Chapter 126

126.31(4) (4) Form of security. The department shall review, and determine whether to approve, security filed or maintained under this section. The department may approve only the following types of security:

126.31(4)(a) (a) Currency.

126.31(4)(b) (b) A commercial surety bond if all of the following apply:

126.31(4)(b)1. 1. The surety bond is made payable to the department for the benefit of depositors.

126.31(4)(b)2. 2. The surety bond is issued by a person authorized to operate a surety business in this state.

126.31(4)(b)3. 3. The surety bond is issued as a continuous term bond that may be canceled only with the department’s written agreement, or upon 90 days’ prior written notice served on the department in person or by certified mail.

126.31(4)(b)4. 4. The surety bond is issued in a form, and subject to any terms and conditions, that the department considers appropriate.

126.31(4)(c) (c) A certificate of deposit or money market certificate, if all of the following apply:

126.31(4)(c)1. 1. The certificate is issued or endorsed to the department for the benefit of depositors.

126.31(4)(c)2. 2. The certificate may not be canceled or redeemed without the department’s written permission.

126.31(4)(c)3. 3. No person may transfer or withdraw funds represented by the certificate without the department’s written permission.

126.31(4)(c)4. 4. The certificate renews automatically without any action by the department.

126.31(4)(c)5. 5. The certificate is issued in a form, and subject to any terms and conditions, that the department considers appropriate.

126.31(4)(d) (d) An irrevocable bank letter of credit if all of the following apply:

126.31(4)(d)1. 1. The letter of credit is payable to the department for the benefit of depositors.

126.31(4)(d)2. 2. The letter of credit is issued on bank letterhead.

126.31(4)(d)3. 3. The letter of credit is issued for an initial period of at least one year.

126.31(4)(d)4. 4. The letter of credit renews automatically unless at least 90 days before the scheduled renewal date the issuing bank gives the department written notice, in person or by certified mail, that the letter of credit will not be renewed.

126.31(4)(d)5. 5. The letter of credit is issued in a form, and subject to any terms and conditions, that the department considers appropriate.

126.31(5) (5) Department custody of security. The department shall hold, in its custody, all security filed and maintained under this section. The department shall hold the security for the benefit of depositors.

126.31(6) (6) Additional security.

126.31(6)(a) (a) The department may, at any time during a license year, demand additional security from a grain warehouse keeper if any of the following applies:

126.31(6)(a)1. 1. The grain warehouse keeper’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 depositors, or the cancellation of any security filed with the department.

126.31(6)(a)2. 2. The grain warehouse keeper fails to provide required information that is relevant to a determination of security requirements.

126.31(6)(b) (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.

126.31(6)(c) (c) A grain warehouse keeper 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.

126.31(6)(d) (d) If a grain warehouse keeper fails to comply with the department’s demand for security under this subsection, the grain warehouse keeper shall give written notice of that fact to all depositors. If the grain warehouse keeper 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 depositors by publishing a class 3 notice under ch. 985. The department may also give individual notice to depositors of whom the department is aware.

126.31(6)(e) (e) If a grain warehouse keeper fails to comply with the department’s demand for security under this subsection, the department may do any of the following:

126.31(6)(e)1. 1. Issue an appropriate summary order under s. 126.85 (2).

126.31(6)(e)2. 2. Suspend or revoke the grain warehouse keeper’s license.

126.31(7) (7) Monthly reports. A grain warehouse keeper who is required to file or maintain security under this section shall file monthly reports with the department. The grain warehouse keeper shall file the report by the 10th day of each month, in a form specified by the department. In a monthly report, the grain warehouse keeper shall provide information reasonably required by the department, including the amount of each type of grain stored in each grain warehouse on the last day of the preceding month.

126.31(8) (8) Releasing security.

126.31(8)(a) (a) The department may release security filed under sub. (1) (a) if any of the following applies:

126.31(8)(a)1. 1. The grain warehouse keeper reports grain warehouse capacity under s. 126.26 (2) (e) of less than 300,000 bushels for at least 2 consecutive license years and the grain warehouse keeper pays the quarterly fund assessment that would have been required of the grain warehouse keeper if the grain warehouse keeper had been a contributing grain warehouse keeper on the most recent quarterly installment date under s. 126.30 (6).

