Amendment AA1-ASA1-SB55

SB55-ASA1-AA1,906,11 1. The milk contractor's existing security falls below the amount required under sub. (3) for any reason, including depreciation in the value of the security, increased obligations to milk producers or producer agents, or the cancellation of any security filed with the department.

SB55-ASA1-AA1,906,13 2. The milk contractor fails to provide required information that is relevant to a determination of security requirements.

SB55-ASA1-AA1,906,18 (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-AA1,906,21 (c) A milk contractor may request a hearing, under ch. 227, on a demand for security under par. (b). A request for hearing does not automatically stay a security demand.

SB55-ASA1-AA1,907,5 (d) If a milk contractor fails to comply with the department's demand for security under this subsection, the milk contractor shall give written notice of that fact to all milk producers and producer agents from whom the contractor procures producer milk in this state. If the milk contractor fails to give accurate notice under this paragraph within 5 days after the deadline for filing security under par. (b) has passed, the department shall promptly notify milk producers and producer agents by publishing a class 3 notice under ch. 985. The department may also give individual notice to those milk producers or producer agents of whom the department is aware.

SB55-ASA1-AA1,907,7 (e) If a milk contractor fails to comply with the department's demand for security under this subsection, the department may do any of the following:

SB55-ASA1-AA1,907,8 1. Issue a summary order under s. 126.85 (2).

SB55-ASA1-AA1,907,9 2. Suspend or revoke the milk contractor's license.

SB55-ASA1-AA1,907,11 (7) Releasing security. (a) The department may release security filed under sub. (1) if any of the following applies:

SB55-ASA1-AA1,907,16 1. The milk contractor reports not more than $1,500,000 in milk payroll obligations under s. 126.41 (6) (a) for at least 2 consecutive years and the milk contractor pays the quarterly fund assessment that would have been required of the milk contractor if the milk contractor had been a contributing milk contractor on the most recent quarterly installment date under s. 126.46 (6).

SB55-ASA1-AA1,907,21 2. The milk contractor's annual financial statement under s. 126.44 shows positive equity for at least 2 consecutive years and the milk contractor pays the quarterly fund assessment that would have been required of the milk contractor if the milk contractor had been a contributing milk contractor on the most recent quarterly installment date under s. 126.46 (6).

SB55-ASA1-AA1,907,23 (b) On August 1, 2002, the department may release security maintained under sub. (2), unless the milk contractor is required to file security under sub. (1).

SB55-ASA1-AA1,907,25 (c) The department may release security to the extent that the security exceeds the amount required under sub. (3).

SB55-ASA1-AA1,908,2 (d) The department may release security if the milk contractor files alternative security, of equivalent value, that the department approves.

SB55-ASA1-AA1,908,4 (e) The department shall release security if the milk contractor has gone out of business and paid all milk payroll obligations in full.

SB55-ASA1-AA1,908,12 126.48 Milk contractors; payments to producers. (1) First monthly payment. By the 4th day of each month, a milk contractor shall pay for producer milk received during the first 15 days of the preceding month. The milk contractor shall base the payment on an estimated price that is at least 80% of the class III price published by the regional federal milk market administrator for the month preceding the month in which the milk is received, or 80% of the contract price, whichever is greater. This subsection does not apply to a qualified producer agent who complies with sub. (4).

SB55-ASA1-AA1,908,16 (2) Second monthly payment. By the 19th day of each month, a milk contractor shall pay the balance due for producer milk received during the preceding month. This subsection does not apply to a qualified producer agent who complies with sub. (4).

SB55-ASA1-AA1,908,20 (3) Payment explanation. The department may, by rule, require a milk contractor to provide a milk producer or producer agent with a written explanation of each payment under this section. The department may specify the content of the explanation, including information related to any of the following:

SB55-ASA1-AA1,908,21 (a) Milk contractor identification.

SB55-ASA1-AA1,908,22 (b) Milk producer or producer agent identification.

SB55-ASA1-AA1,908,23 (c) Pay period.

SB55-ASA1-AA1,908,24 (d) Volume of milk received.

SB55-ASA1-AA1,908,25 (e) Grade of milk.

SB55-ASA1-AA1,909,1 (f) Milk test results.

SB55-ASA1-AA1,909,2 (g) Milk price and adjustments.

SB55-ASA1-AA1,909,3 (h) Gross amount due.

SB55-ASA1-AA1,909,4 (i) Average gross pay per hundredweight less hauling charges.

SB55-ASA1-AA1,909,5 (j) Net amount due.

SB55-ASA1-AA1,909,6 (k) Deductions and assignments.

SB55-ASA1-AA1,909,12 (4) Qualified producer agents. (a) By the last day of each month, a qualified producer agent shall pay for producer milk received during the first 10 days of that month. The qualified producer agent shall base the payment on an estimated price that is at least 80% of the class III price published by the regional federal milk market administrator for the month preceding the month in which the milk is received, or 80% of the contract price, whichever is greater.

