Chapter 126

126.70(8) (8) Objections to proposed decision; notice, hearing, and final decision.

126.70(8)(a) (a) If a contractor or claimant files a timely written objection to the proposed decision under sub. (6), the department shall hold a public hearing on the objection. The department shall follow applicable contested case procedures under ch. 227. The department may hear all objections in a single proceeding. At the conclusion of the contested case proceeding, the department shall issue a final decision affirming or modifying the proposed decision under sub. (6).

126.70(8)(b) (b) The department may issue a final decision under sub. (7) related to default claims that are not affected by objections under par. (a), regardless of whether the department has completed the contested case proceeding under par. (a).

126.70 History History: 2001 a. 16; 2009 a. 296; 2017 a. 155.

126.71 126.71 Paying default claims.

126.71(1) (1) Claims against contributing contractor. Except as provided in sub. (2) or (3), the department shall pay from the appropriate sources under s. 126.72 the following default claim amounts:

126.71(1)(a) (a) For each default claim allowed under s. 126.70 against a grain dealer or milk contractor who was a contributing contractor when the default occurred:

126.71(1)(a)1. 1. Eighty percent of the first $60,000 allowed.

126.71(1)(a)2. 2. Seventy-five percent of any amount allowed in excess of $60,000.

126.71(1)(b) (b) For each default claim allowed under s. 126.70 against a grain warehouse keeper who was a contributing contractor when the default occurred, 100 percent of the first $100,000 allowed.

126.71(1)(c) (c) For each default claim allowed under s. 126.70 against a vegetable contractor who was a contributing contractor when the default occurred:

126.71(1)(c)1. 1. Ninety percent of the first $40,000 allowed.

126.71(1)(c)2. 2. Eighty-five percent of the next $40,000 allowed.

126.71(1)(c)3. 3. Eighty percent of the next $40,000 allowed.

126.71(1)(c)4. 4. Seventy-five percent of any amount allowed in excess of $120,000.

126.71(1m) (1m) When default occurs. For the purposes of this chapter, a default occurs on the date on which payment or delivery becomes overdue.

126.71(2) (2) Claims against contractor who has filed security. If the department allows default claims under s. 126.70 against a contractor who has security on file with the department, the department shall convert that security and use the proceeds as follows:

126.71(2)(a) (a) If the contractor was not a contributing contractor when the default occurred, the department shall use the security proceeds to pay the full amount of the allowed claims, except that, if the security is not adequate to pay the full amount of the allowed claims, the department shall pay claimants on a prorated basis in proportion to their allowed claims.

126.71(2)(b) (b) If the contractor was a contributing contractor when the default occurred, the department shall use the security proceeds to reimburse the sources under s. 126.72 from which the department makes any claim payment under sub. (1). If the security amount exceeds the amount payable under sub. (1) from the sources under s. 126.72, the department shall use the remaining security proceeds to pay the balance of the allowed claims. If the security amount is not adequate to pay the full remaining balance, the department shall pay claimants on a prorated basis in proportion to their allowed claims.

126.71(2)(c) (c) Notwithstanding par. (b), if the contractor was a contributing contractor when the default occurred, the department may, at its discretion, pay claims directly from security proceeds rather than from a fund source under s. 126.72. If the department acts under this paragraph, the department shall first pay claims in the amounts provided in sub. (1). If the security amount exceeds the amount payable under sub. (1) from the sources under s. 126.72, the department shall use the remaining security proceeds to pay the balance of the allowed claims. If the security amount is not adequate to pay the full remaining balance, the department shall pay claimants on a prorated basis in proportion to their allowed claims.

126.71(3) (3) Payment restrictions.

126.71(3)(a) (a) The department may not pay any portion of the following from any source identified in s. 126.72:

126.71(3)(a)4. 4. A default claim allowed against a contractor who was not a contributing contractor when the default occurred.

126.71(3)(a)5. 5. A default claim allowed against a vegetable contractor who is a processing potato buyer, as defined in s. 126.55 (10r), if the default claim is related to a default on an obligation that was outstanding when the processing potato buyer’s participation in the fund became effective under s. 126.595 (2).

