Amendment CA1-SSA1-SB55

SB55-SSA1-CA1,633,5 126.51 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-SSA1-CA1,633,6 (1) That the producer agent does not take title to the milk producer's milk.

SB55-SSA1-CA1,633,7 (2) That the producer agent holds all milk receipts in trust for milk producers.

SB55-SSA1-CA1,633,10 (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-SSA1-CA1,633,12 subchapter vI vegetable CONTRACTORS

SB55-SSA1-CA1,633,13 126.55 Definitions. In this subchapter:

SB55-SSA1-CA1,633,16 (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-SSA1-CA1,633,17 (2) "Cash payment" means payment in any of the following forms:

SB55-SSA1-CA1,633,18 (a) Currency.

SB55-SSA1-CA1,633,19 (b) A cashier's check, or a check that a bank issues and certifies.

SB55-SSA1-CA1,633,20 (c) A wire transfer.

SB55-SSA1-CA1,633,21 (d) Simultaneous barter.

SB55-SSA1-CA1,633,25 (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-SSA1-CA1,634,5 (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-SSA1-CA1,634,7 (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-SSA1-CA1,634,9 (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-SSA1-CA1,634,12 (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-SSA1-CA1,634,14 (9) "Disqualified vegetable contractor" means a vegetable contractor who is disqualified from the fund under s. 126.59 (2).

SB55-SSA1-CA1,634,15 (10) "Food processing" has the meaning given in s. 97.29 (1) (g).

SB55-SSA1-CA1,634,17 (10m) "License year" means the period beginning on February 1 and ending on the following January 31.

SB55-SSA1-CA1,634,21 (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-SSA1-CA1,634,25 (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-SSA1-CA1,635,3 (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-SSA1-CA1,635,6 (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-SSA1-CA1,635,8 (13) "Time of delivery" under a vegetable procurement contract means the time at which one of the following occurs:

SB55-SSA1-CA1,635,9 (a) The vegetable contractor harvests the vegetables.

SB55-SSA1-CA1,635,11 (b) The vegetable producer delivers harvested vegetables to the custody or control of the vegetable contractor.

SB55-SSA1-CA1,635,13 (c) The vegetable contractor notifies the vegetable producer of the vegetable contractor's refusal to harvest or accept delivery of vegetables.

SB55-SSA1-CA1,635,14 (14) "Vegetable contractor" means a person who does any of the following:

SB55-SSA1-CA1,635,16 (a) Contracts with a vegetable producer or a producer agent to procure processing vegetables that a vegetable producer grows in this state.

SB55-SSA1-CA1,635,18 (b) Contracts with a vegetable producer to market, as a producer agent, processing vegetables that the vegetable producer grows in this state.

SB55-SSA1-CA1,635,20 (15) "Vegetable procurement contract" means an oral or written agreement under which a vegetable contractor does any of the following:

SB55-SSA1-CA1,635,22 (a) Contracts with a vegetable producer or a producer agent to procure processing vegetables that a vegetable producer grows in this state.

SB55-SSA1-CA1,635,24 (b) Contracts with a vegetable producer to market, as a producer agent, processing vegetables that the vegetable producer grows in this state.

SB55-SSA1-CA1,636,2 (16) "Vegetable producer" means a person who grows processing vegetables in this state.

SB55-SSA1-CA1,636,5 (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-SSA1-CA1,636,7 (a) Land on which the vegetables are suitable for processing, but are not harvested.

SB55-SSA1-CA1,636,9 (b) Land on which the vegetables are abandoned as being unsuitable for processing.

SB55-SSA1-CA1,636,12 126.56 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-SSA1-CA1,636,14 (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-SSA1-CA1,636,16 (2) Exempt contractors. The following vegetable contractors are exempt from licensing under sub. (1):

SB55-SSA1-CA1,636,19 (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-SSA1-CA1,636,21 (b) A restaurant or retail food establishment that procures processing vegetables solely for retail sale at the restaurant or retail food establishment.

SB55-SSA1-CA1,636,24 (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-SSA1-CA1,637,2 (a) The applicant's legal name and any trade name under which the applicant proposes to operate as a vegetable contractor.

SB55-SSA1-CA1,637,7 (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-SSA1-CA1,637,9 (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-SSA1-CA1,637,12 (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.

SB55-SSA1-CA1,637,13 (e) All license fees and surcharges required under sub. (4).