SB55-ASA1-AA1,909,18 (b) By the 10th day of each month, a qualified producer agent shall pay for producer milk received from the 11th day to the 20th day of the preceding month. The qualified producer agent shall base the payment on an estimated price that is at least 80% of the class III price published by the regional federal milk market administrator for the month preceding the month in which the milk is received, or 80% of the contract price, whichever is greater.

SB55-ASA1-AA1,909,20 (c) By the 20th day of each month, a qualified producer agent shall pay the balance due for producer milk received during the preceding month.

SB55-ASA1-AA1,909,24 126.49 Milk contractors; records and reports. (1) Required records. A milk contractor shall keep accurate records and accounts of milk receipts, payments for milk received, and amounts owed to milk producers. The department may, by rule, specify records that a milk contractor must keep.

SB55-ASA1-AA1,910,3 (2) Required reports. The department may, by rule, require a milk contractor to file with the department periodic reports of information needed for the administration of this chapter.

SB55-ASA1-AA1,910,7 (3) Records retention; inspection. A milk contractor shall retain records required under sub. (1) for at least 6 years after the records are created. A milk contractor shall make the records available to the department for inspection and copying upon request.

SB55-ASA1-AA1,910,9 126.50 Milk contractors; prohibited practices. No milk contractor may do any of the following:

SB55-ASA1-AA1,910,11 (1) Falsify any record or account, or conspire with any other person to falsify a record or account.

SB55-ASA1-AA1,910,12 (2) Make any false or misleading representation to the department.

SB55-ASA1-AA1,910,15 (3) If the milk contractor is licensed under s. 126.41 (1), engage in any activity that is inconsistent with representations made in the milk contractor's annual license application.

SB55-ASA1-AA1,910,17 (4) Make any false or misleading representation to a milk producer or producer agent related to matters regulated under this chapter.

SB55-ASA1-AA1,910,19 (5) Fail to file the full amount of security required under s. 126.47 (6) by the date that the department specifies.

SB55-ASA1-AA1,910,24 126.51 Rules for qualified producer agents. The department shall promulgate rules specifying requirements for qualified producer agents, including a requirement that a qualified producer agent have a written contract with each milk producer from whom the qualified producer agent procures milk in this state and that the contract disclose all of the following:

SB55-ASA1-AA1,910,25 (1) That the producer agent does not take title to the milk producer's milk.

SB55-ASA1-AA1,911,1 (2) That the producer agent holds all milk receipts in trust for milk producers.

SB55-ASA1-AA1,911,4 (3) That the producer agent's obligations to milk producers are not secured or indemnified under this chapter to the same degree as are the obligations of other milk contractors.

SB55-ASA1-AA1,911,6 subchapter vI vegetable CONTRACTORS

SB55-ASA1-AA1,911,7 126.55 Definitions. In this subchapter:

SB55-ASA1-AA1,911,10 (1) "Cash on delivery" means cash payment of the full agreed price for processing vegetables at the time of delivery or, if the vegetables are graded, within 72 hours after the time of delivery.

SB55-ASA1-AA1,911,11 (2) "Cash payment" means payment in any of the following forms:

SB55-ASA1-AA1,911,12 (a) Currency.

SB55-ASA1-AA1,911,13 (b) A cashier's check, or a check that a bank issues and certifies.

SB55-ASA1-AA1,911,14 (c) A wire transfer.

SB55-ASA1-AA1,911,15 (d) Simultaneous barter.

SB55-ASA1-AA1,911,19 (3) "Contract obligation" means the net amount, whether paid or unpaid, that a vegetable contractor owes a vegetable producer or producer agent under a vegetable procurement contract. "Contract obligation" includes a net amount owed for unharvested acreage.

SB55-ASA1-AA1,911,24 (4) "Contributing vegetable contractor" means a vegetable contractor who is licensed under s. 126.56 (1), who either has paid one or more quarterly installments under s. 126.60 (6) or is required to contribute to the fund, but the first quarterly installment under s. 126.60 (6) is not yet due, and who is not disqualified under s. 126.59 (2).

SB55-ASA1-AA1,912,2 (6) "Current ratio" means the ratio of the value of current assets to the value of current liabilities, calculated according to s. 126.58 (6) (c) 1.

SB55-ASA1-AA1,912,4 (7) "Debt to equity ratio" means the ratio of the value of liabilities to equity, calculated according to s. 126.58 (6) (c) 2.

SB55-ASA1-AA1,912,7 (8) "Deferred payment contract" means a vegetable procurement contract in which the vegetable producer or a producer agent agrees to accept payment after January 31 for processing vegetables harvested during the previous calendar year.

SB55-ASA1-AA1,912,9 (9) "Disqualified vegetable contractor" means a vegetable contractor who is disqualified from the fund under s. 126.59 (2).

