Amendment AA1-ASA1-SB55

SB55-ASA1-AA1,941,20 (b) A depositor who is either a grain producer or a producer agent, as defined in s. 126.10 (13), and who claims that a grain warehouse keeper has failed to return stored grain or its equivalent upon demand.

SB55-ASA1-AA1,941,23 (c) A milk producer or producer agent, as defined in s. 126.40 (13), who claims that a milk contractor has failed to pay, when due, for producer milk procured in this state.

SB55-ASA1-AA1,942,3 (d) A vegetable producer or producer agent, as defined in s. 126.55 (12), who claims that a vegetable contractor has failed to make payment when due under a vegetable procurement contract.

SB55-ASA1-AA1,942,8 (2) Filing default claims. A claimant shall file a default claim under sub. (1) within 30 days after the claimant first learns of the default, subject to sub. (3). The claimant shall specify the nature and amount of the default. The department may investigate the alleged default and may require the claimant to provide supporting documentation.

SB55-ASA1-AA1,942,13 (3) Initiating a recovery proceeding. (a) The department may initiate a recovery proceeding in response to one or more default claims under sub. (1). The department shall issue a written notice announcing the recovery proceeding. The department shall mail or deliver a copy of the notice to the contractor and each claimant in the proceeding.

SB55-ASA1-AA1,942,17 (b) If the department has reason to believe that other persons may have default claims under sub. (1) against the same contractor, the department may invite those persons to file their claims in the recovery proceeding. The department may publish the invitation in any of the following ways:

SB55-ASA1-AA1,942,18 1. By posting it at the contractor's place of business.

SB55-ASA1-AA1,942,19 2. By publishing it as a class 3 notice under ch. 985.

SB55-ASA1-AA1,942,21 3. By mailing or delivering it to prospective claimants known to the department.

SB55-ASA1-AA1,942,22 4. By other means that the department considers appropriate.

SB55-ASA1-AA1,943,2 (c) In its invitation under par. (b), the department may specify a deadline date and a procedure for filing default claims. An invitation may indicate the amount of a prospective claimant's apparent claim and may ask the prospective claimant to verify or correct that amount.

SB55-ASA1-AA1,943,4 (d) The department may initiate separate recovery proceedings for default claims that comply with sub. (2) but are filed after the deadline date under par. (c).

SB55-ASA1-AA1,943,7 (4) Auditing claims. The department shall audit each claim included in a recovery proceeding. The department shall disallow a claim if the department finds any of the following:

SB55-ASA1-AA1,943,8 (a) That the claim is false or not adequately documented.

SB55-ASA1-AA1,943,11 (b) That the claimant filed the claim more than 30 days after the claimant first learned of the contractor's default, unless the department specifies a later claim-filing deadline under sub. (3) (c).

SB55-ASA1-AA1,943,14 (c) That the claimant, without any contractual obligation to do so, continued to deliver grain, milk, or vegetables to the defaulting contractor more than 10 days after the claimant first learned of the contractor's default.

SB55-ASA1-AA1,943,16 (d) That the claimant failed to comply with claim-filing deadlines or procedures specified under sub. (3) (c).

SB55-ASA1-AA1,943,18 (e) That the person filing the claim is not an authorized claimant under sub. (1).

SB55-ASA1-AA1,943,23 (5) Allowed claim amounts. (a) The department shall determine the amount of an allowed claim based on the contract between the parties. If the contract terms are unclear, the department may determine the allowed claim amount based on local market prices, applicable milk marketing order prices, customs in the trade, or other evidence that the department considers appropriate.

SB55-ASA1-AA1,944,2 (b) Notwithstanding par. (a), if the default involves a grain warehouse keeper's failure to return stored grain to a depositor upon demand, the department shall calculate the value of the grain based on local market prices on the day on which the depositor made the demand.

SB55-ASA1-AA1,944,5 (c) The department shall subtract from the allowed claim amount any offsetting payments made by the contractor and any obligations for which the claimant is liable to the contractor.

