126.51 Rules for qualified producer agents. The department shall promulgate rules specifying requirements for qualified producer agents, including a requirement that a qualified producer agent have a written contract with each milk producer from whom the qualified producer agent procures milk in this state and that the contract disclose all of the following: (1) That the producer agent does not take title to the milk producer’s milk. (2) That the producer agent holds all milk receipts in trust for milk producers. (3) That the producer agent’s obligations to milk producers are not secured or indemnified under this chapter to the same degree as are the obligations of other milk contractors. History: 2001 a. 16.
SUBCHAPTER VI VEGETABLE CONTRACTORS Cross-reference: See also ch. ATCP 101, Wis. adm. code.
126.55 Definitions. In this subchapter: (1) “Cash on delivery” means cash payment of the full agreed price for processing vegetables at the time of delivery or, if the vegetables are graded, within 72 hours after the time of delivery. (2) “Cash payment” means payment in any of the following forms: (a) Currency. (b) A cashier’s check, or a check that a bank issues and certifies. (c) A wire transfer. (d) Simultaneous barter. (3) “Contract obligation” means the net amount, whether paid or unpaid, that a vegetable contractor owes a vegetable producer or producer agent under a vegetable procurement contract. “Contract obligation” includes a net amount owed for unharvested acreage. (4) “Contributing vegetable contractor” means a vegetable
Updated 23-24 Wis. Stats.
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contractor who is licensed under s. 126.56 (1), who either has paid one or more quarterly installments under s. 126.60 (6) or is required to contribute to the fund, but the first quarterly installment under s. 126.60 (6) is not yet due, who has not elected not to participate in the fund under s. 126.595 (1), and who is not disqualified under s. 126.59 (2). (6) “Current ratio” means the ratio of the value of current assets to the value of current liabilities, calculated according to s. 126.58 (6) (c) 1. (7) “Debt to equity ratio” means the ratio of the value of liabilities to equity, calculated according to s. 126.58 (6) (c) 2. (8) “Deferred payment contract” means a vegetable procurement contract in which the vegetable producer or a producer agent agrees to accept payment after January 31 for processing vegetables harvested during the previous calendar year. (9) “Disqualified vegetable contractor” means a vegetable contractor who is disqualified from the fund under s. 126.59 (2). (10) “Food processing” has the meaning given in s. 97.29 (1) (g). (10m) “License year” means the period beginning on February 1 and ending on the following January 31. (10r) “Processing potato buyer” means a vegetable contractor who purchases processing potatoes and no other processing vegetables. (10t) “Processing potatoes” means potatoes grown or sold for use in food processing, regardless of whether those potatoes are actually harvested or processed as food. (11) “Processing vegetables” means vegetables grown or sold for use in food processing, regardless of whether those vegetables are actually harvested or processed as food. “Processing vegetables” includes sweet corn grown or sold for use in food processing, but does not include grain. (12) “Producer agent” means a person who, without taking title to vegetables, acts on behalf of a vegetable producer to market or accept payment for processing vegetables that the vegetable producer grows in this state. “Producer agent” does not include any of the following: (a) A person who merely brokers a contract between a vegetable producer and a vegetable contractor, without becoming a party to the contract or accepting payment on behalf of the vegetable producer. (b) A person who merely holds or transports processing vegetables for a vegetable producer, without marketing the vegetables or accepting payment on behalf of the vegetable producer. (13) “Time of delivery” under a vegetable procurement contract means the time at which one of the following occurs: (a) The vegetable contractor harvests the vegetables. (b) The vegetable producer delivers harvested vegetables to the custody or control of the vegetable contractor. (c) The vegetable contractor notifies the vegetable producer of the vegetable contractor’s refusal to harvest or accept delivery of vegetables. (14) “Vegetable contractor” means a person who does any of the following: (a) Contracts with a vegetable producer or a producer agent to procure processing vegetables that a vegetable producer grows in this state. (b) Contracts with a vegetable producer to market, as a producer agent, processing vegetables that the vegetable producer grows in this state. (15) “Vegetable procurement contract” means an oral or written agreement under which a vegetable contractor does any of the following:
May 22, 2026, are designated by NOTES. (Published 5-22-26)
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(a) Contracts with a vegetable producer or a producer agent to procure processing vegetables that a vegetable producer grows in this state. (b) Contracts with a vegetable producer to market, as a producer agent, processing vegetables that the vegetable producer grows in this state. (16) “Vegetable producer” means a person who grows processing vegetables in this state. (17) “Unharvested acreage” means land on which vegetables are grown, under a vegetable procurement contract, that a vegetable contractor leaves unharvested for any reason. “Unharvested acreage” includes all of the following: (a) Land on which the vegetables are suitable for processing, but are not harvested. (b) Land on which the vegetables are abandoned as being unsuitable for processing. History: 2001 a. 16; 2005 a. 80.
