Under this bill, a grain dealer must obtain a license from DATCP unless the dealer pays cash on delivery for all producer-owned grain that the dealer procures or the dealer buys grain solely for the dealer's own use as feed or seed and spends less than $400,000 per license year for that grain. A grain dealer that is required to be licensed must contribute to the fund, unless the dealer is disqualified. If a grain dealer that contributes to the fund defaults on payments to producers, DATCP pays default claims from the fund.
A grain dealer that is required to file security (because the dealer has negative equity) with DATCP when the grain dealer is first licensed under this bill is disqualified from the fund until DATCP releases the security. A grain dealer is disqualified from the fund, and required to pay cash on delivery for grain, if DATCP denies, suspends, or revokes the dealer's license or if DATCP disqualifies the dealer for cause.
The bill establishes the formula for determining the amount of the assessments that must be paid by a grain dealer that contributes to the fund, except that DATCP may, by rule, provide for a different formula. The assessments are based on a grain dealer's financial condition, the amount spent to procure grain from producers, the amount incurred under deferred payment contracts, and the number of consecutive years that the dealer has contributed to the fund.
The bill requires a grain dealer to maintain insurance to cover all grain in the custody of the grain dealer.
Under the bill, grain dealer license fees vary based on the amount that the grain dealer pays for grain during a license year and the number of trucks used to haul grain. Under the bill, if the balance in the fund contributed by grain dealers exceeds $2,000,000 on any June 30, DATCP must use 50% of the excess to reduce license fees.
Grain warehouse keepers
Current law requires a grain warehouse keeper that holds 50,000 or more bushels of grain for others at any time to obtain a license from DATCP. A grain warehouse keeper that does not satisfy minimum financial standards must file security with DATCP.
Under this bill, a licensed grain warehouse keeper is required to contribute to the fund, unless the warehouse keeper is disqualified. If a grain warehouse keeper that contributes to the fund fails to deliver grain to depositors upon demand, DATCP pays default claims from the fund.
A grain warehouse keeper that is required to file security (because the warehouse keeper has negative equity) with DATCP when the warehouse keeper is first licensed under this bill is disqualified from the fund until DATCP releases the security. A grain warehouse keeper is also disqualified from the fund if DATCP denies, suspends, or revokes the warehouse keeper's license.
The bill establishes the formula for determining the amount of the assessments that must be paid by a grain warehouse keeper that contributes to the fund, except that DATCP may, by rule, provide for a different formula. The assessments are based on a warehouse keeper's financial condition, the capacity of the warehouses, and the number of consecutive years that the warehouse keeper has contributed to the fund.
The bill specifies annual grain warehouse keeper fees that are based on combined warehouse capacity. Under the bill, if the balance in the fund contributed by grain warehouse keepers exceeds $300,000 on any June 30, DATCP must use 12.5% of the excess to reduce license fees.
Vegetable contractors
Current law requires a vegetable contractor to obtain a registration certificate from DATCP. A vegetable contractor that does not meet minimum financial standards must file security with DATCP unless the contractor makes payment on delivery for all vegetables obtained from producers or the contractor is a producer-owned cooperative doing business solely with its producer-owners.
This bill requires a vegetable contractor to obtain a license from DATCP. A licensed vegetable contractor must contribute to the fund unless the contractor makes payment on delivery for all vegetables obtained from producers, the contractor is a producer-owned cooperative that procures vegetables only from its producer owners, or the contractor is disqualified. If a vegetable contractor that contributes to the fund defaults on payments to producers, DATCP pays default claims from the fund.
A vegetable contractor that is required to file security with DATCP when the vegetable contractor is first licensed under this bill because the contractor has negative equity is disqualified from the fund until DATCP releases the security. A vegetable contractor is disqualified from the fund if DATCP denies, suspends, or revokes the contractor's license. A vegetable contractor is disqualified from the fund, and required to pay cash on delivery for all vegetables received from producers, if DATCP issues a written notice disqualifying the contractor for cause, including failure to pay fund assessments when due.
The bill establishes the formula for determining the amount of the assessments that must be paid by a vegetable contractor that contributes to the fund, except that DATCP may, by rule, provide for a different formula. The assessments are based on a vegetable contractor's financial condition, the amount spent to procure vegetables from producers, the amount incurred under deferred payment contracts, and the number of consecutive years that the contractor has contributed to the fund.
The bill requires a vegetable contractor to maintain insurance to cover all vegetables in the custody of the contractor, unless the vegetable contractor pays cash on delivery for all vegetables or the contractor is a producer-owned cooperative that procures vegetables only from its producer owners.
