AB230,17,323 (d) The department may require a warehouse keeper, including an exempt
24warehouse keeper, to file a supplementary financial statement or an interim
25statement whenever the department determines that such filing is necessary to

1protect depositors. The department may require a financial statement filed under
2this paragraph to be an audited financial statement or a reviewed financial
3statement.
AB230,17,104 (e) The department may extend the filing deadline under par. (a) 2. by up to 30
5days in response to a written request from a warehouse keeper or an independent
6certified public accountant, or an independent public accountant holding a
7certificate of authority under ch. 442, that is auditing or reviewing the financial
8statement for a warehouse keeper if the department receives the request on or before
9the 5th day of the 4th month beginning after the close of the warehouse keeper's
10fiscal year and if the request states the reason for the extension.
AB230, s. 47 11Section 47. 127.06 (1m) of the statutes is created to read:
AB230,17,1312 127.06 (1m) Grain dealers; financial statements required. (a) The following
13grain dealers shall file financial statements under par. (b):
AB230,17,1414 1. A Class A grain dealer.
AB230,17,1615 2. A Class B grain dealer that uses any deferred price contract or deferred
16payment contract.
AB230,17,1817 3. A grain dealer that claims to be bonded or claims to have filed security with
18the department for the benefit of producers.
AB230,17,1919 (b) A grain dealer specified in par. (a) shall do all of the following:
AB230,17,2120 1. File a financial statement with the grain dealer's initial application for a
21license under s. 127.03 (2).
AB230,17,2422 2. Except as provided in par. (e), file an annual financial statement with the
23department on or before the 15th day of the 4th month beginning after the close of
24the grain dealer's fiscal year.
AB230,18,3
1(c) A financial statement filed under par. (b) shall be either a reviewed financial
2statement or an audited financial statement, except that the financial statement
3shall be an audited financial statement if any of the following apply:
AB230,18,54 1. The grain dealer is a Class A grain dealer that buys or sells at least
5$2,000,000 worth of grain from producers during the grain dealer's fiscal year.
AB230,18,76 2. The grain dealer is a sole proprietor and the financial statement is not
7prepared according to the historical cost basis method of accounting.
AB230,18,138 (d) The department may require a Class A grain dealer or a Class B grain dealer
9that uses any deferred price contract or deferred payment contract to file a
10supplementary financial statement or an interim statement whenever the
11department determines that such filing is necessary to protect producers. The
12department may require a financial statement filed under this paragraph to be an
13audited financial statement or a reviewed financial statement.
AB230,18,2014 (e) The department may extend the filing deadline under par. (b) 2. by up to 30
15days in response to a written request from a grain dealer or an independent certified
16public accountant, or an independent public accountant who holds a certificate of
17authority under ch. 442, that is auditing or reviewing the financial statement for a
18grain dealer, if the department receives the written request on or before the 5th day
19of the 4th month beginning after the close of the grain dealer's fiscal year and if the
20request states the reason for the extension.
AB230, s. 48 21Section 48. 127.06 (2) (title) and (a) of the statutes are amended to read:
AB230,19,222 127.06 (2) (title) Contents; general. (a) Except as provided in par. (b) sub. (3)
23or (4)
, a financial statement under sub. (1) or (1m) shall consist of a balance sheet,
24income statement, equity statement, statement of cash flows, notes to financial

1statements and other information required by the department, and shall be prepared
2in conformity with according to generally accepted accounting principles.
AB230,19,6 3(b) Except as provided in par. (b) sub. (4), a warehouse keeper's financial
4statement shall disclose, separately and clearly, the warehouse keeper's obligations
5to depositors in the form of negotiable and nonnegotiable warehouse receipts, scale
6tickets and, collateral warehouse receipts and other grain storage receipts.
AB230,19,11 7(c) Except as provided in par. (b) sub. (4), a grain dealer's financial statement
8shall disclose, separately and clearly, the grain dealer's obligations to producers in
9the form of scale tickets, receipts, settlement sheets and contracts for grain
10purchased from producers. All reviewed financial statements shall be sworn to by
11the warehouse keeper or grain dealer filing the statement.