SB55-ASA1-AA1,912,10 (10) "Food processing" has the meaning given in s. 97.29 (1) (g).

SB55-ASA1-AA1,912,12 (10m) "License year" means the period beginning on February 1 and ending on the following January 31.

SB55-ASA1-AA1,912,16 (11) "Processing vegetables" means vegetables grown or sold for use in food processing, regardless of whether those vegetables are actually harvested or processed as food. "Processing vegetables" includes sweet corn grown or sold for use in food processing, but does not include grain.

SB55-ASA1-AA1,912,20 (12) "Producer agent" means a person who, without taking title to vegetables, acts on behalf of a vegetable producer to market or accept payment for processing vegetables that the vegetable producer grows in this state. "Producer agent" does not include any of the following:

SB55-ASA1-AA1,912,23 (a) A person who merely brokers a contract between a vegetable producer and a vegetable contractor, without becoming a party to the contract or accepting payment on behalf of the vegetable producer.

SB55-ASA1-AA1,913,3 (b) A person who merely holds or transports processing vegetables for a vegetable producer, without marketing the vegetables or accepting payment on behalf of the vegetable producer.

SB55-ASA1-AA1,913,5 (13) "Time of delivery" under a vegetable procurement contract means the time at which one of the following occurs:

SB55-ASA1-AA1,913,6 (a) The vegetable contractor harvests the vegetables.

SB55-ASA1-AA1,913,8 (b) The vegetable producer delivers harvested vegetables to the custody or control of the vegetable contractor.

SB55-ASA1-AA1,913,10 (c) The vegetable contractor notifies the vegetable producer of the vegetable contractor's refusal to harvest or accept delivery of vegetables.

SB55-ASA1-AA1,913,11 (14) "Vegetable contractor" means a person who does any of the following:

SB55-ASA1-AA1,913,13 (a) Contracts with a vegetable producer or a producer agent to procure processing vegetables that a vegetable producer grows in this state.

SB55-ASA1-AA1,913,15 (b) Contracts with a vegetable producer to market, as a producer agent, processing vegetables that the vegetable producer grows in this state.

SB55-ASA1-AA1,913,17 (15) "Vegetable procurement contract" means an oral or written agreement under which a vegetable contractor does any of the following:

SB55-ASA1-AA1,913,19 (a) Contracts with a vegetable producer or a producer agent to procure processing vegetables that a vegetable producer grows in this state.

SB55-ASA1-AA1,913,21 (b) Contracts with a vegetable producer to market, as a producer agent, processing vegetables that the vegetable producer grows in this state.

SB55-ASA1-AA1,913,23 (16) "Vegetable producer" means a person who grows processing vegetables in this state.

SB55-ASA1-AA1,914,3 (17) "Unharvested acreage" means land on which vegetables are grown, under a vegetable procurement contract, that a vegetable contractor leaves unharvested for any reason. "Unharvested acreage" includes all of the following:

SB55-ASA1-AA1,914,5 (a) Land on which the vegetables are suitable for processing, but are not harvested.

SB55-ASA1-AA1,914,7 (b) Land on which the vegetables are abandoned as being unsuitable for processing.

SB55-ASA1-AA1,914,10 126.56 Vegetable contractors; licensing. (1) License required. (a) Except as provided in sub. (2), no person may operate as a vegetable contractor without a current annual license from the department.

SB55-ASA1-AA1,914,12 (b) A license under par. (a) expires on the January 31 following its issuance. No person may transfer or assign a license issued under par. (a).

SB55-ASA1-AA1,914,14 (2) Exempt contractors. The following vegetable contractors are exempt from licensing under sub. (1):

SB55-ASA1-AA1,914,17 (a) A vegetable contractor who procures vegetables primarily for unprocessed, fresh market use and is licensed under the federal Perishable Agricultural Commodities Act, 7 USC 499a to 499t.

SB55-ASA1-AA1,914,19 (b) A restaurant or retail food establishment that procures processing vegetables solely for retail sale at the restaurant or retail food establishment.

SB55-ASA1-AA1,914,22 (3) License application. A vegetable contractor shall apply for a license under sub. (1) in writing, on a form provided by the department. The applicant shall provide all of the following:

SB55-ASA1-AA1,914,24 (a) The applicant's legal name and any trade name under which the applicant proposes to operate as a vegetable contractor.

SB55-ASA1-AA1,915,5 (b) A statement of whether the applicant is an individual, corporation, partnership, cooperative, limited liability company, trust, or other legal entity. If the applicant is a corporation or cooperative, the application shall identify each officer of the corporation or cooperative. If the applicant is a partnership, the application shall identify each partner.

SB55-ASA1-AA1,915,7 (c) The mailing address of the applicant's principal business location and the name of a responsible individual who may be contacted at that address.

SB55-ASA1-AA1,915,10 (d) The street address of each business location from which the applicant operates as a vegetable contractor in this state and the name of a responsible individual who may be contacted at each location that is staffed.