Under the bill, vegetable contractor license fees are based on the amount that a vegetable contractor owed to vegetable producers over the course of the contractor's most recent fiscal year. Under the bill, if the balance in the fund contributed by vegetable contractors exceeds $1,000,000 on any November 30, DATCP must use 50% of the excess to reduce license fees.
Recovery proceedings and administration
Under this bill, when contractors who are licensed, or required to be licensed, fail to make payments when due or when grain warehouse keepers fail to return stored grain upon demand, producers or their agents may file default claims with DATCP.
The bill specifies payment amounts for each claim against a contractor that was contributing to the fund when the default occurred. For a claim against a milk contractor or grain dealer, the payment amount is 90% of the first $20,000 allowed, 85% of the next $20,000 allowed, 80% of the next $20,000 allowed, and 75% of any amount allowed in excess of $60,000. For a claim against a grain warehouse keeper, the payment amount is 100% of the first $100,000 allowed. For a claim against a vegetable contractor, the payment amount is 90% of the first $40,000 allowed, 85% of the next $40,000 allowed, 80% of the next $40,000 allowed, and 75% of any amount allowed in excess of $120,000. If a contractor was not contributing to the fund when the default occurred but had posted security with DATCP, DATCP uses the security proceeds to pay the full amount of the allowed claims, except that, as under current law, if the security is not adequate to pay the full amount of the allowed claims, DATCP pays the claimants on a prorated basis. A claimant that does not receive full payment may sue the contractor for the balance of the allowed claim.
The bill requires DATCP to obtain three surety bonds, called industry bonds. One bond is to secure payments of claims against contributing milk contractors, one to secure payments of claims against contributing grain dealers and warehouse keepers, and one to secure payment of claims against contributing vegetable contractors. In addition, the bill requires DATCP to obtain a blanket surety bond. The bill requires DATCP to make a demand against the appropriate industry bond if payments of claims against contributing contractors in that industry exceed a threshold specified in the bill. The bill requires DATCP to make a demand against the blanket bond if claims against contributing contractors in an industry exceed the amount available under the industry bond.
The bill authorizes DATCP to demand that a defaulting contractor reimburse DATCP for any claim amounts that were paid from the fund because of the contractor's default. The bill also authorizes a person who issues an industry bond or the blanket bond to require a defaulting contractor to reimburse the amounts that the person paid out because of the contractor's default.
Other agriculture
Under current law, for a person to claim the farmland preservation tax credit, the land to which the claim relates must be subject either to a farmland preservation agreement or to an exclusive agricultural use zoning ordinance. A farmland preservation agreement is between the landowner and DATCP. The agreement commits the owner to keep the land in agricultural use for the duration of the agreement, up to 25 years, although DATCP may release land from an agreement under certain circumstances. Under current law, in some of the circumstances under which DATCP may release land from a farmland preservation agreement, or if land is rezoned from exclusive agricultural use, DATCP is required to file a lien against the land in the amount of the farmland preservation credit received by the owner during the preceding ten years.
This bill eliminates the requirement that DATCP file a lien against land that is released from a farmland preservation agreement or that is rezoned from exclusive agricultural use. Under the bill, DATCP may not release land from a farmland preservation agreement until the owner pays $50 per acre to this state, except in certain situations such as the death or disability of the owner. Also under the bill, a local governmental unit must require a payment of $60 per acre as a condition of rezoning land from exclusive agricultural zoning. The local governmental unit forwards the payment to the state.
Under current law, if DATCP finds that plants or other pest-harboring materials on agricultural lands or agricultural business premises are so infested with injurious pests as to constitute a hazard to plant or animal life in this state, DATCP may order the property owner to treat the premises or treat or destroy the infested plants or other material. If the property owner fails to comply with the order, DATCP may treat the premises or treat or destroy the infested plants or other material. This bill eliminates the provision that restricts DATCP's authority regarding treatment of infested premises and treatment or destruction of infested plants and other material to agricultural lands and agricultural business premises.
Under the current Soil and Water Resource Management Program, DATCP awards grants to counties to help the counties reduce soil erosion and water pollution. This bill increases the authorized general obligation bonding authority for the Soil and Water Resource Management Program by $7,000,000.
Under current law, DATCP awards agricultural research and development grants to fund demonstration projects, feasibility analyses, and applied research on new or alternative technologies and practices that will stimulate agricultural development. This bill authorizes DATCP to award grants and provide technical assistance to support preliminary research on potential business enterprises that may increase the value of raw agricultural commodities. The bill provides Indian gaming receipts for the new grant program and for the existing agricultural research and development grant program.
