Amendment CA1-SSA1-SB55

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:

SB55-SSA1-CA1,642,21 1. The vegetable contractor pays cash on delivery under all vegetable procurement contracts.

SB55-SSA1-CA1,642,23 2. The vegetable contractor is a producer-owned cooperative that procures processing vegetables only from its producer owners.

SB55-SSA1-CA1,643,3 (2) Voluntary financial statement. A contributing vegetable contractor who is not required to file a financial statement under sub. (1) may file an annual financial statement with the department for any of the following reasons:

SB55-SSA1-CA1,643,4 (a) To qualify for a lower fund assessment under s. 126.60.

SB55-SSA1-CA1,643,5 (b) To avoid filing security under s. 126.61 (1) (b).

SB55-SSA1-CA1,643,9 (3) Reviewed or audited financial statement. (a) A vegetable contractor filing an annual financial statement under sub. (1) or (2) shall file an audited financial statement if the vegetable contractor's latest annual license application reported more than $4,000,000 in annual contract obligations under s. 126.56 (9) (a).

SB55-SSA1-CA1,643,12 (b) If par. (a) does not apply, a vegetable contractor filing an annual financial statement under sub. (1) or (2) shall file either a reviewed financial statement or an audited financial statement.

SB55-SSA1-CA1,643,16 (4) Accounting period. A vegetable contractor filing an annual financial statement under sub. (1) or (2) shall file a financial statement that covers the vegetable contractor's last completed fiscal year unless the vegetable contractor has been in business for less than one year.

SB55-SSA1-CA1,643,22 (4m) Interim financial statement. The department may, at any time, require a vegetable contractor licensed under s. 126.56 (1) to file an interim financial statement with the department. The vegetable contractor shall provide, with the interim financial statement, the vegetable contractor's sworn and notarized statement that the financial statement is correct. An interim financial statement need not be a reviewed or audited financial statement.

SB55-SSA1-CA1,644,2 (5) Generally accepted accounting principles. (a) Except as provided in par. (b), a vegetable contractor filing a financial statement under this section shall file a financial statement that is prepared according to generally accepted accounting principles.

SB55-SSA1-CA1,644,5 (b) If a vegetable contractor is a sole proprietor and the vegetable contractor's financial statement is not audited, the vegetable contractor shall file a financial statement that is prepared on a historical cost basis.

SB55-SSA1-CA1,644,12 (6) Financial statement contents. (a) Except as provided in par. (b), a vegetable contractor filing a financial statement under this section shall file a financial statement that consists of a balance sheet, income statement, equity statement, statement of cash flows, notes to those statements, and any other information required by the department. If the vegetable contractor is a sole proprietor, the vegetable contractor shall file his or her business and personal financial statements.

SB55-SSA1-CA1,644,15 (b) If a vegetable contractor has been in business for less than one year, the vegetable contractor may file an annual financial statement under sub. (1) or (2) consisting of a balance sheet and notes.

SB55-SSA1-CA1,644,18 (c) A vegetable contractor filing a financial statement under this section shall include in the financial statement, or in an attachment to the financial statement, calculations of all of the following:

SB55-SSA1-CA1,644,20 1. The vegetable contractor's current ratio, excluding any assets required to be excluded under sub. (7).

SB55-SSA1-CA1,644,22 2. The vegetable contractor's debt to equity ratio, excluding any assets required to be excluded under sub. (7).

SB55-SSA1-CA1,644,25 (7) Assets excluded. A vegetable contractor may not include any of the following assets in the calculations under sub. (6) (c), unless the department specifically approves their inclusion:

SB55-SSA1-CA1,645,4 (a) A nontrade note or account receivable from an officer, director, employee, partner, or stockholder, or from a member of the family of any of those individuals, unless the note or account receivable is secured by a first priority security interest in real or personal property.

SB55-SSA1-CA1,645,6 (b) A note or account receivable from a parent organization, a subsidiary, or an affiliate other than an employee.

SB55-SSA1-CA1,645,9 (c) A note or account that has been receivable for more than one year, unless the vegetable contractor has established an equal offsetting reserve for uncollectible notes and accounts receivable.

SB55-SSA1-CA1,645,12 (9) Entity covered. A person filing a financial statement under this section may not file, in lieu of that person's financial statement, the financial statement of the person's parent organization, subsidiary, predecessor, or successor.

SB55-SSA1-CA1,645,15 (10) Department review. The department may analyze a financial statement filed under this section and may reject a financial statement that fails to comply with this section.

SB55-SSA1-CA1,645,18 126.59 Contributing vegetable contractors; disqualification. (1) Contribution required. A vegetable contractor licensed under s. 126.56 (1) shall pay fund assessments under s. 126.60 unless one of the following applies:

SB55-SSA1-CA1,645,19 (a) The vegetable contractor is disqualified under sub. (2).

SB55-SSA1-CA1,645,21 (b) The vegetable contractor pays cash on delivery under all vegetable procurement contracts.

SB55-SSA1-CA1,645,23 (c) The vegetable contractor is a producer-owned cooperative that procures processing vegetables only from its producer owners.

SB55-SSA1-CA1,645,25 (1m) Voluntary contribution. A vegetable contractor who is exempt under sub. (1) (b) or (c) may volunteer to pay fund assessments under s. 126.60.

SB55-SSA1-CA1,646,3 (2) Disqualified contractor. (a) A vegetable contractor who is required to file security under s. 126.61 (1) (a) is disqualified from the fund until the department determines that one of the conditions in s. 126.61 (7) (a) 1. or 2. is satisfied.

SB55-SSA1-CA1,646,5 (b) A vegetable contractor is disqualified from the fund if the department denies, suspends, or revokes the vegetable contractor's license.

SB55-SSA1-CA1,646,9 (c) A vegetable contractor is disqualified from the fund, and required to pay cash on delivery under vegetable procurement contracts, if the department issues a written notice disqualifying the vegetable contractor for cause. Cause may include any of the following:

SB55-SSA1-CA1,646,10 1. Failure to pay fund assessments under s. 126.60 when due.

SB55-SSA1-CA1,646,11 2. Failure to file a financial statement under s. 126.58 when due.

SB55-SSA1-CA1,646,15 3. Failure to reimburse the department, within 60 days after the department issues a reimbursement demand under s. 126.73 (1), for the full amount that the department pays to claimants under s. 126.72 (1) because of that vegetable contractor's default.

SB55-SSA1-CA1,646,19 4. Failure to reimburse a bond surety, within 60 days after the bond surety issues a reimbursement demand under s. 126.73 (2), for the full amount that the surety pays to the department under s. 126.72 (2) or (3) for the benefit of claimants affected by that vegetable contractor's default.

SB55-SSA1-CA1,646,22 (3) Payments by disqualified vegetable contractor. (a) The department may not return, to a disqualified vegetable contractor, any fund assessments that the vegetable contractor paid as a contributing vegetable contractor.

SB55-SSA1-CA1,647,2 (b) A disqualified vegetable contractor remains liable for any unpaid fund installment under s. 126.60 that became due while the vegetable contractor was a contributing vegetable contractor. A disqualified vegetable contractor is not liable for any fund installment that becomes due after the vegetable contractor is disqualified under sub. (2).

SB55-SSA1-CA1,647,6 126.60 Contributing vegetable contractors; fund assessments. (1) General. A contributing vegetable contractor shall pay an annual fund assessment for each license year. The assessment equals $20 or the sum of the following, whichever is greater, unless the department by rule specifies a different assessment:

SB55-SSA1-CA1,647,10 (a) The vegetable contractor's current ratio assessment. The current ratio assessment for a license year equals the vegetable contractor's current ratio assessment rate under sub. (2) multiplied by the amount reported under s. 126.56 (9) (a) in the vegetable contractor's license application for that license year.

SB55-SSA1-CA1,647,14 (b) The vegetable contractor's debt to equity ratio assessment. The debt to equity ratio assessment for a license year equals the vegetable contractor's debt to equity ratio assessment rate under sub. (4) multiplied by the amount reported under s. 126.56 (9) (a) in the vegetable contractor's license application for that license year.

SB55-SSA1-CA1,647,18 (c) The vegetable contractor's deferred contract assessment. The deferred contract assessment for a license year equals the amount, if any, reported under s. 126.56 (9) (e) in the vegetable contractor's license application for that license year, multiplied by a deferred vegetable contract assessment rate of 0.0025.

SB55-SSA1-CA1,647,20 (2) Current ratio assessment rate. A vegetable contractor's current ratio assessment rate is calculated, at the beginning of the license year, as follows:

SB55-SSA1-CA1,647,25 (a) If the vegetable contractor has filed an annual financial statement under s. 126.58 and that financial statement shows a current ratio of at least 1.25 to 1.0, the vegetable contractor's current ratio assessment rate equals the greater of zero or the current ratio assessment factor in sub. (3) (a) multiplied by the following amount:

SB55-SSA1-CA1,648,1 1. Subtract 4 from the current ratio.

SB55-SSA1-CA1,648,2 2. Divide the amount determined under subd. 1. by 2.

SB55-SSA1-CA1,648,3 3. Multiply the amount determined under subd. 2. by negative one.

SB55-SSA1-CA1,648,4 4. Raise the amount determined under subd. 3. to the 3rd power.

SB55-SSA1-CA1,648,5 5. Subtract 0.65 from the current ratio.

