100.03(1)(ym)2.
2. Reviewed according to generally accepted accounting principles by an independent certified public accountant or a public accountant holding a certificate of authority under
ch. 442.
100.03(1)(z)
(z) "Statement of cash flows" means a report of cash receipts and cash payments from operating, investing and financing activities, including an explanation of changes in cash and cash equivalents for the period applicable to the report.
100.03(1)(zm)
(zm) "Subsidiary" means a corporation or business entity that is owned, controlled or operated by an operator, and that procures a vegetable for use by the operator.
100.03(1)(zs)
(zs) "Vegetable" means any vegetable that is grown or sold for use in food processing, whether or not that vegetable is actually processed as food. "Vegetable" includes sweet corn, but does not include grain.
100.03(2)(a)(a)
Requirement. No contractor may enter into a procurement contract with a producer unless the contractor holds a registration certificate from the department. A registration certificate expires on January 31 annually and is not transferable.
100.03(2)(b)
(b)
Application. Application for a registration certificate shall be made on a form provided by the department. The application shall be accompanied by all of the following:
100.03(3)(a)(a)
Registration fees. A contractor who applies for a registration certificate under
sub. (2) shall pay all of the following:
100.03(3)(a)2.
2. Unless the department by rule establishes a different fee, a fee of one cent for each $100 in the total contractual obligations reported under
sub. (4) (a). The fee under this subdivision is not required if all vegetable grading is performed or supervised by the department under contract with the contractor.
100.03(3)(a)3.
3. Unless otherwise established by department rule, a fee of 3 cents for each $100 in the total contractual obligation reported under
sub. (4) (a).
100.03(3)(b)
(b)
Surcharge for operating without a registration certificate. A contractor who applies for a registration certificate under
sub. (2) shall pay a surcharge of $500 if the department determines that, within 365 days before submitting the application, the contractor procured a vegetable from a producer without a registration certificate in violation of
sub. (2). Payment of the surcharge does not relieve the contractor of any other civil or criminal liability that results from the procurement of the vegetable, but it does not constitute evidence of any law violation.
100.03(4)
(4) Statement to accompany application. An application for a registration certificate under
sub. (2) shall be accompanied by a sworn and notarized statement, signed by the contractor or an officer of the contractor, which states all of the following:
100.03(4)(a)
(a) The contractor's total paid and unpaid contractual obligations to producers, for vegetables tendered or delivered, that have accrued during the registration year immediately preceding the registration year for which application is made.
100.03(4)(b)
(b) The contractor's maximum liability to producers during the year immediately preceding the registration year for which application is made, if applicable.
100.03(4)(c)
(c) The contractor's anticipated maximum liability to producers during the registration year for which application is made. The application shall state if the contractor anticipates a maximum liability of zero. If so, the application also shall state whether the contractor anticipates a maximum liability of zero because the contractor plans to make cash payment on delivery under every procurement contract, or because the contractor plans to procure all vegetables from another contractor. A contractor shall immediately notify the department in writing if, at any time during the registration year, the contractor has reason to believe that the contractor's maximum liability will exceed the maximum liability previously anticipated and reported to the department.
100.03(4)(d)
(d) Whether, on the date of application, the contractor has failed to pay a liability to a producer which is due and payable before that date.
100.03(4)(e)
(e) Whether the contractor and the contractor's affiliates and subsidiaries will collectively grow more than 10% of the acreage of any vegetable species grown or procured by the contractor during the registration year for which application is made, as provided under
s. 100.235 (3).
100.03(4)(f)
(f) Whether the contractor is a producer-owned cooperative or organization doing business on a cooperative pooling basis with its producer owners, and whether the producer-owned cooperative or organization procures any vegetables from producers who are not its producer owners.
100.03(4m)
(4m) Residual payment liability. As part of or in addition to the statement required by
sub. (4), the contractor or officer of the contractor shall submit a sworn and notarized statement indicating whether the contractor has failed to pay any liability to a producer that became due and payable during the registration year ending January 31. The statement shall be submitted before February 5. The statement may not be submitted before February 1, except that the statement may be submitted at such earlier time as the contractor has paid all liabilities to producers that are due and payable on or before January 31.