Under current law, a person is subject to a fine or imprisonment if the person violates certain laws enforced by DATCP, including laws relating to the manufacture, distribution, and sale of commercial feed, laws relating to the safety of certain consumer products, and laws relating to hazardous substances. This bill provides that a person who violates any of these laws may be subject to a forfeiture (civil monetary penalty) or to the existing criminal penalties.
Current law provides for a World Dairy Center Authority. The duties of the authority include establishing a center for the development of dairying in the United States and the world. This bill eliminates the World Dairy Center Authority.
Commerce and economic development
Economic development
Under this bill, the department of commerce (department) must designate up to 20 areas in the state as technology zones. The department may certify any new or expanding high-technology business located in a designated technology zone for a tax credit that is based on the amount of real and personal property taxes that the business paid in the taxable year; the amount of sales and use taxes that the business paid in the taxable year; and the amount of income and franchise taxes that the business paid in the taxable year. A business certified by the department may claim the tax credit for three years, or for up to five years if the business experiences growth to an extent determined by the department, but the total amount that a business may claim is limited by the department, and not more than $5,000,000 in tax credits may be claimed by all businesses certified in a technology zone.
This bill designates an area in the city of Milwaukee as a development opportunity zone and authorizes up to $4,700,000 to be claimed in tax credits for economic activity in the zone. The bill also provides that a person conducting economic activity in this new development opportunity zone who would not otherwise be able to claim tax credits may be certified for tax credits if: 1) the economic activity is instrumental in enabling another person to conduct economic activity in the zone that would not have occurred but for the first person's involvement; 2) the department determines that the person being certified for tax credits will pass the benefit of the tax credits through to the other person conducting the economic activity in the zone; and 3) the other person conducting economic activity in the zone does not claim tax credits for the economic activity.
In addition, the bill creates an income tax and franchise tax credit for a business that is certified to receive tax credits in the new development opportunity zone that is equal to 3% of the following: 1) the purchase price of tangible personal property that is used for at least 50% of its use for the business at a location in the zone; and 2) the amount expended to acquire, construct, rehabilitate, remodel, or repair real property in the zone. A business may claim the credit only to offset taxes that are imposed on income that is attributable to the operations of the business in the development zone.
Under the current community-based economic development programs, the department awards grants to counties, cities, villages, towns, and community-based organizations for various purposes related to promoting economic development at the community level. This bill eliminates these programs and creates the New Economy for Wisconsin (NEW) Program. Under NEW, the department may award grants, not exceeding $100,000 each, to community-based business incubators and nonprofit organizations that provide services to high-technology businesses or that promote entrepreneurship. Grant proceeds may be used only for assisting small businesses (businesses with fewer than 100 employees) in adopting new technologies in their operations, for assisting technology-based small businesses in activities that further technology transfer, or for assisting entrepreneurs in discovering business opportunities.
Under the current Gaming Economic Development Grant and Loan Program, the department may award a grant for professional services, or award a grant or make a loan for fixed asset financing, to an existing business in this state if the business has been negatively affected by the existence of a casino and has a legitimate need for the grant or loan to improve profitability. Under the current Gaming Economic Diversification Program, the department may award a grant or make a loan to an existing business in this state for a project that will diversify the economy of a community. Each program is funded with Indian gaming receipts.
Under this bill, start-up businesses, in addition to existing businesses, are eligible for the grants and loans under both programs. The bill adds remediating brownfields (which are abandoned, idle, or underused industrial or commercial facilities or sites that are adversely affected for expansion or redevelopment by actual or perceived environmental contamination) as a project purpose for which grants and loans may be awarded under the Gaming Economic Diversification Program. In addition, the bill authorizes the department to award a grant to the M7 Development Corporation for construction of a multipurpose center at Lincoln Park in the city of Milwaukee and to award grants to the Chippewa Valley Technical College for a health care education center. These grants are paid out of Indian gaming receipts.
Under the current Physician Loan Assistance Program, the department may repay, over a three-year period, up to $50,000 in educational loans on behalf of a physician who specializes in family practice, general internal medicine, general pediatrics, obstetrics and gynecology, or psychiatry and who agrees to practice at least 32 hours per week for three years in a clinic in one or more eligible practice areas in this state. This bill expands the Physician Loan Assistance Program to include dentists.