126.71(3)(b) (b) The department may not pay any default claim under this chapter, except as provided in sub. (1) or (2).

126.71(3)(c) (c) If the total amount of default claims exceeds the amount available under s. 126.72, the department shall prorate the available amount among the eligible claimants in proportion to the amount of their allowed claims.

126.71(4) (4) Effect of payment. A claimant who accepts payment under sub. (1) or (2) releases his or her claim against the contractor to the extent of the payment. A payment under sub. (1) or (2) does not prevent a claimant from recovering the balance of an allowed claim directly from the contractor.

126.71 History History: 2001 a. 16; 2003 a. 38; 2005 a. 80; 2009 a. 296.

126.72 126.72 Claims against contributing contractor; payment sources.

126.72(1) (1) Producer security fund. From the appropriation under s. 20.115 (1) (w), the department shall make payments authorized under s. 126.71 (1), up to the deductible amount in sub. (3).

126.72(2) (2) Proceeds of contingent financial backing. The department, at the direction of the secretary of agriculture, trade and consumer protection, shall draw on the contingent financial backing acquired under s. 126.06 to make payments authorized under s. 126.71 (1), to the extent that those payments exceed the deductible amount in sub. (3). If the contingent financial backing is in the form of a trade credit insurance policy that appears to cover the authorized payments, the department shall file a claim against the policy.

126.72(3) (3) Deductible amount. The deductible amount, for purposes of subs. (1) and (2), is 60 percent of the cash balance in the agricultural producer security fund on the last day of the month preceding the month in which the default occurs.

126.72 History History: 2001 a. 16; 2003 a. 38; 2009 a. 296.

126.73 126.73 Reimbursing payments.

126.73(1) (1) Generally. Except as provided in sub. (2) or (3), the department may demand and collect from a contractor any claim amounts that the department pays under s. 126.72 (1) or under s. 126.72 (2) with the proceeds of contingent financial backing under s. 126.06 (1) because of the contractor’s default.

126.73(2) (2) Bond payments. A bond surety may demand and collect, from a contractor, any claim amounts that the bond surety pays to the department under s. 126.72 (2) because of the contractor’s default. The bond surety shall provide the department with a copy of each demand under this subsection.

126.73(3) (3) Trade credit insurance payments. If the department files a claim against a trade credit insurance policy under s. 126.72 (2) and obtains and uses proceeds from the insurance policy to make payments authorized under s. 126.72 (2), the trade credit insurer may demand and collect the amount of those payments from the defaulting contractor.

126.73(4) (4) Subrogation. The department is subrogated to the rights of a claimant who obtains a payment under s. 126.72 (1) or (2) in an amount equal to the payment, against the defaulting contractor and against any party that would otherwise be liable to the claimant for the amount of the default.

126.73 History History: 2001 a. 16; 2003 a. 38; 2009 a. 296; 2017 a. 155.

subch. VIII of ch. 126 SUBCHAPTER VIII

ADMINISTRATION AND ENFORCEMENT

126.78 126.78 Definitions. In this subchapter:

126.78(1) (1) “Contributing contractor” has the meaning given in s. 126.68 (1).

126.78(2) (2) “Depositor” has the meaning given in s. 126.25 (5).

126.78(3) (3) “Grain dealer” has the meaning given in s. 126.10 (9).

126.78(4) (4) “Grain warehouse keeper” has the meaning given in s. 126.25 (9).

126.78(5) (5) “Milk contractor” has the meaning given in s. 126.40 (8).

126.78(6) (6) “Producer agent” means a person who is a producer agent, as defined in s. 126.10 (13), 126.40 (13), or 126.55 (12).

126.78(7) (7) “Vegetable contractor” has the meaning given in s. 126.55 (14).

126.78(8) (8) “Vegetable producer” has the meaning given in s. 126.55 (16).

126.78 History History: 2001 a. 16.

126.80 126.80 Department authority; general. The department shall administer this chapter.

126.80 History History: 2001 a. 16.

126.81 126.81 Rule-making.