100.03(5)(a)1.1. Except as provided under
par. (c), a contractor who applies for an initial registration certificate under
sub. (2) shall file a financial statement with the application.
100.03(5)(a)2.
2. Except as provided under
par. (c), a contractor shall file an annual financial statement with the department as a condition to the renewal or continuation of the contractor's registration certificate under
sub. (2). An annual financial statement shall be filed by the 15th day of the 4th month commencing after the close of the contractor's fiscal year, except that the department may, for cause, extend the deadline for filing the annual financial statement for up to 30 days.
100.03(5)(am)
(am)
Interim statement. Except as provided in
par. (c), a contractor shall file an interim statement as of the quarter that ends closest to November 30 with each application for renewal.
100.03(5)(b)
(b)
Additional financial statement. Notwithstanding
par. (c), the department may require a contractor to file an annual financial statement or interim statement at any time. The department may require that a financial statement required under this paragraph be an audited financial statement or a reviewed financial statement.
100.03(5)(c)1.
1. A contractor who either plans to make payment on delivery for all vegetables tendered or delivered by producers, or to procure all vegetables from another contractor, and who submits a sworn and notarized statement to that effect under
sub. (4) (c).
100.03(5)(c)2.
2. A contractor who files security with the department under
sub. (8), except for a contractor who files security under
sub. (8) (cm).
100.03(5)(c)3.
3. A producer-owned cooperative or organization that procures vegetables solely on a cooperative pooling basis from its producer owners, and that submits under
sub. (4) a sworn and notarized statement to that effect.
100.03(5)(d)
(d)
Financial statement contents. A financial statement under this subsection shall consist of a balance sheet, income statement, equity statement, statement of cash flows, and any other information required by the department. A financial statement shall be prepared in conformity with generally accepted accounting principles.
100.03(5)(e)
(e)
Audited or reviewed financial statement. A financial statement under
par. (a) shall be an audited financial statement or a reviewed financial statement, except that if during the year to which that financial statement pertains a contractor incurred total contractual obligations to producers, as reported under
sub. (4) (a), of more than $250,000, the financial statement under
par. (a) shall be an audited financial statement.
100.03(5)(f)
(f)
Closed to public inspection. A financial statement under this subsection is not available for public inspection under
s. 19.35. The department may use a financial statement in an enforcement action, administrative proceeding or court proceeding, and in that action or proceeding may release the financial statement to the parties, the hearing officer or the court under such conditions as the department or court considers appropriate. Except by agreement of the parties, a financial statement may not be made a part of the public record in an administrative or court proceeding, except as ordered by a court.
100.03(6)(a)(a)
Full payment required. Except as provided under
par. (c) or
(d), the department may not issue or renew a registration certificate under
sub. (2) unless the contractor has submitted a statement under
sub. (4m) that shows that the contractor has paid all liabilities to producers that are due and payable before January 31. Notwithstanding
par. (b), a contractor shall make payment on delivery unless the contractor meets the minimum financial standards under
sub. (7) or files security with the department under
sub. (8).
100.03(6)(b)1.1. If a procurement contract does not specify a payment date in writing, the contractor shall pay a liability to a producer by the 15th day of the month immediately following the month in which the producer tendered or delivered the vegetables under the contract, or by an earlier date agreed upon between the parties.
100.03(6)(b)2.
2. If a procurement contract specifies a payment date in writing, payment shall be made by the specified date. No contract may specify a payment date in violation of
subd. 3. or
4.
100.03(6)(b)3.
3. By January 31 of each registration year, a contractor shall pay for all vegetables that were delivered by producers on or before December 31 of that registration year. This requirement does not apply if a written contract specifying a later payment date was approved by a vote of producers who delivered vegetables to the contractor during the preceding registration year. To obtain the approval of producers, a contractor shall give advance written notice to every eligible producer. The notice shall include a copy of the proposed contract and shall announce a meeting at which producers will be asked to vote on the proposed contract. The notice shall also include a mail ballot by which a producer may cast his or her vote without attending the meeting. Voting shall be by secret ballot. The proposed contract shall be approved by a majority of the producers who vote on the proposed contract. The contractor shall file a sworn statement with the department, on a form provided by the department, certifying the results of the balloting.