Under current law, the department must award grants not exceeding a total of $900,000 to the city of Milwaukee for a matching grant program administered by the Milwaukee Economic Development Corporation. Under that program, grants are provided to persons for remediation and economic redevelopment projects in the Menomonee valley. Funding comes from Indian gaming receipts. This bill requires the department to make grants in the 2001-03 fiscal biennium directly to the Milwaukee Economic Development Corporation for its matching grant program and to the Menomonee Valley Partners, Inc. Funding comes from Indian gaming receipts. The proceeds of these grants must be used to support job creation and private sector implementation of the Menomonee valley land use plan.
WHEDA currently administers a number of loan guarantee programs under which WHEDA guarantees repayment of a percentage of the outstanding principal amounts of loans made by private lenders to qualified borrowers for various business and agricultural purposes. Most of the loan guarantee programs are backed by funds in the Wisconsin development reserve fund. Each loan guarantee program has a limit on the total outstanding principal amount of all loans that WHEDA may guarantee under the program (guarantee limit). In that way, WHEDA may guarantee more loans under a program as the loans already guaranteed under that program are repaid.
The bill eliminates the separate guarantee limit under each of the guarantee loan programs that are backed by the Wisconsin development reserve fund and establishes one overall guarantee limit of $62,000,000 for all programs backed by that reserve fund. Thus, as loans guaranteed under a program that is backed by the Wisconsin development reserve fund are repaid, WHEDA may guarantee more loans under any of the programs that are backed by that reserve fund.
Current law requires WHEDA to ensure that the cash balance in the Wisconsin development reserve fund is maintained at a ratio of $1 of reserve funding to $4.50 of outstanding principal that WHEDA may guarantee under all of its loan guarantee programs, except the cultural and architectural landmark loan guarantee program, under which WHEDA no longer guarantees new loans. This bill changes the ratio at which WHEDA must maintain the Wisconsin development reserve fund to $1 of reserve funding to $5.50 of outstanding principal that WHEDA may guarantee under all of the programs guaranteed from the fund, except the cultural and architectural landmark loan guarantee program. The reserve funding ratio for that program remains at $1 of reserve funding to $4 of outstanding guaranteed principal.
Currently, under the Small Business Development Loan Guarantee Program, WHEDA may guarantee repayment of up to the lesser of $200,000 or 80% of the principal of a loan made by a private lender to a small business (a business with 50 or fewer full-time employees) or the elected governing body of a federally recognized American Indian tribe or band in this state. The proceeds of a small business development loan may be used only for expenses associated with the expansion or acquisition of a business or with the start-up of a day care business. This bill adds to the eligible uses of a small business development loan expenses associated with the start-up of a small business in a vacant storefront in the downtown area of a city, town, or village with a population of less than 50,000.
Currently, in each fiscal biennium, the department of tourism may select up to two areas of the state to participate in the Heritage Tourism Program, which entitles an area to assistance in assessing its potential for heritage tourism (tourism that is based on historical or prehistorical resources) and in developing and implementing a plan to increase such tourism. The department of tourism awards grants for promoting heritage tourism in the selected areas to the persons that applied on behalf of the areas. Only one grant may be awarded to an applicant in a fiscal year, and grants may be awarded to an applicant only in two fiscal years.
This bill provides that the two grants that may be awarded to an applicant on behalf of a selected area may be awarded only in the two fiscal years of the fiscal biennium in which the area was selected. The bill also provides that, after the fiscal biennium in which an area was selected, the department of tourism may award grants of up to $5,000 in a fiscal year to a nonprofit organization that is located in the area. A nonprofit organization is eligible for the new grants even if it previously received grants as the applicant on behalf of the area.
Under current law, WHEFA may issue bonds to finance facilities and related structures that are used for post-secondary education. This bill allows WHEFA to issue bonds to finance facilities and related structures that are used for primary and secondary education.
Under the current Brownfields Grant Program, the department of commerce (department) awards grants to persons, municipalities, and local development corporations for redevelopment of brownfields and remediation activities associated with the redevelopment. This bill provides that all of the following are eligible for a brownfields grant: an individual, partnership, limited liability company, corporation, nonprofit organization, city, village, town, county, or trustee, including a trustee in bankruptcy.
Under current law, the department may award up to $1,000,000 in grants each fiscal year to technology-based nonprofit organizations to provide support for manufacturing extension centers. This bill eliminates the June 30, 2001, expiration date of the Manufacturing Extension Center Grant Program.
Commerce
Uniform Electronic Transactions Act
This bill enacts a version of the Uniform Electronic Transactions Act (UETA), which was approved and recommended for enactment by the National Conference of Commissioners on Uniform State Laws in 1999. Currently, a combination of state and federal laws govern the use of electronic documents and signatures in this state. The most significant federal law in this regard is the Electronic Signatures in Global and National Commerce Act, commonly known as "E-sign." Although E-sign contains provisions that potentially affect the maintenance and destruction of public records and the acceptance of electronic documents by governmental units, E-sign primarily affects the use of electronic documents and signatures in consumer and business transactions.
