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LRB-1572/2
KP:amn
2017 - 2018 LEGISLATURE
November 29, 2017 - Introduced by Representatives Ripp, Ballweg, E. Brooks, R.
Brooks
, Horlacher, Kulp, Krug, Nerison, Tauchen, Tittl, Tusler and
VanderMeer, cosponsored by Senators Marklein and Olsen. Referred to
Committee on Agriculture.
AB698,2,6 1An Act to repeal 126.01 (20) (a), 126.11 (3) (f), 126.41 (2) (f), 126.44 (1) (c), 126.46
2(5m) (a) 1., 126.46 (5m) (a) 2., 126.47 (3) (a) 1., 126.47 (3) (a) 2., 126.56 (3) (f) and
3126.88 (1) (c); to renumber 126.41 (9) (a), 126.41 (9) (b) and 126.47 (1) (b) 2.;
4to renumber and amend 126.41 (9) (intro.), 126.44 (1) (a), 126.44 (1) (b),
5126.46 (5m) (a) (intro.), 126.47 (1) (b) 1. (intro.), 126.47 (1) (b) 1. a., 126.47 (1)
6(b) 1. b., 126.47 (3) (a) (intro.) and 126.48 (3); to consolidate, renumber and
7amend
126.01 (20) (intro.) and (b); to amend 126.11 (6), 126.11 (9) (intro.),
8126.13 (1) (a) 2., 126.13 (1) (b) 2., 126.13 (1) (d), 126.13 (4m), 126.16 (1) (b),
9126.16 (1) (c) 1. b., 126.16 (3) (a) (intro.), 126.16 (3) (a) 2., 126.16 (3) (b), 126.26
10(5), 126.28 (4m), 126.41 (6) (intro.), 126.44 (1) (d), 126.44 (3), 126.44 (6m),
11126.46 (1), 126.47 (3) (b), 126.47 (7) (a) (intro.), 126.47 (7) (am), 126.48 (1),
12126.48 (2), 126.56 (9) (intro.), 126.58 (4m) and 126.88 (1) (b); and to create
13126.13 (1) (e), 126.16 (3) (am), 126.16 (3) (c), 126.40 (6m), 126.40 (7e) (a) (intro.),
14126.40 (7e) (b), 126.41 (6) (ag), 126.41 (6) (ar), 126.41 (6) (br) 4., 126.44 (1) (a)

11., 126.44 (1) (a) 2., 126.44 (1) (b) 1., 126.44 (1) (b) 2., 126.44 (1) (e), 126.47 (1)
2(ae), 126.47 (3) (ae), 126.47 (3) (c), 126.47 (5m) (title), 126.47 (5m) (a), 126.47
3(5m) (b) (intro.), 126.47 (7) (ae), 126.485, 126.56 (2) (c), 126.70 (4) (gm), 126.70
4(4) (L) and 126.73 (4) of the statutes; relating to: various changes to the
5Agricultural Producer Security Program, providing an exemption from
6emergency rule procedures, and granting rule-making authority.
Analysis by the Legislative Reference Bureau
This bill makes changes to the Agricultural Producer Security Program, which
is administered by the Department of Agriculture, Trade and Consumer Protection.
The program is designed to minimize the risk that certain persons who buy
vegetables from producers for processing, who buy milk or grain, or who store grain
in a warehouse (contractors) will default on their financial obligations to vegetable,
dairy, or grain producers. Under the program, contractors are required to be licensed
by DATCP, and most contractors must pay into the agricultural producer security
fund. If a contractor defaults, the fund reimburses a producer for a portion of the
losses that the producer incurs as a result of the default.
Small vegetable processor exemption
Except for restaurants, other retail food establishments, and certain federally
licensed persons, current law requires a person who procures vegetables grown for
use in food processing from a vegetable producer, or the producer's agent, to satisfy
certain requirements including payment of fees and assessments, holding a license
granted by DATCP, and filing annual financial statements. The bill exempts a
person who procures vegetables that are grown for use in food processing from a
vegetable producer, or the producer's agent, from those requirements if the person
spends less than $15,000 per year on procuring vegetables.
Milk deferred payment contracts
The bill allows a person who buys milk from a milk producer to enter into a
contract to pay the producer for that milk up to approximately five months after the
person receives the milk. Under the bill, a deferred payment contract for milk must
be in writing, contain certain notices, and meet certain other requirements. Current
law requires that a person who buys milk from a milk producer make certain portions
of the payment for that milk by the 4th and the 19th days of the next month. The
bill also requires DATCP to promulgate rules that establish an additional license
assessment that a milk producer must pay for entering into a deferred payment
contract, and requires a person who buys milk under a deferred payment contract
to file and maintain security with DATCP, in certain situations, until it is eligible to
be released.