100.03(6)(b)4.
4. If a producer tenders or delivers vegetables to a contractor after December 31 of any registration year, the contractor shall pay the producer for the vegetables by the 15th day of the month following the month in which the vegetables were tendered or delivered, or by the 30th day after tender or delivery, whichever is later.
100.03(6)(c)
(c)
Disputed producer obligations. If a contractor is unable to satisfy the requirement under
par. (a) solely because the amount of a liability to a producer is disputed, the department may issue or renew the contractor's registration certificate if the contractor deposits the disputed amount in escrow with the department, pending resolution of the dispute.
100.03(6)(d)
(d)
Producer-owned cooperatives exempt. This subsection does not apply to a producer-owned cooperative or organization doing business solely on a cooperative pooling basis with its producer owners.
100.03(7)(a)(a)
Requirement. Except as provided under
par. (c), a contractor shall meet all of the following financial standards:
100.03(7)(a)1.
1. A minimum ratio of current assets to current liabilities of 1.2 to 1.0 on its annual financial statement.
100.03(7)(a)2.
2. A minimum ratio of current assets to current liabilities of 1.0 to 1.0 at all times of the year other than the end of the contractor's fiscal year.
100.03(7)(a)3.
3. Equity equal to at least 20% of total assets on its annual financial statement and at least 10% at all other times.
100.03(7)(b)
(b)
Notification of changes. A contractor shall immediately notify the department if the contractor knows or has reason to know that the financial standards under
par. (a) are no longer being met.
100.03(7)(c)
(c)
Exemptions. Paragraph (a) does not apply to a contractor if any of the following applies:
100.03(7)(c)1.
1. The contractor makes payment on delivery for all vegetables obtained from producers.
100.03(7)(c)3.
3. The contractor is a producer-owned cooperative organization doing business solely on a cooperative pooling basis with its producer owners.
100.03(8)(a)(a)
Requirement. A contractor shall file security with the department under this subsection unless one or more of the following apply:
100.03(8)(a)1.
1. The contractor makes payment on delivery for all farm products obtained from producers.
100.03(8)(a)2.
2. The contractor meets the minimum financial standards under
sub. (7).
100.03(8)(a)3.
3. The contractor is a producer-owned cooperative or organization doing business solely on a cooperative pooling basis with its producer owners.
100.03(8)(b)
(b)
Form of security. Security filed with the department under this subsection shall be in one or more of the following forms:
100.03(8)(b)1.
1. A continuous surety bond payable to the department on a form approved by the department and endorsed by a surety company licensed to do business in this state.
100.03(8)(b)3.
3. Stocks, bonds or other marketable securities at current market value.
100.03(8)(b)4.
4. Irrevocable bank letters of credit issued for a term of at least 6 months beyond the date on which final payment is due the producers.
100.03(8)(b)5.
5. Personal surety bonds or other 3rd-party guarantees that are supported by security under
subd. 2. or
3.
100.03(8)(bg)
(bg) Department custody of security. The department or the department's agent shall hold under custody any of the forms of security filed under
par. (b) 1. to
5.
100.03(8)(c)
(c)
Amount of security. Security under this subsection shall be in an amount equal to at least 75% of the contractor's anticipated maximum liability during the registration year for which application is made.
100.03(8)(cm)
(cm)
Transitional security amounts. Notwithstanding
par. (c), a contractor who does not meet the financial standards under
sub. (7) but who does have a ratio of current assets to current liabilities of at least 1.2 to 1.0 on its annual financial statement and whose total assets exceed total liabilities shall file security in at least the following amounts for the license years indicated:
100.03(8)(cm)1.
1. For the first license year beginning after July 11, 1996, 25% of the contractor's anticipated maximum liability to growers of vegetables.