E-sign generally preempts inconsistent state laws. However, with possible limited exceptions, E-sign does not preempt a state law that constitutes an enactment of the recommended version of UETA. This bill contains only minor, nonsubstantive changes to the recommended version of UETA as necessary to incorporate UETA into the existing statutes. Several provisions of UETA are subject to varying interpretations. Unless otherwise noted, this analysis reflects the interpretation, if any, that is supported by the prefatory note or official comments to the recommended version of UETA.
Like E-sign, the bill primarily affects the use of electronic documents and electronic signatures in transactions. Under the bill's broad definitions, such things as information stored on a computer disk or a voice mail recording would likely qualify for use as an electronic document. However, like E-sign, this bill does not apply to the execution of wills, to testamentary trusts, or to a transaction governed by any chapter of this state's version of the Uniform Commercial Code other than the chapter dealing with sales of goods. Unlike E-sign, this bill may permit the use of electronic documents for matters relating to family law; court documents; notices of the cancellation of utility services; certain notices of default, acceleration, repossession, foreclosure, eviction, or the right to cure; certain notices of the cancellation or termination of health insurance or life insurance; and product recall notices.
Like E-sign, this bill specifies that a document or signature may not be denied legal effect or enforceability solely because it is in electronic form. Unlike E-sign, this bill further states that an electronic document satisfies any law requiring a document to be in writing and that an electronic signature satisfies any law requiring a signature. The bill does not require the use of electronic documents or electronic signatures. Rather, the bill applies only to transactions between parties each of which has agreed to conduct transactions by electronic means. However, unlike current law under E-sign, this bill does not contain any protections that specifically apply only to consumer transactions. The consumer protections currently in effect under E-sign would likely have no effect in this state upon the enactment of this bill.
Under this bill, a person may use an electronic document in a transaction to satisfy any law requiring the person to provide, send, or deliver information in writing to another person, if the electronic document satisfies certain conditions. Although the bill also states that a document relating to a transaction may not be denied legal effect solely because it is in electronic form, the bill likely permits a person to deny the legal effect of an electronic document that does not satisfy these conditions. The bill also specifies that, with certain exceptions, a document must satisfy any law requiring the document to be posted or displayed in a certain manner; to be sent, communicated, or transmitted by a specified method; or to contain information that is formatted in a certain manner. Although this provision is subject to varying interpretations, it likely requires the parties to a transaction to comply with any legal requirement relating to the provision of information other than a requirement that the information be provided on paper.
The bill establishes the time and location of the sending and receipt of an electronic document, although the parties to a transaction may agree to alter the effect of these provisions. The bill also permits a sender to expressly provide in an electronic document that the document is deemed to be sent from a different location. The bill also establishes the legal effects of any change or error in an electronic document that occurs in a transmission between the parties to a transaction. These effects depend in part upon whether the parties have consented to the use of a security procedure and whether the transaction is an automated transaction involving an individual.
With certain exceptions, this bill permits the use of an electronic document to satisfy any law that requires document retention, as long as the retained information satisfies certain requirements relating to content and accessibility. An electronic document retained in compliance with these provisions has the same legal status as the original document and need not contain any information the sole purpose of which is to enable the document to be sent, communicated, or received. Under current law, this ancillary information is normally required to be retained if the document to which it is attached is required to be retained. The bill specifies that the state may enforce laws enacted after this bill that prohibit a person from using an electronic document to satisfy any requirement that the person retain a document for evidentiary, audit, or like purposes. It is unclear, though, what types of retention requirements are enacted for "evidentiary, audit, or like purposes." The bill also specifies that it does not preclude a governmental unit of this state from imposing additional requirements for the retention of any document subject to its jurisdiction. It is unclear how this provision relates to other provisions of the bill which provide that certain electronic documents satisfy any retention requirement.
Like E-sign, this bill also permits electronic notarization, acknowledgement, or verification of a signature or document relating to a transaction, as long as the electronic signature of the person performing the notarization, acknowledgement, or verification is accompanied by all other information required by law. In addition, like E-sign, this bill contains provisions potentially affecting the maintenance and destruction of public records. However, this potential effect is less likely to occur under this bill, if the scope of the UETA provisions is interpreted to be consistent with the prefatory note and comments to the recommended version of UETA. The bill also clarifies an ambiguity in current law under E-sign by authorizing a person to submit an electronic document or signature to a governmental unit only if the governmental unit consents.