Grain dealer and grain warehouse keeper fund balances
The bill also combines the agricultural producer security fund balance
attributable to grain dealers and the fund balance attributable to grain warehouse
keepers into a single fund balance attributable to both. Current law establishes a
threshold for each fund balance attributable to a particular type of contractor, at
which DATCP is required to reduce certain fees paid by contractors who have
contributed to the fund by a portion of the amount that the fund balance exceeds the
threshold. The bill adds together the threshold for the fund balance attributable to
grain dealers and the threshold for the fund balance attributable to grain warehouse
keepers to create a single threshold for certain fee reductions for both grain dealers
and grain warehouse keepers. Under the bill, however, if the fund balance
attributable to both grain dealers and grain warehouse keepers exceeds the
threshold established by the bill, grain warehouse keepers are not eligible to receive
a reduction in their inspection fee until January 1, 2023.
Grain dealer deferred payment purchases
The bill also exempts the purchases that a grain dealer makes under a deferred
payment contract from being counted in the requirements that are used to determine
whether a grain dealer must file annual statements or file and maintain security
with DATCP, if the producer who sells the grain under the deferred payment contract
permanently waives its ability to receive a payment from the agricultural producer
security fund after a default by that grain dealer. Under current law, such purchases
are included in determining whether a grain dealer must file annual financial
statements or file and maintain security, in certain situations, with DATCP.
Payments to producers due to a default
The bill also requires DATCP to disallow a claim by a producer for compensation
from an agricultural producer security fund for a default if the producer does not file
a claim against the defaulting party in each federal bankruptcy proceeding or state
insolvency proceeding, initiated by another party, in which the producer is eligible
to file a claim. The bill also grants DATCP subrogation rights to recover from a
defaulting party, or any other party that is liable to a producer, the amount of any
payment made by an agricultural producer security fund to a producer as a result
of a default.
Other provisions
The bill also modifies the amount of security that a grain dealer or milk
contractor is required to maintain in certain other situations besides when
purchases are made under a deferred payment contract. Also, the bill eliminates the
current law requirement that a sworn and notarized statement accompany a license
application and certain financial reports that must be filed with DATCP.

For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB698,1 1Section 1. 126.01 (20) (intro.) and (b) of the statutes are consolidated,
2renumbered 126.01 (20) and amended to read:
AB698,4,63 126.01 (20) “Reviewed financial statement" means a contractor's financial
4statement, other than an audited financial statement, if all of the following apply:
5(b) The financial statement
that is reviewed by an independent certified public
6accountant licensed or certified under ch. 442.
AB698,2 7Section 2. 126.01 (20) (a) of the statutes is repealed.
AB698,3 8Section 3. 126.11 (3) (f) of the statutes is repealed.
AB698,4 9Section 4. 126.11 (6) of the statutes is amended to read:
AB698,4,1710 126.11 (6) Fee credits. If the combined balance in the fund contributed by
11grain dealers and grain warehouse keepers, as defined in s. 126.25 (9), exceeds
12$2,000,000 $2,300,000 on May 31 of any license year, the department shall credit 50
13percent of the excess amount against license fees charged under sub. (4) (b) to
14contributing grain dealers who file timely license renewal applications for the next
15license year. The department shall credit each contributing grain dealer on a
16prorated basis, in proportion to the total fees that the grain dealer paid under sub.
17(4) (b) for the 4 preceding license years as a contributing grain dealer.
AB698,5 18Section 5. 126.11 (9) (intro.) of the statutes is amended to read:
AB698,5,219 126.11 (9) Sworn and notarized Applicant statement. (intro.) As part of a
20license application under sub. (3), an applicant shall provide a sworn and notarized