AB230, s. 49 12Section 49. 127.06 (2) (b) of the statutes is renumbered 127.06 (4) and
13amended to read:
AB230,19,2014 127.06 (4) (title) Initial financial statement. A If a warehouse keeper or a
15Class A
grain dealer that has not previously engaged in those businesses may file an
16initial financial statement, consisting
operated as a warehouse keeper or grain
17dealer, the financial statement included with that warehouse keeper's or grain
18dealer's initial license application may consist
of an opening balance sheet and notes
19to that balance sheet, prepared in conformity with according to generally accepted
20accounting principles.
AB230, s. 50 21Section 50. 127.06 (3) of the statutes is renumbered 127.06 (7) and amended
22to read:
AB230,20,523 127.06 (7) (title) Access to Financial statement closed to public inspection.
24 A Neither a financial statement nor a disclosure of grain purchases under sub. (5)
25is not subject to open to public inspection under s. 19.35 and the. The department

1may keep a financial statement closed to the public, although the department may
2utilize and release introduce a financial statement as evidence in an enforcement
3action, brought by or on behalf of the department or in an administrative hearing or
4court proceeding in which the department is a named party, subject to any protective
5orders made by the court or administrative tribunal
.
AB230, s. 51 6Section 51. 127.06 (3) of the statutes is created to read:
AB230,20,127 127.06 (3) Financial statement of sole proprietor. If a warehouse keeper or
8grain dealer is a sole proprietor, the financial statement for that sole proprietor shall
9consist of a statement of financial condition, statement of changes in net worth, notes
10to the financial statements and other information required by the department,
11except that the financial statement for the sole proprietor's grain operations shall
12comply with sub. (2) (a).
AB230, s. 52 13Section 52. 127.06 (5) and (6) of the statutes are created to read:
AB230,20,1814 127.06 (5) Grain dealer; disclosure of amount of grain purchased. With
15every financial statement filed under sub. (1m), a grain dealer shall file a statement,
16on a form furnished by the department, showing the total dollar value of grain that
17the grain dealer purchased from producers during the grain dealer's last completed
18fiscal year and during each month of that fiscal year.
AB230,21,2 19(6) Liability adjustments. (a) For purposes of s. 127.065 (1) (c) or 127.067 (1)
20(c), a warehouse keeper or grain dealer may deduct, from the amount of a liability
21reported in the warehouse keeper's or grain dealer's financial statement, any of the
22liability adjustments allowed for the warehouse keeper or grain dealer under pars.
23(b) to (f) if the amount of the liability adjustments and of the offsetting assets are
24disclosed in the notes to the financial statement. The total amount of the liability
25adjustments under pars. (b) to (f) may not exceed the total amount of the

1corresponding assets, identified in the notes to the financial statement, that justify
2the adjustments.
AB230,21,83 (b) A grain dealer may deduct amounts that the grain dealer has borrowed from
4a lending institution and deposited with a commodities broker to maintain an
5account to hedge grain transactions. The amount of the deduction shall be the lesser
6of the amount deposited with the commodities broker or the amount owed to the
7lending institution for funds borrowed from the lending institution and deposited
8with the commodities broker.
AB230,21,149 (c) A grain dealer may deduct amounts that the grain dealer has borrowed from
10a lending institution to buy grain that has been shipped and is in transit if the grain
11dealer has a collectible account receivable for that grain on the date of the balance
12sheet. The amount of the deduction shall be the lesser of the amount receivable by
13the grain dealer for the grain that has been shipped and is in transit or the amount
14that the grain dealer owes to the lending institution for funds used to buy that grain.
AB230,21,1915 (d) A grain dealer may deduct amounts that the grain dealer has borrowed from
16a lending institution and that are secured by grain owned by the grain dealer and
17held in the grain dealer's inventory. The amount of the deduction shall be the lesser
18of the value of the grain pledged as security or the amount owed to the lending
19institution.
