Statutes interpreted: Chapter
126, Stats.
The Department of Agriculture, Trade and Consumer Protection (“DATCP") administers the agricultural producer security program under ch.
126, Stats. DATCP has broad general authority, under s.
93.07 (1), Stats., to adopt rules related to programs under its jurisdiction. DATCP has specific authority under ch.
126, Stats., to adopt rules for the agricultural producer security program.
This rule modifies current rules related to the agricultural producer security program under ch.
126, Stats. The program is designed to protect agricultural producers from catastrophic financial defaults by grain dealers, grain warehouse keepers, milk contractors and vegetable contractors (collectively referred to as “contractors") who procure agricultural commodities from producers.
This rule does all of the following:
• It permits a licensed contractor
s to file voluntary security for the benefit of producers if the contractor's estimated default exposure exceeds the maximum amount payable from the Wisconsin agricultural producer security fund. A contractor who files voluntary security may pay lower fund assessments and make more favorable disclosures to producers. A voluntary security filing does not relieve a contractor of any other duty to file security or pay fund assessments.
• It changes and simplifies the disclosures that contractors must give to producers.
• It clarifies current grain warehouse keeper record keeping requirements.
Background. Under current law, contractors must be licensed by DATCP. Most contractors must contribute to an agricultural producer security fund (the “fund"). Fund assessments are based on contractor size, financial condition and risk practices. If a contributing contractor defaults, DATCP will pay producers out of the fund. The total payment may not exceed 60% of the fund balance at the time of default (the current fund balance is approximately $5.5 million).
The current fund capacity is adequate to cover most, but not all, potential defaults by contributing contractors. Some large contractors have an “estimated default exposure" that exceeds current fund capacity (in some cases, by a very large amount). Some of these contractors are currently required to file security to cover at least part of the difference, but others are not (DATCP lacks statutory authority to require security filings for some of the contractors).
Voluntary Security. Under this rule, a licensed contractor may file voluntary security with DATCP if the contractor's estimated default exposure exceeds the maximum amount payable from the fund (this rule does not change current mandatory security filing requirements). A contractor who files security with DATCP may pay lower fund assessments and make more favorable disclosures to producers.
Reduced Fund Assessment. Under current rules, certain contractors who file security with DATCP are entitled to a reduction in their annual fund assessments (current rules specify the amount of the reduction). Under this rule, certain contractors who file security with DATCP (required or voluntary) may pay reduced fund assessments if their “estimated default exposure" is equal to or less than the sum of the following:
• The maximum amount payable from the fund, if the contractor defaults.
• The total amount of security (required or voluntary) filed by the contractor.
Disclosures to Producers. Under current rules, a contractor must periodically disclose to producers the contractor's license, security and fund contribution status. The current rules specify the exact language that contractors must use. The disclosures are intended to help producers assess the degree of financial risk involved in dealing with any particular contractor. The current disclosures are rather complex, and in some cases overstate the amount of security coverage afforded to producers.
This rule changes and simplifies the current disclosure requirements. This rule, like the current rules, specifies the exact language to be used. Disclosure requirements vary slightly between grain, milk and vegetable contractors, because of differences in the security program for each industry. But for all contractors, the disclosure alternatives are basically as follows:
• If the contractor's “estimated default exposure" is equal to or less than the amount of fund coverage and security on file, the disclosure states that the security program may provide full compensation for producers if the contractor defaults (subject to statutory limits).
• If the contractor's “estimated default exposure" is greater than the amount of fund coverage and security on file, the disclosure states that the security program may provide some compensation for producers if the contractor defaults. But compensation may cover only a fraction of a producer's loss.
• If the contractor does not contribute to the fund or file any security with DATCP, the disclosure states that the security program will provide no compensation to producers if the contractor defaults.
Definition of “Affiliate". Under current rules, contractor financial statements must disclose accounts and notes payable from “affiliates." These accounts and notes are excluded from the balance sheet before financial ratios are calculated. An “affiliate" is currently defined as an owner, major stockholder, partner, officer, director, member, employee or agent (or a person owned, controlled or operated by one of those persons). This rule clarifies an “affiliate" also includes any other person who has significant control or influence over the contractor.
