126.15(6m)(a)
(a) Divide the amount of security that the grain dealer is required to file as determined under
s. 126.16 (3) (b) by the amount of the grain dealer's estimated default exposure, as defined in
s. 126.16 (1) (c) 1.
126.15(6m)(b)
(b) Multiply the amount of the assessment determined under
sub. (1) by the amount determined under
par. (a).
126.15(7)(a)(a) A contributing grain dealer shall pay the grain dealer's annual fund assessment in equal quarterly installments that are due as follows:
126.15(7)(a)1.
1. The first installment is due on October 1 of the license year.
126.15(7)(a)2.
2. The 2nd installment is due on January 1 of the license year.
126.15(7)(a)3.
3. The 3rd installment is due on April 1 of the license year.
126.15(7)(a)4.
4. The 4th installment is due on July 1 of the license year.
126.15(7)(b)
(b) A contributing grain dealer may prepay any of the quarterly installments under
par. (a).
126.15(7)(c)
(c) A contributing grain dealer who applies for an annual license after the beginning of a license year shall pay the full annual fund assessment required under this section. The grain dealer shall pay, with the first quarterly installment that becomes due after the day on which the department issues the license, all of that year's quarterly installments that became due before that day.
126.15(7)(d)
(d) A contributing grain dealer who fails to pay the full amount of any quarterly installment when due shall pay, in addition to that installment, a late payment penalty of $50 or 10% of the overdue installment amount, whichever is greater.
126.15(8)
(8) Notice of annual assessment and quarterly installments. When the department issues an annual license to a contributing grain dealer, the department shall notify the grain dealer of all of the following:
126.15(8)(a)
(a) The amount of the grain dealer's annual fund assessment under this section.
126.15(8)(b)
(b) The amount of each required quarterly installment under
sub. (7) and the date by which the grain dealer must pay each installment.
126.15(8)(c)
(c) The penalty that applies under
sub. (7) (d) if the grain dealer fails to pay any quarterly installment when due.
126.15 History
History: 2001 a. 16;
2003 a. 38.
126.16
126.16
Grain dealers; security. 126.16(1)(a)(a) A grain dealer shall file security with the department, and maintain that security until the department releases it under
sub. (8) (a), if all of the following apply when the department first licenses the grain dealer under
s. 126.11:
126.16(1)(a)2.
2. The grain dealer files an annual financial statement under
s. 126.13 (1) (a) and that financial statement shows negative equity.
126.16(1)(b)
(b) A grain dealer who reports any deferred payment contract obligations under
s. 126.11 (9) (c) or
126.13 (1) (d) shall file security with the department, and maintain that security until the department releases it under
sub. (8) (b), unless the grain dealer has positive equity and one of the following applies:
126.16(1)(b)1.
1. The grain dealer's annual financial statement under
s. 126.13 covers a fiscal year ending on or before January 1, 2006, and shows a debt to equity ratio of not more than 5.0 to 1.0.
126.16(1)(b)2.
2. The grain dealer's annual financial statement under
s. 126.13 covers a fiscal year ending after January 1, 2006, and shows a debt to equity ratio of not more than 4.0 to 1.0.
126.16(1)(c)1.1. In this paragraph, "estimated default exposure" means the sum of the following:
126.16(1)(c)1.a.
a. Thirty-five percent of the grain dealer's average monthly payment for the 3 months, during the preceding 12 months, in which the grain dealer made the largest monthly payments for producer grain procured in this state.
126.16(1)(c)1.b.
b. The grain dealer's highest total, at any time during the preceding 12 months, of unpaid obligations for producer grain procured in this state under deferred payment contracts.
126.16(1)(c)2.
2. A grain dealer shall file security with the department, and maintain that security until the department releases it under
sub. (8) (bm), if the grain dealer files an annual financial statement under
s. 126.13 (1) that shows 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 and the grain dealer's estimated default exposure is greater than the following amount:
126.16(1)(c)2.a.
a. For the license year beginning on September 1, 2003, $18,000,000.