126.56
Vegetable contractors; licensing. (1) LICENSE REQUIRED. (a) Except as provided in sub. (2), no person may operate as a vegetable contractor without a current annual license from the department. (b) A license under par. (a) expires on the January 31 following its issuance. No person may transfer or assign a license issued under par. (a). (2) EXEMPT CONTRACTORS. The following vegetable contractors are exempt from licensing under sub. (1): (a) A vegetable contractor who procures vegetables primarily for unprocessed, fresh market use and is licensed under the federal Perishable Agricultural Commodities Act, 7 USC 499a to 499t. (b) A restaurant or other retail food establishment that procures processing vegetables solely for retail sale at the restaurant or other retail food establishment. (c) A vegetable contractor who spends less than $15,000 per license year to procure processing vegetables from vegetable producers and producer agents. (3) LICENSE APPLICATION. A vegetable contractor shall apply for a license under sub. (1) in writing, on a form provided by the department. The applicant shall provide all of the following: (a) The applicant’s legal name and any trade name under which the applicant proposes to operate as a vegetable contractor. (b) A statement of whether the applicant is an individual, a corporation, a partnership, a cooperative, an unincorporated cooperative association, a limited liability company, a trust, or other legal entity. If the applicant is a corporation, a cooperative, or an association, the application shall identify each officer of the corporation or cooperative. If the applicant is a partnership, the application shall identify each partner. (c) The mailing address of the applicant’s principal business location and the name of a responsible individual who may be contacted at that address. (d) The street address of each business location from which the applicant operates as a vegetable contractor in this state and the name of a responsible individual who may be contacted at each location that is staffed. (e) All license fees and surcharges required under sub. (4). (g) A financial statement if required under s. 126.58 (1) and not yet filed. (h) Other relevant information required by the department. (4) LICENSE FEES AND SURCHARGES. A vegetable contractor applying for a license under sub. (1) shall pay the following fees and surcharges in amounts that the department specifies by rule: (a) A nonrefundable basic license fee.
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(b) A fee based on the amount of contract obligations reported under sub. (9) (a), less any credit provided under sub. (6), except that this paragraph does not apply to a vegetable contractor to whom par. (f) applies. (c) A license surcharge if the department determines that, within 365 days before submitting the license application, the applicant operated as a vegetable contractor without a license in violation of sub. (1). The applicant shall also pay any license fees, license surcharges, and fund assessments that are still due for the license year in which the applicant violated sub. (1). (d) A license surcharge if during the preceding 12 months the applicant failed to file an annual financial statement required under s. 126.58 (1) (b) by the applicable deadline. (e) A license surcharge if a renewal applicant fails to renew a license by the license expiration date of January 31. (f) A fee if the vegetable contractor is a processing potato buyer who has elected not to participate in the fund in accordance with s. 126.595 (1). (4m) EFFECT OF PAYMENT OF SURCHARGE. Payment of a license surcharge under sub. (4) (c) does not relieve the applicant of any other civil or criminal liability that results from the violation of sub. (1), but does not constitute evidence of any law violation. (5) LICENSE FOR PART OF YEAR; FEES. A person who applies for an annual vegetable contractor license after the beginning of a license year shall pay the full annual fee amounts required under sub. (4). (6) FEE CREDITS. (a) If the balance in the fund contributed by vegetable contractors exceeds $825,000 on November 30 of any license year, the department shall credit 50 percent of the excess amount against fees charged under sub. (4) (b) to contributing vegetable contractors who file timely license renewal applications for the next license year. The department shall credit each contributing vegetable contractor on a prorated basis, in proportion to the total fees that the vegetable contractor has paid under sub. (4) (b) for the 4 preceding license years. (b) The fee under sub. (4) (b) is reduced by one cent for each $100 in contract obligations reported under sub. (9) (a) if the department, under a contract with the applicant, grades all of the graded vegetables that the applicant procures from vegetable producers or producer agents. (7) FEE STATEMENT. The department shall provide, with each license application form, a written statement of all license fees and surcharges required under sub. (4). The department shall specify any fee credits for which the applicant may qualify under sub. (6). (8) NO LICENSE WITHOUT FULL PAYMENT. The department may not issue a license under sub. (1) until the applicant pays all license fees and surcharges identified in the department’s statement under sub. (7). The department shall refund a fee or surcharge paid under protest if upon review the department determines that the fee or surcharge is not applicable. (9) APPLICANT STATEMENT. As part of a license application under sub. (3), an applicant shall provide a statement, signed by the applicant or an officer of the applicant, that reports all of the following: (a) The total amount of contract obligations that the applicant incurred during the applicant’s last completed fiscal year. If the applicant has not yet operated as a vegetable contractor, the applicant shall estimate the amount of contract obligations that the applicant will incur during the applicant’s first complete fiscal year. (am) The amount of contract obligations under par. (a) less any amount under par. (i) 2. (b) The largest amount of unpaid contract obligations that the