Grain Warehouse Records. This rule clarifies current grain warehouse record keeping requirements. Under current law, warehouse keepers must keep “daily position" records related to grain in storage. This rule clarifies that daily position records must identify all grain kept by the warehouse keeper, whether in licensed or unlicensed storage. Records must clearly distinguish between grain owned by the warehouse keeper and that held for others. Records must also show the amount of grain entering and leaving storage each day. Records must be based on individual grain transaction records required under current law.
Fiscal Impact
This rule will have no significant fiscal impact on DATCP or local government.
Business Impact
This rule will affect agricultural producers, grain dealers, grain warehouse keepers, milk contractors and vegetable contractors. Many of these businesses are small businesses.
This rule will have a minimal impact on most affected businesses, and effects will be positive in many cases (especially for agricultural producers). The Wisconsin legislature has spelled out detailed statutory requirements for grain dealers, grain warehouse keepers, milk contractors and vegetable contractors (ch.
126, Stats.). DATCP has limited authority to change these requirements by rule.
This rule will make minor changes to current rules. Among other things, this rule:
• Allows licensed contractors to file voluntary security (it does not change current mandatory security requirements).
• Allows some contractors to pay reduced fund assessments.
• Changes and simplifies current contractor disclosures to producers. In some cases, current disclosures overstate the amount of security coverage afforded to producers. Some contractors may incur one-time costs to change their disclosure forms.
• Clarifies current grain warehouse record keeping requirements (this rule does not add major new record keeping requirements).
This rule will not have a significant adverse economic impact on small business. Therefore, it is not subject to the delayed small business effective date provision in s.
227.22 (2) (e), Stats.
Under
2003 Wis. Act 145, DATCP and other agencies must adopt rules spelling out their rule enforcement policy for small businesses. DATCP has not incorporated a small business enforcement policy in this rule, but it will propose a separate rule on that subject. DATCP will, to the maximum extent feasible, seek voluntary compliance with this rule.
Wisconsin's Security Program
Wisconsin has an agricultural producer security program for grain, milk and vegetables. The Wisconsin legislature has spelled out detailed statutory requirements for grain dealers, grain warehouse keepers, milk contractors and vegetable contractors (ch.
126, Stats.). Contractors must be licensed by DATCP, and most contractors must contribute to an agricultural producer security fund administered by DATCP. A few contractors must also file security with DATCP.
Federal Programs
There is no federal producer security program related to milk. The U.S. department of agriculture (USDA) administers a producer security program for federally licensed grain warehouses that store grain for producers. Grain warehouses may choose whether to be licensed under state or federal law. Federally-licensed warehouses are exempt from state warehouse licensing and security requirements. State-licensed warehouses are likewise exempt from federal requirements.
The federal grain warehouse program provides little or no protection against financial defaults by grain dealers. Grain dealers are persons who buy and sell grain. Sometimes, grain dealers also operate grain warehouses. DATCP currently licenses grain dealers. Licensed warehouse keepers must also hold a state grain dealer license if they engage in grain dealing.
USDA proposes to regulate grain dealer activities (grain “merchandising") by federally licensed warehouse keepers, to the exclusion of state regulation. But USDA has not yet finalized its regulations. In any case, the federal regulations would not apply to state-licensed grain warehouses, or to grain dealers who do not operate a warehouse.
There is a federal security program for vegetables. This security program is mainly limited to fresh market vegetables, and consists of a priority lien against vegetable-related assets. Wisconsin's vegetable security program applies only to processing vegetables (not fresh market vegetables covered by federal regulations). There may be some limited overlap between the Wisconsin and federal programs (the overlap may be justified because the scope of federal coverage is not entirely clear).
State Comparisons
In Minnesota, contractors must be licensed to procure grain, milk or processing vegetables from producers, or to operate grain warehouses. Regulated contractors must file bonds as security against default.
Neither Iowa nor Illinois have producer security programs for milk or vegetables. However, both states maintain indemnity funds to protect grain producers. Fund assessments are based solely on grain volume. In Wisconsin, by contrast, fund assessments are based on grain volume and financial condition.