Universal banking
This bill allows a savings bank, a savings and loan association, and a state bank (a financial institution) to become certified by the division of banking in DFI as a universal bank. If certified as a universal bank, the financial institution may exercise certain additional powers.
In order to be certified as a universal bank, a financial institution must be chartered or organized, and regulated, as a Wisconsin financial institution and be in existence and continuous operation for at least three years; must be well-capitalized; must not exhibit moderately severe or unsatisfactory financial, managerial, operational, and compliance weaknesses; and must not have been the subject of any enforcement action within the 12 months preceding the application. In addition, the most recent evaluation of the financial institution under the federal Community Reinvestment Act must rate the financial institution as outstanding or satisfactory at helping to meet the credit needs of its entire community. Also, the most recent evaluation of the financial institution under certain federal laws relating to customer privacy must indicate that the financial institution is in substantial compliance with those federal laws. A financial institution that the division of banking certifies as a universal bank retains its original status and remains subject to all of the laws that applied to the financial institution prior to its certification as a universal bank, except to the extent that such laws are inconsistent with the powers and duties of universal banks. The bill expands the powers of a financial institution that becomes certified as a universal bank to include any activity authorized for any savings bank, savings and loan association, or state bank.
The bill permits a universal bank, with the approval of the division of banking, to exercise all powers that may be exercised directly by a national bank, a federally chartered savings bank, or a federally chartered savings and loan association. The division of banking may require a universal bank to exercise a federal power through a subsidiary, in order to limit the risk of exposure of the universal bank. In addition, the bill permits a universal bank, with the approval of the division of banking, to exercise through a subsidiary all powers that a subsidiary of these federal financial institutions may exercise.
The bill permits a universal bank to deal in loans or extensions of credit for any purpose. Like state banks, the limitations imposed on a universal bank's lending generally focus on the total amount of liabilities of any one lender at any one time. Although the limit varies, the general rule is that the total liabilities of any one person to a universal bank may not exceed 20% of the capital of the universal bank. In addition, the bill grants a universal bank additional authority to lend an aggregate amount to all borrowers not to exceed 20% of the bank's capital. The division of banking may suspend this additional authority based upon factors including the universal bank's capital adequacy, management, earnings, liquidity, and sensitivity to market risk. The bill prohibits a universal bank, in determining whether to make a loan or extension of credit, from considering any health information obtained from the records of an affiliate of the universal bank that is engaged in the business of insurance, unless the person to whom the health information relates consents.
The bill permits a universal bank to purchase, sell, underwrite, and hold, to the extent consistent with safe and sound banking practices, certain investment securities in an amount up to 100% of the universal bank's capital. A universal bank may not invest greater than 20% of its capital in any one obligor or issuer. Subject to certain limits the bill also allows a universal bank to purchase, sell, underwrite, and hold equity securities. Universal banks may also invest in certain housing properties and projects and profit-participation projects. The bill provides that a universal bank also may invest without limitation in several specific types of securities. The universal bank may invest in risk management instruments, including financial futures transactions, financial operations transactions, and forward commitments, solely for the purpose of reducing, hedging, or otherwise managing its interest rate risk exposure. In addition, a universal bank may invest in other financial institutions. However, the bill contains specific provisions governing the purchase by a universal bank of its own stock and of stock in banks and bank holding companies.
The bill permits a universal bank to establish the types and terms of deposits that the universal bank solicits and accepts. A universal bank may pledge its assets as security for deposits and, with the approval of the division of banking, may securitize its assets for sale to the public. In addition, a universal bank may exercise certain safe deposit and trust powers.
The bill permits a universal bank to exercise all powers necessary or convenient to effect the purposes for which the universal bank is organized or to further the businesses in which the universal bank is lawfully engaged. In addition, the bill permits a universal bank to engage in activities that are reasonably related or incident to the purposes of the universal bank. Under the bill, any activity permitted under the federal Bank Holding Company Act satisfies the reasonably related or incidental criterion. The bill also contains a list of specific activities that meet the reasonably related or incidental criterion. The listed activities include: real estate-related services; insurance services, other than insurance underwriting; securities brokerage; investment advice; securities and bond underwriting; mutual fund activities; financial consulting; and tax planning and preparation. A universal bank may also engage in activities that the division of banking determines by rule are reasonably related or incidental to these listed activities. In addition, the division of banking, by rule, may determine that other activities are reasonably related or incidental activities. In promulgating these rules, the division of banking need not follow the standard notice, hearing, and publication requirements that generally apply to administrative rule making.