May 22, 2026, are designated by NOTES. (Published 5-22-26)
126.56
AGRICULTURAL PRODUCER SECURITY
vegetable contractor had at any time during the vegetable contractor’s last completed fiscal year. (c) The amount of unpaid contract obligations that the vegetable contractor has at the time of application. (d) The amount of unpaid contract obligations under par. (c) that are due for payment before the license year for which the applicant is applying. (e) The amount of unpaid obligations under par. (c) that the contractor has under deferred payment contracts. (f) Whether the applicant and the applicant’s affiliates and subsidiaries will collectively grow more than 10 percent of the total acreage of any vegetable species grown or procured by the applicant during the license year for which the applicant is applying. (g) Whether the applicant will pay cash on delivery under all vegetable procurement contracts during the license year for which the applicant is applying. (h) Whether the applicant is a producer-owned cooperative or unincorporated cooperative association or organization that procures vegetables solely from its producer owners on the basis of a cooperative marketing method under which the producer-owned cooperative, unincorporated cooperative association, or organization pays its producer owners a prorated share of sales proceeds for the marketing year after a final accounting and the deduction of marketing expenses. (i) All of the following information related to each vegetable producer or producer agent that under s. 126.70 (1) (b) has permanently waived eligibility to file a default claim against the applicant: 1. A copy of the written waiver that the vegetable producer or producer agent filed under s. 126.70 (1) (c). 2. The total amount of contract obligations that the applicant incurred during the applicant’s last completed fiscal year under vegetable procurement contracts with that vegetable producer or producer agent. If the applicant has not yet operated as a vegetable contractor, the applicant shall estimate the total amount of contract obligations that the applicant will incur during the applicant’s first complete fiscal year under vegetable procurement contracts with that vegetable producer or producer agent. (10) ACTION GRANTING OR DENYING APPLICATION. (a) The department shall grant or deny a license application under sub. (3) within 30 days after the department receives a complete application. If the department denies a license application, the department shall give the applicant a written notice stating the reasons for the denial. (b) A license becomes invalid after February 5 of the license year for which it is issued unless the license holder has by February 5 paid all producer obligations that were due and payable during the preceding license year. (11) LICENSE DISPLAYED. A vegetable contractor licensed under sub. (1) shall prominently display a copy of that license at each business location from which the vegetable contractor operates in this state. (12) MONTHLY REPORTS. A vegetable contractor who files security under s. 126.61 shall provide a monthly report to the department showing the highest amount of the vegetable contractor’s unpaid contract obligations at any time during the preceding month and the total amount of unpaid contract obligations under deferred payment contracts. History: 2001 a. 16; 2005 a. 80, 441; 2009 a. 296; 2015 a. 55; 2017 a. 155.
126.57
Vegetable contractors; insurance. (1) FIRE (a) Except as provided in par. (b), a vegetable contractor who is required to be licensed under s. 126.56 (1) shall maintain fire and extended coverage insurance, issued by an insurance company authorized to do busiAND EXTENDED COVERAGE INSURANCE.
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ness in this state, that covers all vegetables in the custody of the vegetable contractor, whether owned by the vegetable contractor or held for others, at the full local market value of the vegetables. (b) Paragraph (a) does not apply to a vegetable contractor if any of the following applies: 1. The vegetable contractor pays cash on delivery under all vegetable procurement contracts. 2. The vegetable contractor is a producer-owned cooperative or unincorporated cooperative association or organization that procures processing vegetables only from its producer owners. 3. The vegetable contractor is a processing potato buyer who has elected not to participate in the fund in accordance with s. 126.595 (1). (2) INSURANCE CANCELLATION; REPLACEMENT. Whenever an insurance policy under sub. (1) is canceled, the vegetable contractor shall replace the policy so that there is no lapse in coverage. (3) INSURANCE COVERAGE; MISREPRESENTATION. No vegetable contractor may misrepresent any of the following to the department or to any vegetable producer or producer agent: (a) That the vegetable contractor is insured. (b) The nature, coverage, or material terms of the vegetable contractor’s insurance policy. History: 2001 a. 16; 2005 a. 80, 441.
