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
.
AB698,15 7Section 15. 126.16 (3) (am) of the statutes is created to read:
AB698,7,158 126.16 (3) (am) A grain dealer who is required to file or maintain security under
9sub. (1) (b) shall at all times maintain security that is at least equal to the grain
10dealer's highest total, at any time during the preceding 12 months, of unpaid
11obligations for producer grain procured in this state under deferred payment
12contracts, excluding any unpaid obligation under a deferred payment contract, for
13grain procured in this state, with a grain producer or producer agent that has, under
14s. 126.70 (1) (b), permanently waived eligibility to file a default claim against the
15grain dealer.
AB698,16 16Section 16. 126.16 (3) (b) of the statutes is amended to read:
AB698,7,1917 126.16 (3) (b) A grain dealer who is required to file or maintain security only
18under sub. (1) (c) 2. shall at all times maintain security at least equal to the grain
19dealer's estimated default exposure, as defined in sub. (1) (c) 1., less $20,000,000.
AB698,17 20Section 17. 126.16 (3) (c) of the statutes is created to read:
AB698,7,2421 126.16 (3) (c) If more than one of pars. (a) to (b) applies to a grain dealer, the
22grain dealer shall at all times maintain security at least equal to the greatest amount
23of security that the grain dealer is required to maintain under any one of pars. (a)
24to (b).
AB698,18 25Section 18. 126.26 (5) of the statutes is amended to read:
AB698,8,9
1126.26 (5) Fee credit. If Beginning on January 1, 2023, if the combined fund
2balance contributed by grain warehouse keepers and grain dealers, as defined in s.
3126.10 (9),
exceeds $300,000 $2,300,000 on May 31 of any license year, the
4department shall credit 12.5 percent of the excess amount against grain warehouse
5inspection fees charged under sub. (3) (b) to contributing grain warehouse keepers
6who file timely license renewal applications for the next license year. The
7department shall credit each contributing grain warehouse keeper on a prorated
8basis, in proportion to the total inspection fees that the warehouse keeper has paid
9under sub. (3) (b) for the 4 preceding license years.
AB698,19 10Section 19. 126.28 (4m) of the statutes is amended to read:
AB698,8,1711 126.28 (4m) Interim financial statement. The department may, at any time,
12require a grain warehouse keeper licensed under s. 126.26 (1) to file an interim
13financial statement with the department. The grain warehouse keeper shall
14provide, with the interim financial statement, the warehouse keeper's sworn and
15notarized statement that the financial statement is correct.
An interim financial
16statement need not be a reviewed financial statement or an audited financial
17statement.
AB698,20 18Section 20. 126.40 (6m) of the statutes is created to read:
AB698,8,2119 126.40 (6m) “Deferred payment contract” means a contract for the
20procurement of producer milk under which all of the following apply to a milk
21contractor's payment:
AB698,9,222 (a) For producer milk received during the first 15 days of the preceding month,
23the milk contractor's payment is due after the 4th day of the month, based on an
24estimated price that is at least 80 percent of the class III price published by the

1regional federal milk market administrator for the month preceding the month in
2which the milk is received, or 80 percent of the contract price, whichever is greater.
AB698,9,43 (b) For producer milk received during the preceding month, the balance of the
4milk contractor's payment is due after the 19th day of the month.
AB698,21 5Section 21. 126.40 (7e) (a) (intro.) of the statutes is created to read:
AB698,9,66 126.40 (7e) (a) (intro.) Seventy-five percent of the following:
AB698,22 7Section 22. 126.40 (7e) (b) of the statutes is created to read:
AB698,9,138 126.40 (7e) (b) The milk contractor's highest total, at any time during the 12
9preceding months, of unpaid obligations for producer milk procured in this state
10under a deferred payment contract, excluding any unpaid obligations under a
11deferred payment contract, for milk procured in this state, with a milk producer or
12producer agent that has, under s. 126.70 (1) (b), permanently waived eligibility to file
13a default claim against the milk contractor.
AB698,23 14Section 23. 126.41 (2) (f) of the statutes is repealed.