126.31(8)(a)2. 2. The grain warehouse keeper’s annual financial statement under s. 126.28 shows positive equity for at least 2 consecutive years and the grain warehouse keeper pays the quarterly fund assessment that would have been required of the grain warehouse keeper if the grain warehouse keeper had been a contributing grain warehouse keeper on the most recent quarterly installment date under s. 126.30 (6).

126.31(8)(am) (am) The department may release security filed under sub. (1) (b), except for any amount of security that the grain warehouse keeper is required to file because sub. (1) (a) applies to the grain warehouse keeper, if the grain warehouse keeper files 2 consecutive annual financial statements under s. 126.28 showing that the grain warehouse keeper no longer has negative equity, a current ratio of less than 1.25 to 1.0, or a debt to equity ratio of more than 4.0 to 1.0.

126.31(8)(c) (c) The department may release security to the extent that the security exceeds the amount required under sub. (3).

126.31(8)(d) (d) The department may release security if the grain warehouse keeper files alternative security, of equivalent value, that the department approves.

126.31(8)(e) (e) The department shall release security if the grain warehouse keeper has gone out of business and has fulfilled all grain obligations to depositors.

126.31 History History: 2001 a. 16; 2003 a. 38, 320; 2009 a. 296.

126.32 126.32 Grain warehouse keepers; records.

126.32(1) (1) Records and accounts; general. A grain warehouse keeper shall maintain current, complete, and accurate records and accounts of all grain received into and withdrawn from each grain warehouse, including records required under subs. (2) and (3).

126.32(2) (2) Daily position records. A grain warehouse keeper shall keep daily position records for each type of grain, so that the grain warehouse keeper and the department can easily determine all of the following on a daily basis:

126.32(2)(a) (a) The total amount of grain held by the warehouse keeper, including grain under pars. (b) and (c).

126.32(2)(b) (b) The total amount of grain that the warehouse keeper holds for others.

126.32(2)(c) (c) The total amount of grain held by the warehouse keeper of which the warehouse keeper claims ownership.

126.32(2)(d) (d) The warehouse keeper’s total grain obligations to depositors.

126.32(3) (3) Depositor records. A grain warehouse keeper shall keep for each depositor, in a form that the grain warehouse keeper and the department can easily retrieve, records of all of the following:

126.32(3)(a) (a) The depositor’s name and address.

126.32(3)(b) (b) The kinds and amounts of grain that the grain warehouse keeper received from the depositor, the receipt dates, and the terms under which the grain warehouse keeper received the grain.

126.32(3)(c) (c) The kinds and amounts of grain that the grain warehouse keeper has released to the depositor and the release dates.

126.32(3)(d) (d) The kinds and amounts of grain that the grain warehouse keeper holds for the depositor. The grain warehouse keeper shall update this record on a daily basis.

126.32(4) (4) Adjusting records.

126.32(4)(a) (a) Whenever a grain warehouse keeper alters a record entry under sub. (2) or (3), the grain warehouse keeper shall clearly identify and explain the alteration so that the reason for the alteration is clear to a person reviewing the records.

126.32(4)(b) (b) Except as provided in par. (c), a grain warehouse keeper may not alter a record entry under sub. (2) or (3) without the department’s prior approval.

126.32(4)(c) (c) A grain warehouse keeper may, without the department’s prior approval, correct a record entry under sub. (2) or (3) for any of the following reasons:

126.32(4)(c)1. 1. To account for handling losses, if the warehouse keeper corrects for handling losses at least monthly.

126.32(4)(c)2. 2. To account for errors or omissions related to the receipt or withdrawal of grain, if the warehouse keeper has documentation to support the correction.

126.32(5) (5) Records retention; availability.

126.32(5)(a) (a) A grain warehouse keeper shall retain all records required under this section and s. 126.33 (3) for at least 6 years from the date of their creation.