126.58 Vegetable contractors; financial statements. (1) REQUIRED ANNUAL FINANCIAL STATEMENT. (a) Except as provided in par. (c), a vegetable contractor shall file an annual financial statement with the department, before the department first licenses the vegetable contractor under s. 126.56 (1), if the vegetable contractor reports more than $500,000 in contract obligations under s. 126.56 (9) (am). (b) Except as provided in par. (c), a vegetable contractor licensed under s. 126.56 (1) shall file an annual financial statement with the department during each license year if the vegetable contractor’s license application for that year reports more than $500,000 in contract obligations under s. 126.56 (9) (am). The vegetable contractor shall file the annual financial statement by the 15th day of the 4th month following the close of the vegetable contractor’s fiscal year, except that the department may extend the filing deadline for up to 30 days if the vegetable contractor, or the accountant reviewing or auditing the financial statement, files a written extension request at least 10 days before the filing deadline. (c) A vegetable contractor is not required to file a financial statement under par. (a) or (b) if any of the following applies: 1. The vegetable contractor pays cash on delivery under all vegetable procurement contracts. 2. The vegetable contractor is a producer-owned cooperative or unincorporated cooperative association that procures processing vegetables only from its producer owners. 3. The vegetable contractor is a processing potato buyer who has elected not to participate in the fund in accordance with s. 126.595 (1). (2) VOLUNTARY FINANCIAL STATEMENT. A contributing vegetable contractor who is not required to file a financial statement under sub. (1) may file an annual financial statement with the department for any of the following reasons: (a) To qualify for a lower fund assessment under s. 126.60. (b) To avoid filing security under s. 126.61 (1) (b). (3) REVIEWED OR AUDITED FINANCIAL STATEMENT. A vegetable contractor filing a financial statement under sub. (1) or (2) may file either a reviewed financial statement or an audited financial statement, except that if the amount that the vegetable con-
May 22, 2026, are designated by NOTES. (Published 5-22-26)
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tractor last reported under s. 126.56 (9) (am) is more than $7,500,000, the vegetable contractor shall file an audited financial statement. (4) ACCOUNTING PERIOD. A vegetable contractor filing an annual financial statement under sub. (1) or (2) shall file a financial statement that covers the vegetable contractor’s last completed fiscal year unless the vegetable contractor has been in business for less than one year. (4m) INTERIM FINANCIAL STATEMENT. The department may, at any time, require a vegetable contractor licensed under s. 126.56 (1) to file an interim financial statement with the department. An interim financial statement need not be a reviewed or audited financial statement. (5) GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. (a) Except as provided in par. (b), a vegetable contractor filing a financial statement under this section shall file a financial statement that is prepared according to generally accepted accounting principles. (b) If a vegetable contractor is a sole proprietor and the vegetable contractor’s financial statement is not audited, the vegetable contractor shall file a financial statement that is prepared on a historical cost basis. (6) FINANCIAL STATEMENT CONTENTS. (a) Except as provided in par. (b), a vegetable contractor filing a financial statement under this section shall file a financial statement that consists of a balance sheet, income statement, equity statement, statement of cash flows, notes to those statements, and any other information required by the department. If the vegetable contractor is a sole proprietor, the vegetable contractor shall file his or her business and personal financial statements. (b) If a vegetable contractor has been in business for less than one year, the vegetable contractor may file an annual financial statement under sub. (1) or (2) consisting of a balance sheet and notes. (c) A vegetable contractor filing a financial statement under this section shall include in the financial statement, or in an attachment to the financial statement, calculations of all of the following: 1. The vegetable contractor’s current ratio, excluding any assets required to be excluded under sub. (7). 2. The vegetable contractor’s debt to equity ratio, excluding any assets required to be excluded under sub. (7). (7) ASSETS EXCLUDED. A vegetable contractor may not include any of the following assets in the calculations under sub. (6) (c), unless the department specifically approves their inclusion: (a) A nontrade note or account receivable from an officer, director, employee, partner, or stockholder, or from a member of the family of any of those individuals, unless the note or account receivable is secured by a first priority security interest in real or personal property. (b) A note or account receivable from a parent organization, a subsidiary, or an affiliate other than an employee. (c) A note or account that has been receivable for more than one year, unless the vegetable contractor has established an equal offsetting reserve for uncollectible notes and accounts receivable. (9) ENTITY COVERED. A person filing a financial statement under this section may not file, in lieu of that person’s financial statement, the financial statement of the person’s parent organization, subsidiary, predecessor, or successor. (10) DEPARTMENT REVIEW. The department may analyze a financial statement filed under this section and may reject a financial statement that fails to comply with this section. History: 2001 a. 16; 2005 a. 80, 441; 2009 a. 296; 2017 a. 155.
AGRICULTURAL PRODUCER SECURITY
126.595
126.59 Contributing vegetable contractors; disqualification. (1) CONTRIBUTION REQUIRED. A vegetable contractor licensed under s. 126.56 (1) shall pay fund assessments under s. 126.60 unless one of the following applies: (a) The vegetable contractor is disqualified under sub. (2). (b) The vegetable contractor pays cash on delivery under all vegetable procurement contracts. (c) The vegetable contractor is a producer-owned cooperative or unincorporated cooperative association that procures processing vegetables only from its producer owners. (d) The vegetable contractor is a processing potato buyer who has elected not to participate in the fund in accordance with s. 126.595 (1). (1m) VOLUNTARY CONTRIBUTION. A vegetable contractor who is exempt under sub. (1) (b) or (c) may volunteer to pay fund assessments under s. 126.60. (2) DISQUALIFIED CONTRACTOR. (a) A vegetable contractor who is required to file security under s. 126.61 (1) (a) is disqualified from the fund until the department determines that one of the conditions in s. 126.61 (7) (a) 1. or 2. is satisfied. (b) A vegetable contractor is disqualified from the fund if the department denies, suspends, or revokes the vegetable contractor’s license. (c) A vegetable contractor is disqualified from the fund, and required to pay cash on delivery under vegetable procurement contracts, if the department issues an order under s. 126.85 disqualifying the vegetable contractor from the fund. (3) PAYMENTS BY DISQUALIFIED VEGETABLE CONTRACTOR. (a) The department may not return, to a disqualified vegetable contractor, any fund assessments that the vegetable contractor paid as a contributing vegetable contractor. (b) A disqualified vegetable contractor remains liable for any unpaid fund installment under s. 126.60 that became due while the vegetable contractor was a contributing vegetable contractor. A disqualified vegetable contractor is not liable for any fund installment that becomes due after the vegetable contractor is disqualified under sub. (2). (4) NOTICE TO PRODUCERS. A vegetable contractor who is disqualified under sub. (2) (b) or (c) shall immediately give written notice of the disqualification to all vegetable producers and producer agents to whom the vegetable contractor has unpaid obligations under vegetable procurement contracts. The department may by rule or order specify the required form and content of the notice. History: 2001 a. 16; 2003 a. 38; 2005 a. 80, 441; 2009 a. 296.
126.595 Processing potato buyer optional nonparticipation. (1) ELIGIBILITY. A processing potato buyer may elect not to participate in the fund by doing all of the following: (a) Submitting a notification of nonparticipation to the department by January 31 of each year or, for a new processing potato buyer, at the time of application for its first license. (b) Certifying in a statement to the department that the processing potato buyer will not, in the next licensing year, enter into any of the following: 1. An unwritten contract with a vegetable producer in this state under which the processing potato buyer takes custody or control of processing potatoes more than 10 days before paying for the processing potatoes in full. 2. A written contract with a vegetable producer in this state under which the processing potato buyer takes custody or control of processing potatoes more than 30 days before paying for the processing potatoes in full. (c) Certifying in a statement to the department that the pro-
May 22, 2026, are designated by NOTES. (Published 5-22-26)
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Updated 23-24 Wis. Stats.
AGRICULTURAL PRODUCER SECURITY
cessing potato buyer does not at the time of certification have any unpaid obligations to vegetable producers under any of the following: 1. An unwritten contract with a vegetable producer in this state under which the processing potato buyer takes custody or control of processing potatoes more than 10 days before paying for the processing potatoes in full. 2. A written contract with a vegetable producer in this state under which the processing potato buyer takes custody or control of processing potatoes more than 30 days before paying for the processing potatoes in full. (d) Providing evidence to the department that the processing potato buyer has a license under the federal Perishable Agricultural Commodities Act, 7 USC 499a to 499t, that is in good standing. (e) Certifying that it will disclose to all vegetable producers with whom the processing potato buyer contracts that the processing potato buyer does not participate in the fund by providing the following statement, in at least 10-point bold type, in each written contract for processed potatoes or, for unwritten contracts, in a written statement signed by the vegetable processor and the vegetable producer: “The undersigned processing potato buyer, as defined in s. 126.55 (10r), Wisconsin Statutes, does not participate in the Wisconsin agricultural producer security fund, established under s. 25.463, Wisconsin Statutes. As a result the producer does not have the security or other protections against nonpayment provided by that fund. The parties to this contract acknowledge that the Wisconsin Department of Agriculture, Trade and Consumer Protection and the State of Wisconsin cannot be held liable for any default under the contract between the parties.” (f) Maintaining documentation that every purchase of potatoes grown in this state for processing under contract with the processing potato buyer qualifies for trust protection under the federal Perishable Agricultural Commodities Act, 7 USC 499a to 499t, and that the vegetable producers’ trust rights have been validly preserved. (2) RESUMING PARTICIPATION. (a) 1. A processing potato buyer that has elected not to participate in the fund may rescind its election and participate in the fund by notifying the department of its intention to participate and complying with par. (b). Participation is effective the 30th day after the day on which the department receives the notice or on the effective date of the security described in par. (b) 1., whichever is later. 2. A processing potato buyer that has elected not to participate in the fund shall participate in the fund if the processing potato buyer ceases to meet the requirements in sub. (1). Participation is effective on the day on which the department notifies the processing potato buyer that the potato buyer in no longer eligible under sub. (1) or on the effective date of the security described in par. (b) 1., whichever is later. (b) 1. A processing potato buyer that decides or is required to participate in the fund under par. (a) shall file security with the department in a form that satisfies the requirements in s. 126.61 (4) and that is in an amount equal to at least 75 percent of the amount last reported under s. 126.56 (9) (b). The processing potato buyer shall maintain the security until the department releases it. The department may not release the security until the processing potato buyer has participated in the fund for 2 continuous complete license years. 2. A processing potato buyer that decides or is required to participate in the fund under par. (a) shall begin contributing to the fund at the beginning of its 2nd complete license year of par-
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ticipation, except that this requirement does not apply to a processing potato buyer that is disqualified under s. 126.59 (2). History: 2005 a. 80.
126.60 Contributing vegetable contractors; fund assessments. (1) GENERAL. A contributing vegetable contractor shall pay an annual fund assessment for each license year. Except as provided in sub. (5m), the assessment equals $20 or the sum of the following, whichever is greater, unless the department by rule specifies a different assessment: (a) The vegetable contractor’s current ratio assessment. The current ratio assessment for a license year equals the vegetable contractor’s current ratio assessment rate under sub. (2) multiplied by the amount reported under s. 126.56 (9) (am) in the vegetable contractor’s license application for that license year. (b) The vegetable contractor’s debt to equity ratio assessment. The debt to equity ratio assessment for a license year equals the vegetable contractor’s debt to equity ratio assessment rate under sub. (4) multiplied by the amount reported under s. 126.56 (9) (am) in the vegetable contractor’s license application for that license year. (2) CURRENT RATIO ASSESSMENT RATE. A vegetable contractor’s current ratio assessment rate is calculated, at the beginning of the license year, as follows: (a) If the vegetable contractor has filed an annual financial statement under s. 126.58 and that financial statement shows a current ratio of at least 1.25 to 1.0, the vegetable contractor’s current ratio assessment rate equals the greater of zero or the current ratio assessment factor in sub. (3) (a) multiplied by the following amount: 1. Subtract 4 from the current ratio. 2. Divide the amount determined under subd. 1. by 2. 3. Multiply the amount determined under subd. 2. by negative one. 4. Raise the amount determined under subd. 3. to the 3rd power. 5. Subtract 0.65 from the current ratio. 6. Divide 0.60 by the amount determined under subd. 5. 7. Raise the amount determined under subd. 6. to the 5th power. 8. Add the amount determined under subd. 4. to the amount determined under subd. 7. 9. Add 0.25 to the amount determined under subd. 8. (b) If the vegetable contractor has filed an annual financial statement under s. 126.58 and that financial statement shows a current ratio of less than 1.25 to 1.0, but greater than 1.1 to 1.0, the vegetable contractor’s current ratio assessment rate equals the current ratio assessment factor in sub. (3) (b) multiplied by the following amount: 1. Subtract 4 from the current ratio. 2. Divide the amount determined under subd. 1. by 2. 3. Multiply the amount determined under subd. 2. by negative one. 4. Raise the amount determined under subd. 3. to the 3rd power. 5. Subtract 0.65 from the current ratio. 6. Divide 0.60 by the amount determined under subd. 5. 7. Raise the amount determined under subd. 6. to the 5th power. 8. Add the amount determined under subd. 4. to the amount determined under subd. 7. 9. Add 0.25 to the amount determined under subd. 8. (c) If the vegetable contractor has filed an annual financial
May 22, 2026, are designated by NOTES. (Published 5-22-26)
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statement under s. 126.58 and that financial statement shows a current ratio of less than or equal to 1.1 to 1.0, the vegetable contractor’s current ratio assessment rate equals the current ratio assessment factor in sub. (3) (b) multiplied by 7.512617. (d) If the vegetable contractor has not filed an annual financial statement under s. 126.58, the vegetable contractor’s current ratio assessment rate equals the current ratio assessment factor in sub. (3) (b) multiplied by 3.84961. (3) CURRENT RATIO ASSESSMENT FACTOR. (a) A vegetable contractor’s current ratio assessment factor under sub. (2) (a) is 0.00048, except as follows: 1. For the vegetable contractor’s 4th and 5th consecutive full license years as a contributing vegetable contractor, the vegetable contractor’s current ratio assessment factor is 0.00029. 2. For the vegetable contractor’s 6th or higher consecutive full license year as a contributing vegetable contractor, the vegetable contractor’s current ratio assessment factor is zero. (b) A vegetable contractor’s current ratio assessment factor under sub. (2) (b) to (d) is 0.00072, except as follows: 1. For the vegetable contractor’s 4th and 5th consecutive full license years as a contributing vegetable contractor, the vegetable contractor’s current ratio assessment factor is 0.00058. 2. For the vegetable contractor’s 6th or higher consecutive full license year as a contributing vegetable contractor, the vegetable contractor’s current ratio assessment factor is 0.00035. (4) DEBT TO EQUITY RATIO ASSESSMENT RATE. A vegetable contractor’s debt to equity ratio assessment rate for a license year is calculated, at the beginning of the license year, as follows: (a) If the vegetable contractor has filed an annual financial statement under s. 126.58 and that financial statement shows positive equity and a debt to equity ratio of not more than 4.0 to 1.0, the vegetable contractor’s debt to equity ratio assessment rate equals the greater of zero or the debt to equity ratio assessment factor in sub. (5) (a) multiplied by the following amount: 1. Subtract 4 from the debt to equity ratio. 