SB55-SSA1-CA1,637,14 (f) The sworn and notarized statement required under sub. (9).

SB55-SSA1-CA1,637,15 (g) A financial statement if required under s. 126.58 (1) and not yet filed.

SB55-SSA1-CA1,637,16 (h) Other relevant information required by the department.

SB55-SSA1-CA1,637,19 (4) License fees and surcharges. A vegetable contractor applying for a license under sub. (1) shall pay the following fees and surcharges, unless the department specifies a different fee or surcharge amount by rule:

SB55-SSA1-CA1,637,20 (a) A nonrefundable license processing fee of $25.

SB55-SSA1-CA1,637,22 (b) A fee of $25 plus 5.75 cents for each $100 in contract obligations reported under sub. (9) (a), less any credit provided under sub. (6).

SB55-SSA1-CA1,638,2 (c) A license surcharge of $500 if the department determines that, within 365 days before submitting the license application, the applicant operated as a vegetable contractor without a license in violation of sub. (1). The applicant shall also pay any license fees, license surcharges, and fund assessments that are still due for the license year in which the applicant violated sub. (1).

SB55-SSA1-CA1,638,5 (d) A license surcharge of $100 if during the preceding 12 months the applicant failed to file an annual financial statement required under s. 126.58 (1) (b) by the applicable deadline.

SB55-SSA1-CA1,638,7 (e) A license surcharge of $100 if a renewal applicant fails to renew a license by the license expiration date of January 31.

SB55-SSA1-CA1,638,10 (4m) Effect of payment of surcharge. Payment under sub. (3) (c) does not relieve the applicant of any other civil or criminal liability that results from the violation of sub. (1), but does not constitute evidence of any law violation.

SB55-SSA1-CA1,638,13 (5) License for part of year; fees. A person who applies for an annual vegetable contractor license after the beginning of a license year shall pay the full annual fee amounts required under sub. (4).

SB55-SSA1-CA1,638,20 (6) Fee credits. (a) If the balance in the fund contributed by vegetable contractors exceeds $1,000,000 on November 30 of any license year, the department shall credit 50% of the excess amount against fees charged under sub. (4) (b) to contributing vegetable contractors who file timely license renewal applications for the next license year. The department shall credit each contributing vegetable contractor on a prorated basis, in proportion to the total fees that the vegetable contractor has paid under sub. (4) (b) for the 4 preceding license years.

SB55-SSA1-CA1,638,24 (b) The fee under sub. (4) (b) is reduced by one cent for each $100 in contract obligations reported under sub. (9) (a) if the department, under a contract with the applicant, grades all of the graded vegetables that the applicant procures from vegetable producers or producer agents.

SB55-SSA1-CA1,639,4 (7) Fee statement. The department shall provide, with each license application form, a written statement of all license fees and surcharges required under sub. (4). The department shall specify any fee credits for which the applicant may qualify under sub. (6).

SB55-SSA1-CA1,639,9 (8) No license without full payment. The department may not issue a license under sub. (1) until the applicant pays all license fees and surcharges identified in the department's statement under sub. (7). The department shall refund a fee or surcharge paid under protest if upon review the department determines that the fee or surcharge is not applicable.

SB55-SSA1-CA1,639,12 (9) Sworn and notarized statement. As part of a license application under sub. (3), an applicant shall provide a sworn and notarized statement, signed by the applicant or an officer of the applicant, that reports all of the following:

SB55-SSA1-CA1,639,16 (a) The total amount of contract obligations that the applicant incurred during the applicant's last completed fiscal year. If the applicant has not yet operated as a vegetable contractor, the applicant shall estimate the amount of contract obligations that the applicant will incur during the applicant's first complete fiscal year.

SB55-SSA1-CA1,639,19 (b) The largest amount of unpaid contract obligations that the vegetable contractor had at any time during the vegetable contractor's last completed fiscal year.

SB55-SSA1-CA1,639,21 (c) The amount of unpaid contract obligations that the vegetable contractor has at the time of application.

SB55-SSA1-CA1,639,23 (d) The amount of unpaid contract obligations under par. (c) that are due for payment before the license year for which the applicant is applying.

SB55-SSA1-CA1,639,25 (e) The amount of unpaid obligations under par. (c) that the contractor has under deferred payment contracts.