Credit unions
This bill expands the pool of individuals, organizations, and associations that are eligible for membership in a credit union. Under the bill, credit union membership is open to individuals who reside or are employed in well-defined, contiguous neighborhoods and communities, except that, if the office of credit unions determines, subsequent to a merger, that it is inappropriate to require the members of a credit union to reside or be employed in contiguous neighborhoods and communities, the requirement does not apply. In addition, membership is open to individuals who reside or are employed in well-defined, contiguous rural districts or multicounty regions. The bill also opens credit union membership to any organization or association that has its principal business location within any geographic limits of the credit union's field of membership. The bill also permits a credit union to accept any organization or association as a member if a majority of the directors, owners, or members of the organization or association are eligible for membership.
Under current law, if the need exists, a credit union may establish branch offices within this state or no more than 25 miles outside of this state. In addition, under current law regarding interstate mergers and acquisitions of credit unions, a credit union organized in this state may only merge with, acquire, or be acquired by a state or federal credit union that has its principal office in Illinois, Indiana, Iowa, Kentucky, Michigan, Minnesota, Missouri, or Ohio. This bill expands the authority of a credit union to establish branch offices. Under the bill, with the permission of the office of credit unions, a credit union may establish branch offices anywhere inside or outside of this state. In addition, the bill repeals this geographic limitation on mergers and acquisitions of credit unions.
Current law does not specifically permit a credit union organized under the laws of another state (non-Wisconsin credit union) to establish a branch office in this state. This bill specifies that a non-Wisconsin credit union may establish a branch office in this state if the office of credit unions finds that certain conditions apply to the non-Wisconsin credit union.
Under current law, subject to certain limitations, a credit union may invest in an organization that is organized primarily to provide goods and services to credit unions, credit union organizations, and credit union members (credit union service organization). Under current law, a credit union may invest in a credit union service organization that is a corporation. Current law specifies the services that a credit union service organization may provide. This bill permits a credit union to invest in a credit union service organization that is a corporation, limited partnership, limited liability company, or any other entity that is permitted under state law and that is approved by the office of credit unions. The bill also permits the office of credit unions to increase the maximum amount that a credit union may invest in a credit union service organization. In addition, the bill expands the types of services that a credit union service organization may provide to include electronic transaction services.
This bill expands the authority of a credit union to act as a trustee, allowing a credit union, to the extent permitted by federal law, to act as a trustee or custodian of member tax deferred retirement funds, individual retirement accounts, medical savings accounts, and other employee benefit accounts or funds. In addition, the bill allows a credit union, to the extent permitted by federal law, to act as a depository for member qualified and nonqualified deferred compensation funds.
Current law contains several credit union reporting requirements and, with certain exceptions, requires the office of credit unions to annually examine the records and accounts of each credit union. The employees of the office of credit unions and members of the credit union review board must keep information obtained in the course of examinations confidential, with limited exceptions. A violation of this confidentiality requirement is subject to a forfeiture (civil penalty) of up to $200. This bill creates a crime for certain disclosures of information by any employee of the office of credit unions or member of the credit union review board and creates a crime for knowingly falsifying certain credit union reports or statements.
This bill requires credit unions to comply with certain federal laws relating to customer financial privacy and requires the office of credit unions to examine credit unions for compliance with these federal laws.
Alcohol beverages
Under the current Fair Dealership Law, which applies to most types of product distributors, a wholesaler of fermented malt beverages that operates under a contract or agreement, expressed or implied, with a brewer (known as the grantor) for distribution of a brewer's products, and that maintains a "community of interest" (i.e., a sufficiently close continuing financial interest) with the brewer, is considered a dealer. A brewer may not terminate, cancel, fail to renew, or substantially change in terms of competitive circumstances a dealer's distribution rights without good cause. A brewer that does so may be held liable, and injunctive relief preventing the brewer's actions may be obtained. Good cause means failure by the dealer to comply substantially with essential and reasonable requirements imposed upon the dealer by the brewer, which requirements are not discriminatory as compared to their application by the brewer to other similarly situated dealers. Good cause also means bad faith by the dealer in carrying out the brewer's distribution business.