2. Divide the amount determined under subd. 1. by 4. 3. Raise the amount determined under subd. 2. to the 3rd power. 4. Subtract 1.85 from the debt to equity ratio. 5. Divide the amount determined under subd. 4. by 2.5. 6. Raise the amount determined under subd. 5. to the 7th power. 7. Add the amount determined under subd. 3. to the amount determined under subd. 6. 8. Add one to the amount determined under subd. 7. (b) If the vegetable contractor has filed an annual financial statement under s. 126.58 and that financial statement shows a debt to equity ratio of greater than 4.0 to 1.0 but less than 6.0 to 1.0, the vegetable contractor’s debt to equity ratio assessment rate equals the debt to equity ratio assessment factor in sub. (5) (b) multiplied by the following amount: 1. Subtract 4 from the debt to equity ratio. 2. Divide the amount determined under subd. 1. by 4. 3. Raise the amount determined under subd. 2. to the 3rd power. 4. Subtract 1.85 from the debt to equity ratio. 5. Divide the amount determined under subd. 4. by 2.5. 6. Raise the amount determined under subd. 5. to the 7th power. 7. Add the amount determined under subd. 3. to the amount determined under subd. 6. 8. Add one to the amount determined under subd. 7. (c) If the vegetable contractor has filed an annual financial
AGRICULTURAL PRODUCER SECURITY
126.60
statement under s. 126.58 and that financial statement shows negative equity or a debt to equity ratio of at least 6.0 to 1.0, the vegetable contractor’s debt to equity ratio assessment rate equals the debt to equity ratio assessment factor in sub. (5) (b) multiplied by 35.859145. (d) If the vegetable contractor has not filed an annual financial statement under s. 126.58, the vegetable contractor’s debt to equity ratio assessment rate equals the debt to equity ratio assessment factor in sub. (5) (b) multiplied by 1.34793. (5) DEBT TO EQUITY RATIO ASSESSMENT FACTOR. (a) A vegetable contractor’s debt to equity ratio assessment factor under sub. (4) (a) is 0.000135, except as follows: 1. For the vegetable contractor’s 4th and 5th consecutive full license years as a contributing vegetable contractor, the vegetable contractor’s debt to equity ratio assessment factor is 0.00008. 2. For the vegetable contractor’s 6th or higher consecutive full license year as a contributing vegetable contractor, the vegetable contractor’s debt to equity ratio assessment factor is zero. (b) A vegetable contractor’s debt to equity ratio assessment factor under sub. (4) (b) to (d) is 0.000203, except as follows: 1. For the vegetable contractor’s 4th and 5th consecutive full license years as a contributing vegetable contractor, the vegetable contractor’s debt to equity ratio assessment factor is 0.00016. 2. For the vegetable contractor’s 6th or higher consecutive full license year as a contributing vegetable contractor, the vegetable contractor’s debt to equity ratio assessment factor is 0.0001. (5m) REDUCED ASSESSMENT FOR CERTAIN VEGETABLE CONTRACTORS FILING SECURITY. If a vegetable contractor files security under s. 126.61 (1) (b), the vegetable contractor’s assessment is the amount determined under sub. (1) reduced by an amount determined as follows: (a) Divide the amount of security that the vegetable contractor is required to file as determined under s. 126.61 (3) (b) by the amount of the vegetable contractor’s estimated default exposure, as defined in s. 126.61 (1) (b) 1. (b) Multiply the amount of the assessment determined under sub. (1) by the amount determined under par. (a). (6) QUARTERLY INSTALLMENTS. (a) A contributing vegetable contractor shall pay the vegetable contractor’s annual fund assessment in equal quarterly installments that are due as follows: 1. The first installment is due on March 1 of the license year. 2. The 2nd installment is due on June 1 of the license year. 3. The 3rd installment is due on September 1 of the license year. 4. The 4th installment is due on December 1 of the license year. (b) A contributing vegetable contractor may prepay any of the quarterly installments under par. (a). (c) A contributing vegetable contractor 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 vegetable contractor 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 were due before that day. (d) A contributing vegetable contractor 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 percent of the overdue installment amount, whichever is greater. (7) NOTICE OF ANNUAL ASSESSMENT AND QUARTERLY INSTALLMENTS. When the department issues an annual license to a contributing vegetable contractor, the department shall notify the vegetable contractor of all of the following:
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(a) The amount of the vegetable contractor’s annual fund assessment under this section. (b) The amount of each required quarterly installment under sub. (6) and the date by which the vegetable contractor must pay each installment. (c) The penalty that applies under sub. (6) (d) if the vegetable contractor fails to pay any quarterly installment when due. History: 2001 a. 16; 2003 a. 38, 326; 2009 a. 296.