SB55-SSA1-CA1,640,4 (f) Whether the applicant and the applicant's affiliates and subsidiaries will collectively grow more than 10% of the total acreage of any vegetable species grown or procured by the applicant during the license year for which the applicant is applying.

SB55-SSA1-CA1,640,6 (g) Whether the applicant will pay cash on delivery under all vegetable procurement contracts during the license year for which the applicant is applying.

SB55-SSA1-CA1,640,11 (h) Whether the applicant is a producer-owned cooperative or organization that procures vegetables solely from its producer owners on the basis of a cooperative marketing method under which the producer-owned cooperative or organization pays its producer owners a prorated share of sales proceeds for the marketing year after a final accounting and the deduction of marketing expenses.

SB55-SSA1-CA1,640,16 (10) Action granting or denying application. (a) The department shall grant or deny a license application under sub. (3) within 30 days after the department receives a complete application. If the department denies a license application, the department shall give the applicant a written notice stating the reasons for the denial.

SB55-SSA1-CA1,640,19 (b) A license becomes invalid after February 5 of the license year for which it is issued unless the license holder has by February 5 paid all producer obligations that were due and payable during the preceding license year.

SB55-SSA1-CA1,640,22 (11) License displayed. A vegetable contractor licensed under sub. (1) shall prominently display a copy of that license at each business location from which the vegetable contractor operates in this state.

SB55-SSA1-CA1,641,2 (12) Notice required. (a) A vegetable contractor who files security under s. 126.61 shall immediately notify the department if, at any time, the vegetable contractor's unpaid contract obligations exceed the amount last reported under sub. (9) (b).

SB55-SSA1-CA1,641,5 (b) A vegetable contractor shall immediately notify the department if the amount of unpaid obligations under deferred payment contracts exceeds the amount last reported under sub. (9) (e).

SB55-SSA1-CA1,641,12 126.57 Vegetable contractors; insurance. (1) Fire and extended coverage insurance. (a) Except as provided in par. (b), a vegetable contractor who is required to be licensed under s. 126.56 (1) shall maintain fire and extended coverage insurance, issued by an insurance company authorized to do business in this state, that covers all vegetables in the custody of the vegetable contractor, whether owned by the vegetable contractor or held for others, at the full local market value of the vegetables.

SB55-SSA1-CA1,641,14 (b) Paragraph (a) does not apply to a vegetable contractor if any of the following applies:

SB55-SSA1-CA1,641,16 1. The vegetable contractor pays cash on delivery under all vegetable procurement contracts.

SB55-SSA1-CA1,641,18 2. The vegetable contractor is a producer-owned cooperative or organization that procures processing vegetables only from its producer owners.

SB55-SSA1-CA1,641,21 (2) Insurance cancellation; replacement. Whenever an insurance policy under sub. (1) is canceled, the vegetable contractor shall replace the policy so that there is no lapse in coverage.

SB55-SSA1-CA1,641,24 (3) Insurance coverage; misrepresentation. No vegetable contractor may misrepresent any of the following to the department or to any vegetable producer or producer agent:

SB55-SSA1-CA1,641,25 (a) That the vegetable contractor is insured.

SB55-SSA1-CA1,642,2 (b) The nature, coverage, or material terms of the vegetable contractor's insurance policy.

SB55-SSA1-CA1,642,8 126.58 Vegetable contractors; financial statements. (1) Required annual financial statement. (a) Except as provided in par. (c), a vegetable contractor shall file an annual financial statement with the department, before the department first licenses the vegetable contractor under s. 126.56 (1), if the vegetable contractor reports more than $500,000 in contract obligations under s. 126.56 (9) (a).

SB55-SSA1-CA1,642,17 (b) Except as provided in par. (c), a vegetable contractor licensed under s. 126.56 (1) shall file an annual financial statement with the department during each license year if the vegetable contractor's license application for that year reports more than $500,000 in contract obligations under s. 126.56 (9) (a). The vegetable contractor shall file the annual financial statement by the 15th day of the 4th month following the close of the vegetable contractor's fiscal year, except that the department may extend the filing deadline for up to 30 days if the vegetable contractor, or the accountant reviewing or auditing the financial statement, files a written extension request at least 10 days before the filing deadline.

SB55-SSA1-CA1,642,19 (c) A vegetable contractor is not required to file a financial statement under par. (a) or (b) if any of the following applies: