilities is determined.

SB55-ASA1-AA1,821,19 (8) "Department" means the department of agriculture, trade and consumer protection.

SB55-ASA1-AA1,821,20 (9) "Equity" means the value of assets less the value of liabilities.

SB55-ASA1-AA1,821,22 (10) "Equity statement" means a report of the change in equity from the beginning to the end of the accounting period covered by the report.

SB55-ASA1-AA1,821,24 (11) "Fund" means the agricultural producer security fund established under s. 25.463.

SB55-ASA1-AA1,822,6 (12) "Generally accepted accounting principles" means the accounting standards adopted by the Financial Accounting Standards Board, except that for a business entity organized and operating outside the United States "generally accepted accounting principles" includes generally accepted foreign accounting standards that are substantially equivalent to standards adopted by the Financial Accounting Standards Board.

SB55-ASA1-AA1,822,9 (13) "Grain" means corn, wheat, soybeans, oats, barley, rye, buckwheat, sorghum, flax seed, milo, sunflower seed, and mixed grain, as defined in 7 CFR 810.801, except that "grain" does not include any of the following:

SB55-ASA1-AA1,822,10 (a) Sweet corn or other canning crops for processing.

SB55-ASA1-AA1,822,13 (b) Seed corn, wheat, soybeans, oats, barley, rye, buckwheat, sorghum, flax seed, milo, sunflower seed, or mixed grain used or intended for use solely for planting purposes.

SB55-ASA1-AA1,822,16 (c) Corn, wheat, soybeans, oats, barley, rye, buckwheat, sorghum, flax seed, milo, sunflower seed, or mixed grain that has been rolled, cracked, roasted, or otherwise processed.

SB55-ASA1-AA1,822,18 (14) "Income statement" means a report of the financial results of business operations for a specific period.

SB55-ASA1-AA1,822,19 (15) "Individual" means a natural person.

SB55-ASA1-AA1,822,21 (16) "Interim financial statement" means a statement of financial condition prepared for a period shorter than a fiscal year.

SB55-ASA1-AA1,822,22 (17) "Milk" has the meaning given in s. 97.22 (1) (e).

SB55-ASA1-AA1,823,2 (18) "Person," notwithstanding s. 990.01 (26), means an individual, corporation, cooperative, partnership, limited liability company, trust, state agency, as defined in s. 20.001 (1), local governmental unit, as defined in s. 66.0131 (1) (a), or other legal entity.

SB55-ASA1-AA1,823,5 (19) "Producer," unless otherwise qualified, means a grain producer, as defined in s. 126.10 (10), milk producer, as defined in s. 126.40 (10), or vegetable producer, as defined in s. 126.55 (16).

SB55-ASA1-AA1,823,7 (20) "Reviewed financial statement" means a contractor's financial statement, other than an audited financial statement, if all of the following apply:

SB55-ASA1-AA1,823,9 (a) The contractor attests in writing, under oath, that the financial statement is complete and accurate.

SB55-ASA1-AA1,823,12 (b) The financial statement is reviewed by an independent certified public accountant or by an independent public accountant who holds a certificate of authority under ch. 442.

SB55-ASA1-AA1,823,14 (21) "Security" means security filed or maintained under s. 126.16, 126.31, 126.47, or 126.61.

SB55-ASA1-AA1,823,15 (22) "Sole proprietor" means a contractor who is an individual.

SB55-ASA1-AA1,823,19 (23) "Statement of cash flows" means a report of cash receipts and cash disbursements from operating, investing, and financing activities, including an explanation of changes in cash and cash equivalents for the accounting period covered by the report.

SB55-ASA1-AA1,823,24 (24) "Vegetable" means any vegetable that is grown or sold for use in food processing, whether or not the vegetable is actually processed as food. "Vegetable" includes green beans, kidney beans, lima beans, romano beans, wax beans, beets, cabbage, carrots, celery, cucumbers, onions, peas, potatoes, spinach, squash, and sweet corn, but does not include grain.

SB55-ASA1-AA1,824,3 subchapter II AGRICULTURAL PRODUCER SECURITY FUND

SB55-ASA1-AA1,824,6 126.05 Agricultural producer security fund. (1) The fund is a public trust and shall be administered to secure payments to producers. Moneys deposited into the fund may be used only for the purposes of this chapter.

SB55-ASA1-AA1,824,10 (2) The department shall deposit into the fund all fees, surcharges, assessments, reimbursements, and proceeds of surety bonds that the department collects under this chapter. The department shall keep a record by contractor and industry, of all deposits.

SB55-ASA1-AA1,824,13 126.06 Industry bonds. (1) Department to acquire bonds. Using moneys appropriated under s. 20.115 (1) (v), the department shall acquire and maintain all of the following surety bonds:

SB55-ASA1-AA1,824,16 (a) A surety bond that takes effect on May 1, 2002, to secure payment under s. 126.72 (2) of claims against contributing milk contractors, as defined in s. 126.40 (1).

SB55-ASA1-AA1,824,19 (b) A surety bond that takes effect on September 1, 2002, to secure payment under s. 126.72 (2) of claims against contributing grain dealers, as defined in s. 126.10 (3), and contributing grain warehouse keepers, as defined in s. 126.25 (2).

SB55-ASA1-AA1,824,22 (c) A surety bond that takes effect on February 1, 2002, to secure payment under s. 126.72 (2) of claims against contributing vegetable contractors, as defined in s. 126.55 (4).

SB55-ASA1-AA1,824,23 (2) Bond terms. The department shall ensure all of the following:

SB55-ASA1-AA1,824,25 (a) That the amount of each bond under sub. (1) is at least $5,000,000 but not more than $20,000,000.

SB55-ASA1-AA1,825,1 (b) That the amount of each bond under sub. (1) renews annually.

SB55-ASA1-AA1,825,3 (c) That each bond under sub. (1) is payable to the department for the benefit of the appropriate claimants under sub. (1).

SB55-ASA1-AA1,825,5 (d) That each bond under sub. (1) is issued by a person who is authorized to operate a surety business in this state.

SB55-ASA1-AA1,825,6 (dm) That no surety issues more than one of the 3 bonds under sub. (1).

SB55-ASA1-AA1,825,8 (e) That no bond issued under sub. (1) may be canceled or modified unless one of the following applies:

SB55-ASA1-AA1,825,9 1. The department agrees to the cancellation or modification.

SB55-ASA1-AA1,825,11 2. The department receives written notice from the issuer in person or by certified mail at least one year before the proposed cancellation or modification.

SB55-ASA1-AA1,825,13 (f) That the issuer of each bond under sub. (1) issues the bond in a form, and subject to any terms and conditions, that the department considers appropriate.

SB55-ASA1-AA1,825,15 (3) Bond procurement. The department shall procure the surety bonds under sub. (1) according to the procedures provided in subch. IV of ch. 16.

SB55-ASA1-AA1,825,19 126.07 Blanket bond. (1) Department to acquire bond. Using moneys appropriated under s. 20.115 (1) (v), the department shall acquire and maintain a surety bond, that takes effect on February 1, 2002, to secure payment under s. 126.72 (3) of claims against contributing contractors, as defined in s. 126.68 (1).

SB55-ASA1-AA1,825,20 (2) Bond terms. The department shall ensure all of the following:

SB55-ASA1-AA1,825,22 (a) That the amount of the bond under sub. (1) is at least $20,000,000 but not more than $40,000,000.

SB55-ASA1-AA1,825,23 (b) That the amount of the bond under sub. (1) renews annually.

SB55-ASA1-AA1,825,25 (c) That the bond under sub. (1) is payable to the department for the benefit of claimants described in sub. (1).

SB55-ASA1-AA1,826,3 (d) That the bond under sub. (1) is jointly issued by at least 3 persons acting as cosureties on the bond and that each of the persons is authorized to operate a surety business in this state.