AB230,21,2520 (e) A grain dealer may deduct amounts that the grain dealer has borrowed from
21a lending institution and used to buy grain that the grain dealer holds in inventory
22on the date of the balance sheet if the grain dealer has entered into a written contract
23to sell the grain. The amount of the deduction shall be the lesser of the amount owed
24to the lending institution or the value of the grain purchased with the borrowed funds
25and held in inventory to fill the sales contract.
AB230,22,6
1(f) A warehouse keeper or a grain dealer may deduct amounts that the
2warehouse keeper or grain dealer has borrowed from a lending institution and used
3to pay for fertilizer, pesticides, herbicides or seed that the warehouse keeper or grain
4dealer holds in inventory on the date of the balance sheet. The amount of the
5deduction shall be the lesser of the amount owed to the lending institution or the cost
6of the fertilizer, pesticides, herbicides or seed purchased with the borrowed funds.
AB230, s. 53 7Section 53. 127.065 of the statutes is created to read:
AB230,22,10 8127.065 Minimum financial standards; warehouse keepers. (1)
9Requirement. Except as provided in sub. (2), a warehouse keeper other than an
10exempt warehouse keeper shall meet all of the following financial standards:
AB230,22,1311 (a) On the date of the warehouse keeper's initial financial statement under s.
12127.06 (1) (a) 1. and at the end of each fiscal year, the ratio of the warehouse keeper's
13current assets to current liabilities shall be at least 1.25 to 1.
AB230,22,1514 (b) At all times other than the times under par. (a), the ratio of the warehouse
15keeper's current assets to current liabilities shall be at least 1 to 1.
AB230,22,1916 (c) The warehouse keeper's total assets shall at all times exceed total liabilities,
17adjusted as provided in s. 127.06 (6), by at least $50,000 or the product obtained by
18multiplying the capacity of the warehouse keeper's warehouses by 10 cents,
19whichever is greater.
AB230,22,21 20(2) Exemptions. A warehouse keeper is not required to comply with sub. (1) if
21the warehouse keeper does all of the following:
AB230,22,2322 (a) Files with the department a bond or other security that complies with s.
23127.07.
AB230,22,2424 (b) Files monthly reports with the department under s. 127.069.
AB230,23,4
1(3) Notice of changes. A warehouse keeper that is required to comply with
2sub. (1) shall notify the department whenever the warehouse keeper knows or has
3reason to believe that the warehouse keeper no longer meets a financial standard
4under sub. (1).
AB230, s. 54 5Section 54. 127.067 of the statutes is created to read:
AB230,23,9 6127.067 Minimum financial standards; grain dealers. (1) Requirement.
7Except as provided in sub. (2), each Class B grain dealer that uses any deferred
8payment contract or deferred price contract to buy grain from a producer and each
9Class A grain dealer shall meet all of the following financial standards:
AB230,23,1210 (a) On the date of the grain dealer's initial financial statement under s. 127.06
11(1m) (b) 1. and at the end of each fiscal year, the ratio of the grain dealer's current
12assets to current liabilities shall be at least 1.25 to 1.
AB230,23,1413 (b) At all times other than the times under par. (a), the ratio of the grain dealer's
14current assets to current liabilities shall be at least 1 to 1.
AB230,23,1715 (c) The grain dealer's total assets shall at all times exceed total liabilities,
16adjusted as provided in s. 127.06 (6), by $15,000 or the amount required to achieve
17a ratio of total liabilities to equity of not more than 5 to 1, whichever is greater.
AB230,23,19 18(2) Exemptions. A grain dealer is not required to comply with sub. (1) if the
19grain dealer does all of the following:
AB230,23,2120 (a) Files with the department a bond or other security that complies with s.
21127.07.
AB230,23,2222 (b) Files monthly reports with the department under s. 127.069.
AB230,23,25 23(3) Notice of changes. A grain dealer that is required to comply with sub. (1)
24shall notify the department whenever the grain dealer knows or has reason to believe
25that the grain dealer no longer meets a financial standard under sub. (1).
AB230, s. 55
1Section 55. 127.069 of the statutes is created to read:
AB230,24,8 2127.069 Monthly reports; warehouse keepers and grain dealers. (1)
3Warehouse keeper. A warehouse keeper, other than an exempt warehouse keeper,
4that does not meet the financial standards under s. 127.065 (1) shall file monthly
5reports with the department. The warehouse keeper shall file each monthly report
6no later than the 10th day of each month. Each monthly report shall state the
7inventory of each type of grain in storage in each of the warehouse keeper's
8warehouses on the last day of the previous month.
AB230,24,10 9(2) Grain dealers. (a) All of the following shall file monthly reports with the
10department:
AB230,24,1211 1. A Class A grain dealer that does not meet the financial standards under s.
12127.067 (1).
AB230,24,1513 2. A Class B grain dealer that uses any deferred payment contract or deferred
14price contract to buy grain from producers and that does not meet the financial
15standards under s. 127.067 (1).
AB230,24,1716 3. A grain dealer that claims to be bonded or that claims to have filed security
17with the department for the benefit of producers.
AB230,24,2018 (b) A grain dealer shall file the monthly report under par. (a) with the
19department no later than the 10th day of each month. The report shall include all
20of the following:
AB230,24,2321 1. The total number of bushels of each type of grain, and the total cost of each
22type of grain, that the grain dealer purchased from producers during the previous
23month.
AB230,25,3
12. The total number of bushels of each type of grain purchased from producers
2under a deferred payment contract or deferred price contract for which the grain
3dealer had not paid as of the last day of the previous month.
AB230,25,84 3. The amount that the grain dealer owed producers for each type of grain
5identified under subd. 2. as of the last day of the previous month. The grain dealer
6shall estimate the amount owed for grain purchased under deferred price contracts
7based on the pricing formulas in the contracts and the market prices for grain as of
8the last day of the previous month.
AB230, s. 56 9Section 56. 127.07 of the statutes is repealed and recreated to read:
AB230,25,14 10127.07 Security requirements; warehouse keepers and grain dealers.
11(1)
Warehouse keepers. A warehouse keeper that claims to be bonded or claims to
12have filed security for the benefit of depositors or that does not meet the financial
13standards under s. 127.065 (1) and that is not an exempt warehouse keeper shall file
14with the department, and maintain, security under this section.
AB230,25,16 15(2) Grain dealers. All of the following grain dealers shall file with the
16department, and maintain, security under this section:
AB230,25,1817 (a) Class A grain dealer that does not meet the financial standards under s.
18127.067 (1).
AB230,25,2119 (b) A Class B grain dealer that uses any deferred payment contract or deferred
20price contract to buy grain from producers and that does not meet the financial
21standards under s. 127.067 (1).
AB230,25,2322 (c) A grain dealer that claims to be bonded or that claims to have filed security
23for the benefit of producers.
AB230,26,3
1(3) Form of security. Security filed and maintained under sub. (1) or (2) shall
2comply with the standards promulgated by the department by rule and shall be in
3one of the following forms:
AB230,26,74 (a) A continuous surety bond that is subject to cancellation by the surety
5company only upon 90 days' written notice to the department. Notice of cancellation
6may not affect any liability incurred on the bond within 90 days after notice is served
7on the department.
AB230,26,88 (b) Cash or negotiable securities.
AB230,26,99 (c) Stocks, bonds or other marketable securities at current market value.
AB230,26,1310 (d) An irrevocable bank letter of credit that is issued for an initial period of one
11year and is automatically renewed at the end of each period unless, at least 90 days
12before the scheduled renewal date, the issuing bank gives the department written
13notice that the letter of credit will not be renewed.
AB230,26,1514 (e) Personal surety bonds or other 3rd party guarantees that are fully backed
15by security under par. (b) or (c).
AB230,26,19 16(4) Amount of security; warehouse keepers. A warehouse keeper that is
17required to file and maintain security under sub. (1) shall file and maintain security
18in an amount that is at least 20% of the current market value of all grain that the
19warehouse keeper has in storage for depositors or $25,000, whichever is greater.
AB230,26,23 20(5) Amount of security; grain dealers. (a) Except as provided under par. (b),
21a grain dealer that is required to file and maintain security under sub. (2) shall file
22and maintain security in an amount that is at least equal to the sum of the following,
23increased to the next highest $1,000:
AB230,27,3
11. The total amount that the grain dealer owed to producers under deferred
2payment contracts as of the last day of the previous month or as of another date
3specified by the department.
AB230,27,84 2. The estimated total amount that the grain dealer owed to producers under
5deferred price contracts as of the last day of the previous month or as of another date
6specified by the department. The grain dealer shall estimate the amount owed based
7on the pricing formulas in the contracts and the market prices for grain as of the last
8day of the previous month or as of the date specified by the department.
AB230,27,99 3. One of the following:
AB230,27,1310 a. Before September 1, 1996, an amount equal to 20% of the dollar amount of
11the grain dealer's average monthly purchases from producers for the 3 months in
12which the grain dealer made the largest monthly purchases from producers during
13the preceding 12 months.
AB230,27,1714 b. Beginning on September 1, 1996, an amount equal to 35% of the dollar
15amount of the grain dealer's average monthly purchases from producers for the 3
16months in which the grain dealer made the largest monthly purchases from
17producers during the preceding 12 months.
AB230,27,2518 (b) If a grain dealer has operated as a grain dealer for less than one year, the
19grain dealer shall file and maintain security in an amount specified by the
20department. The department shall specify an amount that is equal to the amount
21that the department projects to be the dollar amount of the grain dealer's monthly
22average grain purchases during the 3 months in which the grain dealer is likely to
23make the largest monthly purchases from producers during the following 12 months,
24multiplied by the percentage under par. (a) 3. or, beginning on September 1, 1996,
25under par. (a) 4.
AB230,28,2
1(6) Demands for security. (a) The department may require a warehouse
2keeper or grain dealer to file security whenever one of the following occurs:
AB230,28,53 1. The warehouse keeper ceases to meet the financial standards under s.
4127.065 (1) or the grain dealer ceases to meet the financial standards under s.
5127.067 (1).
AB230,28,76 2. The department receives notice of cancellation of a surety bond, or notice of
7nonrenewal of a letter of credit, filed with the department as security.
AB230,28,108 3. Security filed with the department falls below the amount required under
9sub. (4) or (5) because of a depreciation in the value of the security or an increase in
10the amount of security required or for any other reason.
AB230,28,1211 4. The warehouse keeper or grain dealer fails to provide information requested
12by the department that is relevant to a determination of security requirements.
AB230,28,1813 (b) If the department requires a warehouse keeper or grain dealer to file
14security with the department under par. (a), the department shall issue a written
15demand for security to the warehouse keeper or grain dealer. The demand shall
16indicate why the security is required, the amount of security required, the basis on
17which the department determined the amount of security required and the deadline
18for filing security.
AB230,28,2119 (c) If a warehouse keeper or grain dealer fails to file security by the deadline
20specified under par. (b), the department may summarily suspend the license of the
21warehouse keeper or grain dealer.
AB230,29,322 (d) If a warehouse keeper or grain dealer fails to file security by the deadline
23specified under par. (b), the warehouse keeper or grain dealer shall, within 5 days
24after the deadline, give notice of its failure to file security to all depositors or
25producers to whom the warehouse keeper or grain dealer is obligated under a grain

1storage contract or a grain purchase contract. If a warehouse keeper or grain dealer
2fails to notify depositors or producers under this paragraph, the department shall
3notify those producers or depositors by publishing a class 3 notice under ch. 985.
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