Michigan has the following producer security programs:
• Potato dealers must be licensed, and must post bonds as security against defaults. (Wisconsin's vegetable security program includes, but is not limited to, potatoes.)
• Dairy plants that fail to meet minimum financial standards must file security or pay cash for milk.
• Grain producers have the option of paying premiums into a state fund. In the event of a grain default, the fund reimburses participating producers.
Agency Contact
Questions or comments related to this rule may be sent to the following address:
Dept. of Agriculture, Trade and Consumer Protection
Trade and Consumer Protection Division
Bureau of Trade Practices
P.O. Box 8911
Madison, WI 53708-8911
Notice of Hearing
Natural Resources
(Fish, Game, etc., Chs.
NR 1—)
NOTICE IS HEREBY GIVEN that pursuant to ss.
29.014 (1) and
227.11 (2) (a), Stats., interpreting ss.
29.041 (1),
29.192 and
29.237, Stats., the Department of Natural Resources will hold a public hearing on revisions to ss.
NR 20.10 and
20.20, Wis. Adm. Code, relating to regulations for the Lake Winnebago sturgeon spearing season. The proposed rule contains the following changes to the Lake Winnebago system sturgeon spearing rules:
1. Upriver lakes: creates a random-permit drawing system for an annual sturgeon spear fishery on the upriver lakes beginning in 2007.
2. “Fast start" season 100% closure trigger: beginning in 2006, allows the spearing season to be closed at the end of a spearing day should any one of the three harvest caps (juvenile females, adult females, males) be reached or exceeded that day.
3. “Slow finish" season 90% closure trigger: beginning in 2006, increases the season closure trigger from 80% to 90%.
NOTICE IS HEREBY FURTHER GIVEN that pursuant to s.
227.114, Stats., it is not anticipated that the proposed rule will have an economic impact on small businesses. The Department's Small Business Regulatory Coordinator may be contacted at:
SmallBusinessReg.Coordinator@dnr.state.wi.us
or by calling (608) 266-1959.
NOTICE IS HEREBY FURTHER GIVEN that the Department has made a preliminary determination that this action does not involve significant adverse environmental effects and does not need an environmental analysis under ch.
NR 150, Wis. Adm. Code. However, based on the comments received, the Department may prepare an environmental analysis before proceeding with the proposal. This environmental review document would summarize the Department's consideration of the impacts of the proposal and reasonable alternatives.
NOTICE IS HEREBY FURTHER GIVEN that the hearing will be held on:
August 17, 2005 Meeting Room A
Wednesday at 7:00 p.m. Winnebago Co. Coughlin Bldg.
625 E. County Rd. Y
Oshkosh
NOTICE IS HEREBY FURTHER GIVEN that pursuant to the Americans with Disabilities Act, reasonable accommodations, including the provision of information material in an alternative format, will be provided for qualified individuals with disabilities upon request. Please call Joe Hennessy at (608) 267-0548 with specific information on your request at least 10 days before the date of the scheduled hearing.
Fiscal Estimate
This rule calls for implementation of a random permit-drawing system to distribute sturgeon spearing licenses for Lakes Poygan, Winneconne, and Butte des Morts (the “Upriver Lakes") in the Lake Winnebago System. This drawing system will enable the Department to create an annual, limited-access sturgeon spear fishery in the Upriver Lakes while preserving the traditional open-access sturgeon spear fishery in Lake Winnebago. Currently the upriver lakes are only open to spearing every 5th year.
There are developmental costs associated with creating the application form, modifying the ALIS system to incorporate permit applications, and tools to track and recall permit application status ($10,000, based on Bureau of Customer Service and Licensing estimates). Cost estimates for creating a drawing system, maintaining the applicant database and conducting the annual drawing are expected to be approximately $1120 for creation (40 hours time, Staff Specialist $28/hour) and $1120 annually for maintenance and conducting the drawing (40 hours time, Staff Specialist).
A $3 application fee will be charged to each applicant who makes an Upriver Lakes permit request. This fee will recoup the costs of permit and license issuance; estimates are based on 2000 applications annually ($6000 revenue, $6000 expense). Postcards ($0.50/ ea, including printing, postage, and handling) will be sent to approximately 800 successful applicants annually ($400). Sturgeon spearing carcass tags are $20 for both Lake Winnebago and the Upriver Lakes. Development, implementation, and maintenance of the permit-drawing system will be paid for by sturgeon license funds.