SB55-ASA1-AA1,826,5 (e) That no issuer of the bond under sub. (1) may cancel or modify the bond, or withdraw as a cosurety, unless one of the following applies:

SB55-ASA1-AA1,826,6 1. The department agrees to the cancellation, modification, or withdrawal.

SB55-ASA1-AA1,826,9 2. The department receives written notice from the issuer that is delivered in person or by certified mail and is received at least one year before the proposed cancellation, modification, or withdrawal.

SB55-ASA1-AA1,826,11 (f) That the issuers of the bond under sub. (1) issue the bond in a form, and subject to any terms and conditions, that the department considers appropriate.

SB55-ASA1-AA1,826,13 (3) Bond procurement. The department shall procure the surety bond under sub. (1) according to the procedures provided in subch. IV of ch. 16.

SB55-ASA1-AA1,826,21 126.08 Start-up loan to fund; repayment. On January 1, 2002, $2,000,000 is transferred as a loan from the agrichemical management fund, to the agricultural producer security fund. The department shall repay this loan principal, plus interest compounded at 5% annually, from the agricultural producer security fund by July 1, 2006. The department shall transfer at least $250,000 from the agricultural producer security fund to the agrichemical management fund on July 1 of each year, beginning on July 1, 2003. The department may accelerate the loan repayment, at its discretion.

SB55-ASA1-AA1,826,23 subchapter III Grain DEALERS

SB55-ASA1-AA1,826,24 126.10 Definitions. In this subchapter:

SB55-ASA1-AA1,827,2 (1) "Cash on delivery" means full cash payment for grain when the grain dealer takes custody or control of the grain.

SB55-ASA1-AA1,827,3 (2) "Cash payment" means payment in any of the following forms:

SB55-ASA1-AA1,827,4 (a) Currency.

SB55-ASA1-AA1,827,5 (b) A cashier's check or a check that a bank issues and certifies.

SB55-ASA1-AA1,827,6 (c) A wire transfer.

SB55-ASA1-AA1,827,7 (d) Simultaneous barter.

SB55-ASA1-AA1,827,12 (3) "Contributing grain dealer" means a grain dealer who is licensed under s. 126.11, who either has paid one or more quarterly installments under s. 126.15 (7) or is required to contribute to the fund, but the first quarterly installment under s. 126.15 (7) is not yet due, and who is not disqualified from the fund under s. 126.14 (2).

SB55-ASA1-AA1,827,14 (4) "Current ratio" means the ratio of the value of current assets to the value of current liabilities, calculated according to s. 126.13 (6) (c) 1.

SB55-ASA1-AA1,827,16 (5) "Debt to equity ratio" means the ratio of the value of liabilities to equity, calculated according to s. 126.13 (6) (c) 2.

SB55-ASA1-AA1,827,20 (6) "Deferred payment contract" means a contract for the procurement of grain under which a grain dealer takes custody or control of producer grain more than 7 days before paying for the grain in full. "Deferred payment contract" includes a deferred price contract.

SB55-ASA1-AA1,827,23 (7) "Deferred price contract" means a contract for the procurement of grain under which a grain dealer takes custody or control of producer grain more than 7 days before the price of that grain must be determined under the contract.

SB55-ASA1-AA1,827,25 (8) "Disqualified grain dealer" means a grain dealer who is disqualified from the fund under s. 126.14 (2).

SB55-ASA1-AA1,828,3 (9) "Grain dealer" means a person who buys producer grain or who markets producer grain as a producer agent. "Grain dealer" does not include any of the following:

SB55-ASA1-AA1,828,6 (a) A person who merely brokers a contract between a grain producer and a grain dealer without becoming a party to the contract, taking control of grain, or accepting payment on behalf of the grain producer.

SB55-ASA1-AA1,828,8 (b) A person who merely buys or sells grain on a board of trade or commodity exchange.