SB55-ASA1-AA1,944,9 (6) Proposed decision. After the department completes its audit under sub. (4), the department shall issue a proposed decision. The department shall mail or deliver a copy of the proposed decision to the contractor and each claimant. The department shall do all of the following in the proposed decision:

SB55-ASA1-AA1,944,11 (a) Specify proposed findings of fact, proposed conclusions of law, and a proposed order.

SB55-ASA1-AA1,944,13 (b) Allow or disallow each default claim and specify the amount of each allowed claim. The department may disallow part of a claim.

SB55-ASA1-AA1,944,15 (c) Specify, for each allowed claim, the amount that the department is authorized to pay under s. 126.71.

SB55-ASA1-AA1,944,17 (d) Specify the method, under s. 126.71, by which the department will pay the authorized amounts under par. (c).

SB55-ASA1-AA1,944,19 (e) Explain a claimant's right under s. 126.87 (4) to seek court recovery of that portion of an allowed claim that is not paid by the department.

SB55-ASA1-AA1,944,21 (f) Specify a date by which the contractor or claimant may file written objections to the proposed decision.

SB55-ASA1-AA1,945,2 (7) Final decision if no objections. If no contractor or claimant files a timely written objection to the proposed decision under sub. (6), the department may issue the proposed decision as the department's final decision in the recovery proceeding, without further notice or hearing. The department shall mail or deliver a copy of the final decision to the contractor and each claimant.

SB55-ASA1-AA1,945,9 (8) Objections to proposed decision; notice, hearing, and final decision. (a) If a contractor or claimant files a timely written objection to the proposed decision under sub. (6), the department shall hold a public hearing on the objection. The department shall follow applicable contested case procedures under ch. 227. The department may hear all objections in a single proceeding. At the conclusion of the contested case proceeding, the department shall issue a final decision affirming or modifying the proposed decision under sub. (6).

SB55-ASA1-AA1,945,12 (b) The department may issue a final decision under sub. (7) related to default claims that are not affected by objections under par. (a), regardless of whether the department has completed the contested case proceeding under par. (a).

SB55-ASA1-AA1,945,15 126.71 Paying default claims. (1) Claims against contributing contractor. Except as provided in sub. (2) or (3), the department shall pay from the appropriate sources under s. 126.72 the following default claim amounts:

SB55-ASA1-AA1,945,18 (a) Except as provided in par. (d) or (e), for each default claim allowed under s. 126.70 against a grain dealer or milk contractor who was a contributing contractor when the default occurred:

SB55-ASA1-AA1,945,19 1. Eighty percent of the first $60,000 allowed.

SB55-ASA1-AA1,945,20 2. Seventy-five percent of any amount allowed in excess of $60,000.

SB55-ASA1-AA1,945,23 (b) For each default claim allowed under s. 126.70 against a grain warehouse keeper who was a contributing contractor when the default occurred, 100% of the first $100,000 allowed.

SB55-ASA1-AA1,945,25 (c) For each default claim allowed under s. 126.70 against a vegetable contractor who was a contributing contractor when the default occurred:

SB55-ASA1-AA1,946,1 1. Ninety percent of the first $40,000 allowed.

SB55-ASA1-AA1,946,2 2. Eighty-five percent of the next $40,000 allowed.

SB55-ASA1-AA1,946,3 3. Eighty percent of the next $40,000 allowed.

SB55-ASA1-AA1,946,4 4. Seventy-five percent of any amount allowed in excess of $120,000.

SB55-ASA1-AA1,946,8 (d) For each default claim allowed under s. 126.70 against a qualified producer agent who, at the time of the default, was a contributing contractor and maintained security under s. 126.47 (3) (c), if the default occurs after April 30, 2002, and before May 1, 2004, 15% of the amount allowed.

SB55-ASA1-AA1,946,12 (e) For each default claim allowed under s. 126.70 against a qualified producer agent who, at the time of the default, was a contributing contractor and maintained security under s. 126.47 (3) (c), if the default occurs after April 30, 2004, and before May 1, 2007, 20% of the amount allowed.