Written Comments and Copy of Rule
The proposed rule and fiscal estimate may be reviewed and comments electronically submitted at the following Internet site: adminrules.wisconsin.gov. Written comments on the proposed rule may be submitted via U.S. mail to Joe Hennessy, Bureau of Fisheries Management and Habitat Protection, P.O. Box 7921, Madison, WI 53707. Comments may be submitted until August 23, 2005. Written comments whether submitted electronically or by U.S. mail will have the same weight and effect as oral statements presented at the public hearing. A personal copy of the proposed rule and fiscal estimate may be obtained from Mr. Hennessy.
Notice of Hearing
Natural Resources
(Fish, Game, etc., Chs.
NR 1—)
NOTICE IS HEREBY GIVEN that pursuant to ss.
29.014 (1),
29.041,
29.547 (8) (a) and
227.11 (2) (a), Stats., interpreting ss.
29.041,
29.014 (1) and
29.537 (8) (a), Stats., the Department of Natural Resources will hold public hearings on the amendment of s.
NR 24.06 (1) (a) and
(b), Wis. Adm. Code, relating to closing the open seasons for commercial clamming on the Wisconsin-Iowa boundary waters and the Mississippi River portion of the Wisconsin-Minnesota boundary waters. Wisconsin's commercially harvestable native freshwater mussel stocks are in significant decline, especially in waters infested with zebra mussels. Surveys done since 1998 in river reaches where mussels were historically harvested have demonstrated extreme reductions in population densities and near absence of recruitment. These recent stock reductions compound reductions documented since 1980 from commercial overharvest and mussel kills. No commercial licenses have been sold since 2001 when a single license was sold.
NOTICE IS HEREBY FURTHER GIVEN that pursuant to s.
227.114, Stats., it is not anticipated that the proposed rule will have an economic impact on small businesses. The Department's Small Business Regulatory Coordinator may be contacted at:
SmallBusinessReg.Coordinator@dnr.state.wi.us
or by calling (608) 266-1959.
NOTICE IS HEREBY FURTHER GIVEN that the Department has made a preliminary determination that this action does not involve significant adverse environmental effects and does not need an environmental analysis under ch.
NR 150, Wis. Adm. Code. However, based on the comments received, the Department may prepare an environmental analysis before proceeding with the proposal. This environmental review document would summarize the Department's consideration of the impacts of the proposal and reasonable alternatives.
NOTICE IS HEREBY FURTHER GIVEN that the hearings will be held on:
August 16, 2005 Robers Room
Tuesday at 11:00 a.m. Todd Wehr Memorial Library
815 S. 9th Street
La Crosse
August 16, 2005 Conference Room #2
Tuesday at at 5:00 p.m. City Hall
214 E. Blackhawk
Prairie du Chien
(Use back entrance)
NOTICE IS HEREBY FURTHER GIVEN that pursuant to the Americans with Disabilities Act, reasonable accommodations, including the provision of information material in an alternative format, will be provided for qualified individuals with disabilities upon request. Please call Joe Hennessy at (608) 267-0548 with specific information on your request at least 10 days before the date of the scheduled hearing.
Fiscal Estimate
No commercial clam shelling licenses have been sold since 2001. The official closure of the commercial clam shelling season will have no fiscal impact on state or local government revenues or expenditures.
Written Comments and Copy of Rule
The proposed rule and fiscal estimate may be reviewed and comments electronically submitted at the following Internet site: adminrules.wisconsin.gov. Written comments on the proposed rule may be submitted via U.S. mail to Joe Hennessy, Bureau of Fisheries Management and Habitat Protection, P.O. Box 7921, Madison, WI 53707. Comments may be submitted until September 1, 2005. Written comments whether submitted electronically or by U.S. mail will have the same weight and effect as oral statements presented at the public hearings. A personal copy of the proposed rule and fiscal estimate may be obtained from Mr. Hennessy.
Notice of Hearing
Natural Resources
(Fish, Game, etc., Chs.
NR 1—)