Under this bill, a fermented malt beverages wholesaler that does not maintain a "community of interest" with a brewer may still be a dealer of the brewer, such that the wholesaler's product distribution rights may not be terminated by the brewer without good cause. The bill also requires that, if a fermented malt beverages wholesaler's authorization to distribute products is terminated in whole or in part by a brewer (even for good cause), any succeeding fermented malt beverages wholesaler must compensate the terminated wholesaler for the fair market value of the distributorship that was terminated by the brewer. An exception exists if the terminated wholesaler was terminated by the brewer because the terminated wholesaler: engaged in material fraudulent conduct or made material and substantial misrepresentations in its dealings with the brewer or others; was convicted of a felony substantially related to operation of the dealership; or knowingly distributed products outside the territory authorized by the brewer. Disputes regarding the amount of compensation owed by a succeeding wholesaler to a terminated wholesaler must be mutually resolved between the parties or resolved through binding arbitration through a nationally recognized arbitration association.
Under current law, with certain exceptions, the outright sale, transfer, or assignment of a license to sell alcohol beverages at retail is illegal and unenforceable. However, current licensees or permittees at times agree to surrender to the issuing authority their license or permit for a premises upon promise of payment by another party if the surrender results in the other party being awarded the liquor license or permit for the premises. This bill prohibits municipalities and DOR from issuing to an applicant a retail license or permit to sell alcohol beverages if the premises described in the application is already covered by a current license or permit of the same kind unless each fermented malt beverage wholesaler to whom the current licensee or permittee is indebted is first notified that another person has applied for a license or permit for the same premises.
Under current law, a person who holds a security interest in alcohol beverages may, without a license or permit, sell alcohol beverages. This bill requires that a sale of fermented malt beverages by a secured party be made within 30 days after the secured party takes possession of the fermented malt beverages unless the secured party demonstrates good cause why this time period is insufficient to make a sale that is commercially reasonable or in conformity with the parties' security agreement.
Under current law, any person who ships fermented malt beverages from out-of-state to this state must hold an out-of-state shippers' permit, which authorizes the permittee to ship fermented malt beverages only to licensed wholesalers within the state. This bill requires DOR to issue a written warning for an out-of-state shipper's first violation, and increases the penalty for any subsequent violation.
Current law generally prohibits any brewer or wholesaler of fermented malt beverages from furnishing anything of value to a retailer of fermented malt beverages. A number of exceptions to this prohibition exist. One exception allows brewers and wholesalers to give to any fermented malt beverage retailer, for placement inside the premises, signs, clocks, or menu boards with an aggregate value of not more than $150. This bill increases the aggregate limit on the value of signs, clocks, or menu boards from $150 to $2,500 during any calendar year. The bill also allows a brewer or wholesaler to provide signs made from plastic, vinyl, or other materials with a limited useful life without limitation on the aggregate value of these signs. The bill further increases the allowable business entertainment value limit from $75 per day to $500 per day and limits the number of days to not more than 12 in a calendar year.
Another exception allows a brewer or wholesaler to purchase advertising from a national or statewide trade association of retailers. This bill allows a brewer or wholesaler to purchase advertising from an advertising agency or media company to promote brewer or wholesaler sponsored sweepstakes, contests, or promotions on the premises of retailers if the promotional material includes at least five unaffiliated retailers and if the retailer on whose premises the sweepstakes, contest, or promotion will occur does not receive compensation for hosting the event. The bill also allows a brewer or wholesaler to conduct its own sweepstakes, contest, or promotion on the premises of a retailer if these same conditions are satisfied.
Another exception allows a brewer that produces 350,000 or more barrels of fermented malt beverages annually to make contributions to national or statewide trade associations of retailers. This bill allows any brewer or wholesaler to make contributions to national, statewide, or local trade associations of retailers. This would include allowing brewers or wholesalers to join local tavern leagues.
Administrative dissolution of limited liability company
This bill authorizes DFI to administratively dissolve a limited liability company if any of the following occur: the limited liability company does not pay, within one year, any fees or penalties due DFI; the limited liability company is without a registered agent or registered office in this state for at least one year; and the limited liability company does not notify DFI within one year that its registered agent or registered office has been changed, that its registered agent has resigned, or that its registered office has been discontinued.
Unclaimed property
Under Wisconsin's version of the Uniform Unclaimed Property Act (UUPA), certain types of property are presumed to be abandoned if the owner of the property fails to take steps to evidence ownership within a specified time period (dormancy period). With certain limited exceptions, the holder of property that is presumed to be abandoned must report and deliver the property to the state treasurer every other year. With certain limited exceptions, the treasurer must sell the property within three years after the date on which the treasurer receives the property. If the property is a security other than a stock (for example, a stock option or an interest in a limited partnership), the treasurer must hold the security for at least one year before selling it, unless it is in the best interest of the state to do otherwise. Except for amounts sufficient to cover possible claims and the treasurer's administrative expenses, the treasurer currently deposits the clear proceeds of the sale of delivered property in the school fund.