SB55-ASA1-AA1,946,14 (1m) When default occurs. For the purposes of this chapter, a default occurs on the date on which payment or delivery becomes overdue.

SB55-ASA1-AA1,946,18 (2) Claims against contractor who has filed security. If the department allows default claims under s. 126.70 against a contractor who has security on file with the department, the department shall convert that security and use the proceeds as follows:

SB55-ASA1-AA1,946,23 (a) If the contractor was not a contributing contractor when the default occurred, the department shall use the security proceeds to pay the full amount of the allowed claims, except that, if the security is not adequate to pay the full amount of the allowed claims, the department shall pay claimants on a prorated basis in proportion to their allowed claims.

SB55-ASA1-AA1,947,6 (b) If the contractor was a contributing contractor when the default occurred, the department shall use the security proceeds to reimburse the sources under s. 126.72 from which the department makes any claim payment under sub. (1). If the security amount exceeds the amount payable under sub. (1) from the sources under s. 126.72, the department shall use the remaining security proceeds to pay the balance of the allowed claims. If the security amount is not adequate to pay the full remaining balance, the department shall pay claimants on a prorated basis in proportion to their allowed claims.

SB55-ASA1-AA1,947,15 (c) Notwithstanding par. (b), if the contractor was a contributing contractor when the default occurred, the department may, at its discretion, pay claims directly from security proceeds rather than from a fund source under s. 126.72. If the department acts under this paragraph, the department shall first pay claims in the amounts provided in sub. (1). If the security amount exceeds the amount payable under sub. (1) from the sources under s. 126.72, the department shall use the remaining security proceeds to pay the balance of the allowed claims. If the security amount is not adequate to pay the full remaining balance, the department shall pay claimants on a prorated basis in proportion to their allowed claims.

SB55-ASA1-AA1,947,17 (3) Payment restrictions. (a) The department may not pay any portion of the following from any source identified in s. 126.72:

SB55-ASA1-AA1,947,19 1. A default claim related to a default by a grain dealer or grain warehouse keeper that occurs before September 1, 2002.

SB55-ASA1-AA1,947,21 2. A default claim related to a default by a milk contractor that occurs before May 1, 2002.

SB55-ASA1-AA1,947,23 3. A default claim related to a default by a vegetable contractor that occurs before February 1, 2002.

SB55-ASA1-AA1,947,25 4. A default claim allowed against a contractor who was not a contributing contractor when the default occurred.

SB55-ASA1-AA1,948,2 (b) The department may not pay any default claim under this chapter, except as provided in sub. (1) or (2).

SB55-ASA1-AA1,948,5 (c) If the total amount of default claims exceeds the amount available under s. 126.72, the department shall prorate the available amount among the eligible claimants in proportion to the amount of their allowed claims.

SB55-ASA1-AA1,948,9 (4) Effect of payment. A claimant who accepts payment under sub. (1) or (2) releases his or her claim against the contractor to the extent of the payment. A payment under sub. (1) or (2) does not prevent a claimant from recovering the balance of an allowed claim directly from the contractor.

SB55-ASA1-AA1,948,13 126.72 Claims against contributing contractor; payment sources. (1) Producer security fund. From the appropriation under s. 20.115 (1) (w), the department shall make payments authorized under s. 126.71 (1), up to the deductible amount in sub. (4).

SB55-ASA1-AA1,948,17 (2) Industry bond proceeds. The department shall make a demand against the appropriate industry bond under s. 126.06 and shall use the proceeds of that bond to make payments authorized under s. 126.71 (1), to the extent that those payments exceed the deductible amount in sub. (4).

SB55-ASA1-AA1,948,21 (3) Blanket bond proceeds. The department shall make a demand against the blanket bond under s. 126.07 and shall use the bond proceeds to pay any remaining amounts authorized under s. 126.71 (1) after the department makes payments under subs. (1) and (2).