100.03(8)(cm)2.
2. For the 2nd license year beginning after July 11, 1996, 50% of the contractor's anticipated maximum liability to growers of vegetables.
100.03(8)(d)
(d)
Release of security. Security filed under this subsection may be released only if one of the following occurs:
100.03(8)(d)1.
1. The contractor achieves and maintains for 2 consecutive registration years the minimum financial standards under
sub. (7).
100.03(8)(d)2.
2. The contractor demonstrates to the department's satisfaction that the contractor is able to pay liabilities to producers when due because of a substantial reduction in maximum liability or other reasons.
100.03(8)(e)
(e)
Prohibition. No contractor may assess a separate line item deduction from the payment to the grower to recover the cost of security filed under this section.
100.03(9)
(9) Producer claims; default proceedings. 100.03(9)(a)(a)
Filing claims. If a producer claims that a contractor has failed to pay a liability to that producer when due, the producer may file a written claim with the department. Upon receipt of a producer claim, or other evidence of default on the part of a contractor, the department may initiate a default proceeding under this subsection. Before initiating a default proceeding, the department may inspect the contractor's records under
sub. (16), and conduct any investigation that it considers appropriate.
100.03(9)(b)
(b)
Initiating default proceeding; order to producer claimants. To initiate a default proceeding, the department shall issue an order requiring all interested producers to file verified proofs of claim with the department before a specified date or be barred from participating in any recovery obtained by the department. Notice of the order shall be published as follows:
100.03(9)(b)1.
1. By posting a copy of the order in a prominent location at each place of business in this state operated by the contractor.
100.03(9)(b)2.
2. By mailing a copy of the order to the contractor, and to the trustee or surety, if any.
100.03(9)(b)3.
3. By publishing the contents of the order as a class 3 notice under
ch. 985. The date of the last insertion of the class 3 notice under
ch. 985 shall be not less than 30 days before the deadline date for filing claims.
100.03(9)(b)4.
4. If based on the contractor's records or other information the department obtains the names and addresses of other producers who appear to have an unpaid claim against the contractor, by mailing a copy of the order or equivalent notice to each of those producers. In its notice, the department may indicate the amount of the producer's apparent claim, and ask the producer to verify or correct that claim on or before the claim filing deadline.
100.03(9)(b)5.
5. By any additional method which the department considers necessary and appropriate.
100.03(9)(c)
(c)
Audit; proposed order. If a default proceeding is initiated, the department shall audit producer claims filed with the department and shall issue a proposed order allowing or disallowing claims. The proposed order shall be based on proposed findings of fact and conclusions of law which shall accompany the proposed order. A copy of the proposed order shall be mailed to the contractor, to the trustee or surety, if any, and to every producer who filed a claim in the proceeding.
100.03(9)(d)
(d)
Untimely claims disallowed. Claims filed after the deadline date specified under
par. (b) shall be disallowed unless the department waives the deadline date for good cause shown. A claim shall be disallowed if payment was due more than 60 days before the date on which the first written notice of default was received by the department.
100.03(9)(e)
(e)
Notice and hearing. The department shall hold a public hearing on its proposed order under
par. (c). A notice of hearing shall be issued to each person who is required to receive a copy of that order. The notice of hearing shall comply with
s. 227.44. The notice of hearing may require affected parties to file objections to the proposed order, if any, in writing before the date of hearing. The hearing examiner may hold a prehearing conference before the hearing, and may reschedule or continue the hearing as necessary. The hearing and related proceedings shall be conducted under
ch. 227.
100.03(9)(f)
(f)
Final order after hearing. Before issuing its final decision and order, the department shall follow the procedure prescribed under
s. 227.46, except that if after the hearing under
par. (e) there are no objections to the proposed order under
par. (c) the department may adopt the proposed order as the final decision and order of the department, without further notice or hearing.
100.03(9)(g)
(g)
Interest on claims. If the department's proposed or final order allows a producer claim, the order shall also require the contractor to pay interest on the claim, at a rate determined by the department by rule, computed from the date on which payment was first due.