126.32(5)(b) (b) If a grain warehouse keeper keeps records under subs. (2) and (3) in computerized form, the grain warehouse keeper shall generate a hard copy printout for each business day unless the grain warehouse keeper retains the ability to retrieve and print that day’s computerized record for at least 6 years.

126.32(5)(c) (c) A grain warehouse keeper shall make records required under this section available to the department for inspection and copying upon request.

126.32(6) (6) Reviewing records.

126.32(6)(a) (a) The department shall review the records that a grain warehouse keeper is required to keep under this section. The department shall review a grain warehouse keeper’s records at least annually, except as provided in par. (b).

126.32(6)(b) (b) The department shall review a grain warehouse keeper’s records at least once every 2 years if the grain warehouse keeper files an annual financial statement under s. 126.28 and that annual financial statement shows a current ratio of at least 2.0 to 1.0, positive equity, and a debt to equity ratio of not more than 2.0 to 1.0.

126.32 History History: 2001 a. 16; 2009 a. 296.

126.33 126.33 Receipts for grain.

126.33(1) (1) Requirement. Immediately after a grain warehouse keeper receives grain from a depositor, the grain warehouse keeper shall give the depositor a warehouse receipt or other storage receipt that includes all of the following:

126.33(1)(a) (a) The name and permanent address of the grain warehouse keeper, the location of the grain warehouse, and a statement indicating whether the grain warehouse keeper is a corporation.

126.33(1)(b) (b) A statement identifying the document as a warehouse receipt or other storage receipt.

126.33(1)(c) (c) The date on which the grain warehouse keeper received the grain.

126.33(1)(d) (d) The kind of grain received.

126.33(1)(e) (e) The net weight of grain received.

126.33(1)(f) (f) The grade and quality of grain received, if determined.

126.33(1)(g) (g) The word “negotiable” or “nonnegotiable,” conspicuously, if the document is issued as a warehouse receipt. If a grain warehouse keeper transfers depositor-owned grain to another warehouse keeper, the receiving grain warehouse keeper shall issue a receipt that conspicuously bears the word “nonnegotiable.”

126.33(1)(h) (h) A statement indicating that the depositor must remove the grain from storage by a specified date that is not more than 3 years after the date of deposit. This requirement does not apply to any of the following:

126.33(1)(h)1. 1. A warehouse receipt.

126.33(1)(h)2. 2. A receipt for grain owned by the federal commodity credit corporation.

126.33(1)(h)3. 3. A receipt for grain pledged as collateral for a loan from the federal department of agriculture.

126.33(2) (2) Grain ownership. If a person delivers grain to a recipient who is both a grain warehouse keeper and a grain dealer, as defined in s. 126.10 (9), the delivery is considered a deposit for storage unless it is clearly documented as a delivery of purchased grain. A receipt issued by such a recipient is considered a storage receipt unless it is clearly designated as a receipt for the delivery of purchased grain.

126.33(3) (3) Warehouse keeper’s copy. A grain warehouse keeper shall keep a copy of every warehouse receipt and other document that the grain warehouse keeper issues under sub. (1). The grain warehouse keeper shall retain a copy of each document for at least 6 years after the grain warehouse keeper issues the document and shall make copies available to the department for inspection and copying upon request.

126.33 History History: 2001 a. 16.

126.34 126.34 Grain warehouse keepers; business practices.

126.34(1) (1) Grain weight, grade, and quality. A grain warehouse keeper shall do all of the following when determining the weight, grade, or quality of grain:

126.34(1)(a) (a) Accurately determine the weight, grade, or quality using accurate weighing, testing, or grading equipment.

126.34(1)(b) (b) Accurately record the determined weight, grade, or quality.

126.34(2) (2) Care of grain; facilities. A grain warehouse keeper shall safeguard grain held for others and shall protect that grain from loss or abnormal deterioration. A grain warehouse keeper shall maintain adequate facilities and equipment for that purpose.

126.34(3) (3) Sufficient inventory. A grain warehouse keeper shall at all times maintain grain inventories sufficient in quantity and quality to meet all outstanding obligations to depositors.

126.34(4) (4) Returning grain to depositors.