AB698,24 15Section 24. 126.41 (6) (intro.) of the statutes is amended to read:
AB698,9,1916 126.41 (6) Sworn and notarized Applicant statement. (intro.) As part of a
17license application under sub. (2), an applicant shall provide a sworn and notarized
18statement, signed by the applicant or an authorized officer of the applicant, that
19reports all of the following information:
AB698,25 20Section 25. 126.41 (6) (ag) of the statutes is created to read:
AB698,9,2221 126.41 (6) (ag) The amount of payments under par. (a) made under deferred
22payment contracts.
AB698,26 23Section 26. 126.41 (6) (ar) of the statutes is created to read:
AB698,10,3
1126.41 (6) (ar) Whether the applicant has had any obligations under deferred
2payment contracts, for milk procured in this state, at any time since the beginning
3of the applicant's last completed fiscal year.
AB698,27 4Section 27. 126.41 (6) (br) 4. of the statutes is created to read:
AB698,10,65 126.41 (6) (br) 4. The amount of payments under subd. 3. made under deferred
6payment contracts.
AB698,28 7Section 28. 126.41 (9) (intro.) of the statutes is renumbered 126.47 (5m)
8(intro.) and amended to read:
AB698,10,119 126.47 (5m) (intro.) A milk contractor who files and maintains is required to
10file or maintain
security under s. 126.47 this section shall provide a monthly report
11to the department containing either all of the following:
AB698,29 12Section 29. 126.41 (9) (a) of the statutes is renumbered 126.47 (5m) (b) 1.
AB698,30 13Section 30. 126.41 (9) (b) of the statutes is renumbered 126.47 (5m) (b) 2.
AB698,31 14Section 31. 126.44 (1) (a) of the statutes is renumbered 126.44 (1) (a) (intro.)
15and amended to read:
AB698,10,2016 126.44 (1) (a) (intro.) A milk contractor shall file an annual financial statement
17with the department, before the department first licenses the milk contractor under
18s. 126.41 (1), unless the milk contractor reports no more than 150,000
19hundredweight of milk under s. 126.41 (6) (bg).
if the milk contractor's license
20application shows any of the following:
AB698,32 21Section 32. 126.44 (1) (a) 1. of the statutes is created to read:
AB698,10,2322 126.44 (1) (a) 1. That the amount of producer milk reported under s. 126.41 (6)
23(bg) exceeds 150,000 hundredweight.
AB698,33 24Section 33. 126.44 (1) (a) 2. of the statutes is created to read:
AB698,11,3
1126.44 (1) (a) 2. Any deferred payment contract obligations under s. 126.41 (6)
2(ar) to a milk producer or producer agent that has not, under s. 126.70 (1) (b),
3permanently waived eligibility to file a default claim against the milk contractor.
AB698,34 4Section 34. 126.44 (1) (b) of the statutes is renumbered 126.44 (1) (b) (intro.)
5and amended to read:
AB698,11,96 126.44 (1) (b) (intro.) Except as provided in par. (c) or (d), a milk contractor
7licensed under s. 126.41 (1) shall file an annual financial statement with the
8department during each license year. The if the milk contractor's license application
9for that year shows any of the following:
AB698,11,14 10(cm) A milk contractor shall file the an annual financial statement under par.
11(b)
by the 15th day of the 4th month following the close of the milk contractor's fiscal
12year. The department may extend the filing deadline for up to 30 days if the milk
13contractor, or the accountant preparing the financial statement, files a written
14extension request at least 10 days before the filing deadline.
AB698,35 15Section 35. 126.44 (1) (b) 1. of the statutes is created to read:
AB698,11,1816 126.44 (1) (b) 1. That the amount of producer milk reported under s. 126.41 (6)
17(bg) exceeds 150,000 hundredweight and the milk contractor is not a contributing
18milk contractor who procures milk in this state solely as a producer agent.
AB698,36 19Section 36. 126.44 (1) (b) 2. of the statutes is created to read:
AB698,11,2220 126.44 (1) (b) 2. Any deferred payment contract obligations under s. 126.41 (6)
21(ar) to a milk producer or producer agent that has not, under s. 126.70 (1) (b),
22permanently waived eligibility to file a default claim against the milk contractor.
AB698,37 23Section 37. 126.44 (1) (c) of the statutes is repealed.
AB698,38 24Section 38. 126.44 (1) (d) of the statutes is amended to read:
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