126.16(1)(c)2.b.
b. For the license year beginning on September 1, 2004, $19,000,000.
126.16(1)(c)2.c.
c. For a license year that begins on September 1, 2005, or later, $20,000,000.
126.16(2)
(2) Security continued. A grain dealer who filed security under ch.
127, 1999 stats., before September 1, 2002, shall maintain that security until the department releases it under
sub. (8) (c).
126.16(3)(a)(a) Except as provided in
par. (b), a grain dealer who is required to file or maintain security under this section shall at all times maintain security that is at least equal to the sum of the following:
126.16(3)(a)1.
1. Thirty-five percent of the grain dealer's average monthly payment for the 3 months, during the preceding 12 months, in which the grain dealer made the largest monthly payments for producer grain procured in this state, except that this amount is not required of a contributing grain dealer.
126.16(3)(a)2.
2. The grain dealer's highest total, at any time during the preceding 12 months, of unpaid obligations for producer grain procured in this state under deferred payment contracts.
126.16(3)(b)
(b) A grain dealer who is only required to file or maintain security under
sub. (1) (c) shall at all times maintain security equal to the grain dealer's estimated default exposure, as defined in
sub. (1) (c) 1., less the following amount:
126.16(3)(b)1.
1. For the license year beginning on September 1, 2003, $18,000,000.
126.16(3)(b)2.
2. For the license year beginning on September 1, 2004, $19,000,000.
126.16(3)(b)3.
3. For a license year that begins on September 1, 2005, or later, $20,000,000.
126.16(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:
126.16(4)(b)
(b) A commercial surety bond if all of the following apply:
126.16(4)(b)1.
1. The surety bond is made payable to the department for the benefit of grain producers and producer agents.
126.16(4)(b)2.
2. The surety bond is issued by a person authorized to operate a surety business in this state.
126.16(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.
126.16(4)(b)4.
4. The surety bond is issued in a form, and subject to any terms and conditions, that the department considers appropriate.
126.16(4)(c)
(c) A certificate of deposit or money market certificate if all of the following apply:
126.16(4)(c)1.
1. The certificate is issued or endorsed to the department for the benefit of grain producers and producer agents who deliver grain to the grain dealer.
126.16(4)(c)2.
2. The certificate may not be canceled or redeemed without the department's written authorization.
126.16(4)(c)3.
3. No person may transfer or withdraw funds represented by the certificate without the department's written permission.
126.16(4)(c)4.
4. The certificate renews automatically without any action by the department.
126.16(4)(c)5.
5. The certificate is issued in a form, and subject to any terms and conditions, that the department considers appropriate.
126.16(4)(d)
(d) An irrevocable bank letter of credit if all of the following apply:
126.16(4)(d)1.
1. The letter of credit is payable to the department for the benefit of grain producers and producer agents.
126.16(4)(d)3.
3. The letter of credit is issued for an initial period of at least one year.
126.16(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.
126.16(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.
126.16(4)(e)
(e) Security filed under ch.
127, 1999 stats., before September 1, 2002, except that on January 1, 2003, the department shall withdraw its approval of any security that is not approvable under
pars. (a) to
(d).
126.16(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 grain producers and producer agents who deliver grain to a grain dealer.
126.16(6)
(6) Monthly reports. A grain dealer who is required to file or maintain security under this section shall file monthly reports with the department. The grain dealer shall file a report on or before the 10th day of each month, in a form specified by the department. In a monthly report, a grain dealer shall provide information reasonably required by the department, including all of the following:
126.16(6)(a)
(a) The grain dealer's average monthly payment for the 3 months, during the preceding 12 months, in which the grain dealer made the largest monthly payments for producer grain procured in this state.