126.81(1) (1) The department may promulgate rules to do any of the following:

126.81(1)(a) (a) Interpret and implement this chapter.

126.81(1)(b) (b) Modify the license fees and surcharges under s. 126.41 (3).

126.81(1)(c) (c) Specify additional circumstances for denying claims under s. 126.70 (4) (k).

126.81(1)(d) (d) Require a contractor to notify producers and producer agents of the contractor’s license, security, or fund contribution status under this chapter.

126.81(2m) (2m) The department shall promulgate rules to do all of the following:

126.81(2m)(a) (a) Specify license fees and surcharges under ss. 126.11 (4), 126.26 (3), and 126.56 (4).

126.81(2m)(b) (b) Specify fund assessments under s. 126.46 (1).

126.81 History History: 2001 a. 16; 2009 a. 296; 2011 a. 260 s. 80.

126.82 126.82 Investigations. The department may conduct investigations that it considers necessary for the administration of this chapter, including investigations to determine any of the following:

126.82(1) (1) Whether a contractor complies with this chapter.

126.82(2) (2) Whether a contractor is able to honor contract obligations when due.

126.82(3) (3) Whether a contractor has failed to honor contract obligations when due.

126.82(4) (4) Whether a grain warehouse keeper has sufficient grain on hand to meet the grain warehouse keeper’s obligations to depositors.

126.82(5) (5) The nature and amount of a contractor’s storage obligations or other contract obligations.

126.82 History History: 2001 a. 16.

126.83 126.83 Information. The department may require a contractor to provide information that is relevant to the administration and enforcement of this chapter.

126.83 History History: 2001 a. 16.

126.84 126.84 Records; confidentiality.

126.84(1) (1) Public records exemption. The following records obtained by the department under this chapter are not open to public inspection under s. 19.35:

126.84(1)(a) (a) Contractor financial statements.

126.84(1)(b) (b) A contractor’s purchase, storage, or procurement records.

126.84(2) (2) Use of records in court or administrative proceedings. Notwithstanding sub. (1), the department may introduce any information obtained under this chapter in a court proceeding or administrative contested case, subject to any protective order that the court or administrative tribunal determines to be appropriate.

126.84 History History: 2001 a. 16.

126.85 126.85 Remedial orders.

126.85(1) (1) General. The department may, by special order, require a contractor to remedy a violation of this chapter, a rule promulgated under this chapter, or a condition imposed under s. 126.86 (1). The department may order the contractor to take specific remedial actions, including actions to remedy deficiencies or to prevent losses to persons protected under this chapter. In an order under this subsection, the department may disqualify the contractor from the fund pending compliance with the order. Except as provided in sub. (2), the department shall give the contractor notice and an opportunity for hearing before the department issues an order.

126.85(2) (2) Summary order. The department may issue an order under sub. (1) without prior notice or hearing if the department finds that the order is necessary to prevent a clear and imminent threat of harm to persons protected under this chapter. Conditions indicating a clear and imminent threat of harm include the following:

126.85(2)(a) (a) A contractor fails to pay producers according to this chapter or according to the contractor’s contracts with producers.

126.85(2)(b) (b) A contractor fails to file replacement insurance within the time required under this chapter.

126.85(2)(c) (c) A contractor fails to file security according to this chapter, or in response to the department’s demand under this chapter.

126.85(2)(d) (d) A contractor fails to pay a fund assessment when due.

126.85(2)(e) (e) A vegetable contractor fails to pay vegetable producers by January 31 for vegetables delivered by December 31 of the previous year, except as authorized in a deferred payment contract.

126.85(2)(f) (f) A grain warehouse keeper fails to return grain to depositors upon demand, as required under s. 126.34 (4).

126.85(2)(g) (g) A grain warehouse keeper fails to maintain adequate grain inventory as required under s. 126.34 (3), and at least one of the following applies:

126.85(2)(g)1. 1. The amount of the deficiency exceeds 10,000 bushels or 10 percent of the grain warehouse keeper’s obligations to depositors, whichever amount is less.