1statement, signed by the applicant or an officer of the applicant, that reports all of
2the following:
AB698,6 3Section 6. 126.13 (1) (a) 2. of the statutes is amended to read:
AB698,5,64 126.13 (1) (a) 2. Any deferred payment contract obligations under s. 126.11 (9)
5(c) to a grain producer or producer agent that has not, under s. 126.70 (1) (b),
6permanently waived eligibility to file a default claim against the grain dealer
.
AB698,7 7Section 7. 126.13 (1) (b) 2. of the statutes is amended to read:
AB698,5,108 126.13 (1) (b) 2. Any deferred payment contract obligations under s. 126.11 (9)
9(c) to a grain producer or producer agent that has not, under s. 126.70 (1) (b),
10permanently waived eligibility to file a default claim against the grain dealer
.
AB698,8 11Section 8. 126.13 (1) (d) of the statutes is amended to read:
AB698,5,1512 126.13 (1) (d) A Except as provided under par. (e), a grain dealer licensed under
13s. 126.11 may not incur any obligations under deferred payment contracts for grain
14procured in this state unless the contractor first notifies the department and files an
15annual financial statement with the department.
AB698,9 16Section 9. 126.13 (1) (e) of the statutes is created to read:
AB698,5,2117 126.13 (1) (e) A grain dealer licensed under s. 126.11 is not required to notify
18the department or file an annual financial statement with the department under par.
19(d) for an obligation incurred under a deferred payment contract, for grain procured
20in this state, with a grain producer or producer agent that has, under s. 126.70 (1)
21(b), permanently waived eligibility to file a default claim against the grain dealer.
AB698,10 22Section 10. 126.13 (4m) of the statutes is amended to read:
AB698,6,323 126.13 (4m) Interim financial statement. The department may, at any time,
24require a grain dealer licensed under s. 126.11 to file an interim financial statement
25with the department. The grain dealer shall provide, with the interim financial

1statement, the grain dealer's sworn and notarized statement that the financial
2statement is correct.
An interim financial statement need not be a reviewed financial
3statement or an audited financial statement.
AB698,11 4Section 11. 126.16 (1) (b) of the statutes is amended to read:
AB698,6,125 126.16 (1) (b) A grain dealer who reports any deferred payment contract
6obligations under s. 126.11 (9) (c) or 126.13 (1) (d), other than deferred payment
7contract obligations to a grain producer or producer agent who permanently waived
8eligibility to file a default claim under s. 126.70 (1) (b) and (c), shall file security with
9the department, and maintain that security until the department releases it under
10sub. (8) (b), unless the grain dealer has positive equity and the grain dealer's annual
11financial statement under s. 126.13 (1) shows that the grain dealer has positive
12equity and
a debt to equity ratio of not more than 4.0 to 1.0.
AB698,12 13Section 12. 126.16 (1) (c) 1. b. of the statutes is amended to read:
AB698,6,1914 126.16 (1) (c) 1. b. The grain dealer's highest total, at any time during the
15preceding 12 months, of unpaid obligations for producer grain procured in this state
16under deferred payment contracts, excluding any unpaid obligations under a
17deferred payment contract, for grain procured in this state, with a grain producer or
18producer agent that has, under s. 126.70 (1) (b), permanently waived eligibility to file
19a default claim against the grain dealer
.
AB698,13 20Section 13. 126.16 (3) (a) (intro.) of the statutes is amended to read:
AB698,6,2321 126.16 (3) (a) (intro.) Except as provided in par. (b), a A grain dealer who is
22required to file or maintain security under this section sub. (1) (a) shall at all times
23maintain security that is at least equal to the sum of the following:
AB698,14 24Section 14. 126.16 (3) (a) 2. of the statutes is amended to read:
AB698,7,6
1126.16 (3) (a) 2. The grain dealer's highest total, at any time during the
2preceding 12 months, of unpaid obligations for producer grain procured in this state
3under deferred payment contracts, excluding any unpaid obligation under a deferred
4payment contract, for grain procured in this state, with a grain producer or producer
5agent that has, under s. 126.70 (1) (b), permanently waived eligibility to file a default
6claim against the grain dealer
.
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