SB55-ASA1-AA1,948,23 (4) Deductible amount. The deductible amount, for purposes of subs. (1) and (2), is as follows:

SB55-ASA1-AA1,948,25 (a) For default claims against a grain dealer or grain warehouse keeper who was a contributing contractor when the default occurred:

SB55-ASA1-AA1,949,2 1. If the department allows the claims on or after September 1, 2002, but before September 1, 2004, $500,000.

SB55-ASA1-AA1,949,4 2. If the department allows the claims on or after September 1, 2004, but before September 1, 2006, $750,000.

SB55-ASA1-AA1,949,6 3. If the department allows the claims on or after September 1, 2006, $1,000,000.

SB55-ASA1-AA1,949,8 (b) For default claims against a milk contractor who was a contributing contractor when the default occurred:

SB55-ASA1-AA1,949,10 1. If the department allows the claims on or after May 1, 2002, but before May 1, 2004, $1,000,000.

SB55-ASA1-AA1,949,12 2. If the department allows the claims on or after May 1, 2004, but before May 1, 2006, $1,500,000.

SB55-ASA1-AA1,949,13 3. If the department allows the claims on or after May 1, 2006, $2,000,000.

SB55-ASA1-AA1,949,15 (c) For claims against a vegetable contractor who was a contributing contractor when the default occurred:

SB55-ASA1-AA1,949,17 1. If the department allows the claims on or after February 1, 2002, but before February 1, 2004, $500,000.

SB55-ASA1-AA1,949,19 2. If the department allows the claims on or after February 1, 2004, but before February 1, 2006, $750,000.

SB55-ASA1-AA1,949,20 3. If the department allows the claims on or after February 1, 2006, $1,000,000.

SB55-ASA1-AA1,949,23 126.73 Reimbursing payments. (1) Payments from the fund. The department may demand and collect, from a contractor, any claim amounts that the department pays under s. 126.72 (1) because of the contractor's default.

SB55-ASA1-AA1,950,2 (2) Bond payments. A bond surety may demand and collect, from a contractor, any claim amounts that the bond surety pays to the department under s. 126.72 (2) or (3) because of the contractor's default. The bond surety shall provide the department with a copy of each demand under this subsection.

SB55-ASA1-AA1,950,4 SUBCHAPTER VIII ADMINISTRATION AND ENFORCEMENT

SB55-ASA1-AA1,950,5 126.78 Definitions. In this subchapter:

SB55-ASA1-AA1,950,6 (1) "Contributing contractor" has the meaning given in s. 126.68 (1).

SB55-ASA1-AA1,950,7 (2) "Depositor" has the meaning given in s. 126.25 (5).

SB55-ASA1-AA1,950,8 (3) "Grain dealer" has the meaning given in s. 126.10 (9).

SB55-ASA1-AA1,950,9 (4) "Grain warehouse keeper" has the meaning given in s. 126.25 (9).

SB55-ASA1-AA1,950,10 (5) "Milk contractor" has the meaning given in s. 126.40 (8).

SB55-ASA1-AA1,950,12 (6) "Producer agent" means a person who is a producer agent, as defined in s. 126.10 (13), 126.40 (13), or 126.55 (12).

SB55-ASA1-AA1,950,13 (7) "Vegetable contractor" has the meaning given in s. 126.55 (14).

SB55-ASA1-AA1,950,14 (8) "Vegetable producer" has the meaning given in s. 126.55 (16).

SB55-ASA1-AA1,950,16 126.80 Department authority; general. The department shall administer this chapter.

SB55-ASA1-AA1,950,18 126.81 Rule-making. The department may promulgate rules to do any of the following:

SB55-ASA1-AA1,950,19 (1) Interpret and implement this chapter.

SB55-ASA1-AA1,950,21 (2) Modify the license fees and surcharges provided in s. 126.11 (4), 126.26 (3), 126.41 (3), 126.42, or 126.56 (4).

SB55-ASA1-AA1,950,23 (3) Modify the fund assessments provided under s. 126.15, 126.30, 126.46, or 126.60, as provided in s. 126.88.