Data and Analytical Methodologies
DATCP analyzed the APSF fiscal year 2014 reports to estimate the projected overall fund balance expected on May 31, 2015. DATCP reviewed 2014 financial statements filed by contractors to determine a range of grain dealer and grain warehouse keeper fund assessments due for the license year beginning September 1, 2015.
DATCP Contact
Questions and comments (including hearing comments) related to this rule may be directed to:
David Woldseth
Department of Agriculture, Trade and Consumer Protection
P.O. Box 8911
Madison, WI 53708-8911
Telephone (608) 224-5164
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Finding of emergency
(1) In Wisconsin, grain dealers (persons who buy producer grain or markets producer grain as a producer agent) and grain warehouse keepers (persons who operate one or more grain warehouses) must obtain a license to purchase or hold grain, respectively, and are collectively referred to as “contractors”. Most contractors are “contributing contractors”, which means they must pay annual assessments into the Wisconsin Agricultural Producer Security Fund. This fund is designed to help partially reimburse producers in the event that a contractor defaults on payment to producers or fails to return stored grain to producers. The annual assessments are calculated based on the total dollar value of commodities purchased or stored, the length of time that the contractor has participated in the fund, and certain financial ratios from the contractor’s balance sheet.
(2) The grain contractor license years begin on September 1 of each year. At that point, DATCP calculates the assessment for the new license year that will be due for each contractor, and determines if a given contractor meets exemption requirements established under ATCP 99.126 (5) or 99.235 (4), Admin. Code., for that license year. Current exemption requirements are: the grain contractor was classified as a contributing grain contractor in each of the 5 license years immediately preceding that license year; the fund balance attributable to grain contractors was at least $3 million on May 31 of the preceding license year; and, the overall fund balance was at least $11 million on May 31 of the preceding license year.
(3) The overall fund balance is expected to be less than $7.7 million on the next assessment date of May 31, 2015, due to a large claim brought against the fund in 2014 by vegetable producers. This decrease in the overall fund balance would eliminate eligibility for fund assessment exemption for every grain contractor over the next 6-7 years, costing the industry $250,000 - $300,000 annually.
(4) This temporary emergency rule is necessary to protect the welfare of the hundreds of grain contractors who do business in Wisconsin, and to help prevent undue financial burdens upon the grain industry.
Emergency rule
Section 1. ATCP 99.126 (5) (c) is amended to read:
ATCP 99.126 (5) (c) The overall fund balance was at least $11 $5 million on May 31 of the last preceding license year.
Section 2. ATCP 99.235 (4) (c) is amended to read:
ATCP 99.235 (4) (c) The overall fund balance was at least $11 $5 million on May 31 of the last preceding license year.
Section 3. Effective Date: This emergency rule takes effect on September 1, and remains in effect for 150 days. The department may seek to extend this emergency rule as provided in s. 227.24, Stats.