126.16(6)(b)
(b) The grain dealer's highest total unpaid obligations, at any time during the preceding 12 months, for producer grain procured in this state under deferred payment contracts. If the amount owed on deferred price contracts has not yet been determined, the grain dealer shall estimate the amount based on contract terms and prevailing market prices on the last day of the previous month.
126.16(7)(a)(a) The department may, at any time, demand additional security from a grain dealer if any of the following applies:
126.16(7)(a)1.
1. The grain dealer's existing security falls below the amount required under
sub. (3) for any reason, including depreciation in the value of the security filed with the department, an increase in grain payments or grain prices, or the cancellation of any security filed with the department.
126.16(7)(a)2.
2. The grain dealer fails to provide required information that is relevant to a determination of security requirements.
126.16(7)(b)
(b) The department shall issue a demand under
par. (a) in writing. The department shall indicate why the 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.
126.16(7)(c)
(c) A grain dealer 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.
126.16(7)(d)
(d) If a grain dealer fails to comply with the department's demand for security under this subsection, the grain dealer shall give written notice of that fact to all grain producers and producer agents from whom the grain dealer procures producer grain in this state. If the grain dealer 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 those grain producers and producer agents by publishing a class 3 notice under
ch. 985. The department may also give individual notice to those grain producers or producer agents of whom the department is aware.
126.16(7)(e)
(e) If a grain dealer fails to comply with the department's demand for security under this subsection, the department may do any of the following:
126.16(7)(e)1.
1. Issue a summary order under
s. 126.85 (2) that prohibits the grain dealer from procuring producer grain or requires the grain dealer to pay cash on delivery for all producer grain.
126.16(8)(a)(a) The department may release security filed under
sub. (1) (a), except for any amount of security that the grain dealer is required to file because
sub. (1) (b) or
(c) applies to the grain dealer, if any of the following applies:
126.16(8)(a)1.
1. The grain dealer reports, for at least 2 consecutive years, no more than $500,000 in annual grain payments under
s. 126.11 (9) (a) and the grain dealer pays the quarterly fund assessment that would have been required of the grain dealer if the grain dealer had been a contributing grain dealer on the most recent quarterly installment date under
s. 126.15 (7).
126.16(8)(a)2.
2. The grain dealer's annual financial statement under
s. 126.13 shows positive equity for at least 2 consecutive years and the grain dealer pays the quarterly fund assessment that would have been required of the grain dealer if the grain dealer had been a contributing grain dealer on the most recent quarterly installment date under
s. 126.15 (7).
126.16(8)(b)
(b) The department may release security filed under
sub. (1) (b), except for any amount of security that the grain dealer is required to file because
sub. (1) (a) or
(c) applies to the grain dealer, if any of the following applies:
126.16(8)(b)1.
1. The grain dealer has not had any deferred payment contract obligations since the beginning of the grain dealer's last completed fiscal year.
126.16(8)(b)2.
2. The grain dealer files 2 consecutive annual financial statements under
s. 126.13 showing that the grain dealer meets the applicable equity requirement and debt to equity ratio under
sub. (1) (b).
126.16(8)(bm)
(bm) The department may release security filed under
sub. (1) (c), except for any amount of security that the grain dealer is required to file because
sub. (1) (a) or
(b) applies to the grain dealer, if the grain dealer files 2 consecutive annual financial statements under
s. 126.13 showing that the grain dealer 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.
126.16(8)(c)
(c) On December 1, 2002, the department may release security maintained under
sub. (2), unless the grain dealer is required to file security under
sub. (1).
126.16(8)(d)
(d) The department may release security to the extent that the security exceeds the amount required under
sub. (3).
126.16(8)(e)
(e) The department may release security if the grain dealer files alternative security, of equivalent value, that the department approves.
126.16(8)(f)
(f) The department shall release security if the grain dealer is no longer in business and has paid all grain obligations in full.
126.16 History
History: 2001 a. 16,
104;
2003 a. 38.
126.17
126.17
Grain dealers; records.