SB55-SSA1-CA1,648,6 6. Divide 0.60 by the amount determined under subd. 5.

SB55-SSA1-CA1,648,7 7. Raise the amount determined under subd. 6. to the 5th power.

SB55-SSA1-CA1,648,9 8. Add the amount determined under subd. 4. to the amount determined under subd. 7.

SB55-SSA1-CA1,648,10 9. Add 0.25 to the amount determined under subd. 8.

SB55-SSA1-CA1,648,15 (b) If the vegetable contractor has filed an annual financial statement under s. 126.58 and that financial statement shows a current ratio of less than 1.25 to 1.0, but greater than 1.1 to 1.0, the vegetable contractor's current ratio assessment rate equals the current ratio assessment factor in sub. (3) (b) multiplied by the following amount:

SB55-SSA1-CA1,648,16 1. Subtract 4 from the current ratio.

SB55-SSA1-CA1,648,17 2. Divide the amount determined under subd. 1. by 2.

SB55-SSA1-CA1,648,18 3. Multiply the amount determined under subd. 2. by negative one.

SB55-SSA1-CA1,648,19 4. Raise the amount determined under subd. 3. to the 3rd power.

SB55-SSA1-CA1,648,20 5. Subtract 0.65 from the current ratio.

SB55-SSA1-CA1,648,21 6. Divide 0.60 by the amount determined under subd. 5.

SB55-SSA1-CA1,648,22 7. Raise the amount determined under subd. 6. to the 5th power.

SB55-SSA1-CA1,648,24 8. Add the amount determined under subd. 4. to the amount determined under subd. 7.

SB55-SSA1-CA1,648,25 9. Add 0.25 to the amount determined under subd. 8.

SB55-SSA1-CA1,649,4 (c) If the vegetable contractor has filed an annual financial statement under s. 126.58 and that financial statement shows a current ratio of less than or equal to 1.1 to 1.0, the vegetable contractor's current ratio assessment rate equals the current ratio assessment factor in sub. (3) (b) multiplied by 7.512617.

SB55-SSA1-CA1,649,7 (d) If the vegetable contractor has not filed an annual financial statement under s. 126.58, the vegetable contractor's current ratio assessment rate equals the current ratio assessment factor in sub. (3) (b) multiplied by 3.84961.

SB55-SSA1-CA1,649,9 (3) Current ratio assessment factor. (a) A vegetable contractor's current ratio assessment factor under sub. (2) (a) is 0.00048, except as follows:

SB55-SSA1-CA1,649,12 1. For the vegetable contractor's 4th and 5th consecutive full license years as a contributing vegetable contractor, the vegetable contractor's current ratio assessment factor is 0.00029.

SB55-SSA1-CA1,649,15 2. For the vegetable contractor's 6th or higher consecutive full license year as a contributing vegetable contractor, the vegetable contractor's current ratio assessment factor is zero.

SB55-SSA1-CA1,649,17 (b) A vegetable contractor's current ratio assessment factor under sub. (2) (b) to (d) is 0.00072, except as follows:

SB55-SSA1-CA1,649,20 1. For the vegetable contractor's 4th and 5th consecutive full license years as a contributing vegetable contractor, the vegetable contractor's current ratio assessment factor is 0.00058.

SB55-SSA1-CA1,649,23 2. For the vegetable contractor's 6th or higher consecutive full license year as a contributing vegetable contractor, the vegetable contractor's current ratio assessment factor is 0.00035.

SB55-SSA1-CA1,650,3 (4) Debt to equity ratio assessment rate. A vegetable contractor's debt to equity ratio assessment rate for a license year is calculated, at the beginning of the license year, as follows:

SB55-SSA1-CA1,650,8 (a) If the vegetable contractor has filed an annual financial statement under s. 126.58 and that financial statement shows positive equity and a debt to equity ratio of not more than 4.0 to 1.0, the vegetable contractor's debt to equity ratio assessment rate equals the greater of zero or the debt to equity ratio assessment factor in sub. (5) (a) multiplied by the following amount:

SB55-SSA1-CA1,650,9 1. Subtract 4 from the debt to equity ratio.

SB55-SSA1-CA1,650,10 2. Divide the amount determined under subd. 1. by 4.

SB55-SSA1-CA1,650,11 3. Raise the amount determined under subd. 2. to the 3rd power.

SB55-SSA1-CA1,650,12 4. Subtract 1.85 from the debt to equity ratio.

SB55-SSA1-CA1,650,13 5. Divide the amount determined under subd. 4. by 2.5.

SB55-SSA1-CA1,650,14 6. Raise the amount determined under subd. 5. to the 7th power.

SB55-SSA1-CA1,650,16 7. Add the amount determined under subd. 3. to the amount determined under subd. 6.