126.61
Vegetable contractors; security. (1) SECURITY (a) Except as provided in par. (c), a vegetable contractor shall file security with the department, and maintain that security until the department releases it under sub. (7), if all of the following apply when the department first licenses the vegetable contractor under s. 126.56 (1): 1. The vegetable contractor reports more than $500,000 in annual contract obligations under s. 126.56 (9) (am). 2. The vegetable contractor files a financial statement under s. 126.58 (1) and that financial statement shows negative equity. (b) 1. In this paragraph, “estimated default exposure” means 75 percent of the highest amount of unpaid contract obligations, reported by a vegetable contractor under s. 126.56 (9) (b) or (12) that the vegetable contractor had at any time during the last 12 months. 2. Except as provided in par. (c), a vegetable contractor shall file security with the department, and shall maintain that security until the department releases it under sub. (7) (bm), if at any time all of the following apply: a. The vegetable contractor’s latest annual financial statement under s. 126.58 (1) 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. b. The vegetable contractor’s estimated default exposure exceeds $20,000,000. (c) A vegetable contractor is not required to file security under this subsection if any of the following applies: 1. The vegetable contractor pays cash on delivery under all vegetable procurement contracts. 2. The vegetable contractor is a producer-owned cooperative or unincorporated cooperative association that procures processing vegetables only from its producer members. 3. The vegetable contractor is a processing potato buyer who has elected not to participate in the fund in accordance with s. 126.595 (1). (3) AMOUNT OF SECURITY. (a) Except as provided in par. (b), a vegetable contractor who is required to file or maintain security under this section shall, at all times, maintain security that is at least equal to 75 percent of the amount of unpaid contract obligations last reported under s. 126.56 (9) (b) or (12), except that this amount is not required of a contributing vegetable contractor. (b) A vegetable contractor who is required to file or maintain security only under sub. (1) (b) shall at all times maintain security equal to the vegetable contractor’s estimated default exposure, as defined in sub. (1) (b) 1., less $20,000,000. (4) FORM OF SECURITY. The department shall review, and determine whether to approve, security filed under this section. The department may approve only the following types of security: (a) Currency. (b) A commercial surety bond if all of the following apply: 1. The surety bond is made payable to the department for the benefit of vegetable producers and producer agents. 2. The surety bond is issued by a person authorized to operate a surety business in this state. REQUIRED.
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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. 4. The surety bond is issued in a form, and subject to any terms and conditions, that the department considers appropriate. (c) A certificate of deposit or money market certificate, if all of the following apply: 1. The certificate is issued or endorsed to the department for the benefit of vegetable producers and producer agents. 2. The certificate may not be canceled or redeemed without the department’s written permission. 3. No person may transfer or withdraw funds represented by the certificate without the department’s written permission. 4. The certificate renews automatically without any action by the department. 5. The certificate is issued in a form, and subject to any terms and conditions, that the department considers appropriate. (d) An irrevocable bank letter of credit if all of the following apply: 1. The letter of credit is payable to the department for the benefit of vegetable producers and producer agents. 2. The letter of credit is issued on bank letterhead. 3. The letter of credit is issued for an initial period of at least one year. 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. 5. The letter of credit is issued in a form, and subject to any terms and conditions, that the department considers appropriate. (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 vegetable producers and producer agents. (6) ADDITIONAL SECURITY. (a) The department may, at any time, demand additional security from a vegetable contractor if any of the following applies: 1. The vegetable contractor’s existing security falls below the amount required under sub. (3) for any reason, including a depreciation in the value of the security filed with the department, increased obligations to vegetable producers or producer agents, or the cancellation of any security filed with the department. 2. The vegetable contractor fails to provide required information that is relevant to a determination of security requirements. (b) The department shall issue a demand under par. (a) in writing. The department shall indicate why additional 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. (c) A vegetable contractor may request a hearing, under ch. 227, on a security demand under par. (b). A request for hearing does not automatically stay a security demand. (d) If a vegetable contractor fails to comply with the department’s security demand under this subsection, the vegetable contractor shall give written notice of that fact to all vegetable producers and producer agents from whom the vegetable contractor procures processing vegetables. If the vegetable contractor fails to give accurate notice under this paragraph within 5 days after the security filing deadline under par. (b) has passed, the department shall promptly notify vegetable producers and producer agents by publishing a class 3 notice under ch. 985. The depart-
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ment may also give individual notice to vegetable producers or producer agents of whom the department is aware. (e) If a vegetable contractor fails to comply with the department’s demand for security under this subsection, the department may do any of the following: 1. Issue a summary order under s. 126.85 (2) that prohibits the vegetable contractor from procuring processing vegetables from vegetable producers or producer agents, or requires the vegetable contractor to pay cash on delivery under all vegetable procurement contracts. 2. Suspend or revoke the vegetable contractor’s license. (7) RELEASING SECURITY. (a) The department may release security filed under sub. (1) (a), except for any amount of security that the vegetable contractor is required to file because sub. (1) (b) applies to the vegetable contractor, if any of the following applies: 1. The vegetable contractor reports less than $500,000 in annual contract obligations under s. 126.56 (9) (a) for at least 2 consecutive years and the vegetable contractor pays the quarterly fund assessment that would have been required of the vegetable contractor if the vegetable contractor had been a contributing vegetable contractor on the most recent quarterly installment date under s. 126.60 (6). 2. The vegetable contractor’s annual financial statement under s. 126.58 shows positive equity for at least 2 consecutive years and the vegetable contractor pays the quarterly fund assessment that would have been required of the vegetable contractor if the vegetable contractor had been a contributing vegetable contractor on the most recent quarterly installment date under s. 126.60 (6). (bm) The department may release security filed under sub. (1) (b), except for any amount of security that the vegetable contractor is required to file because sub. (1) (a) applies to the vegetable contractor, if the vegetable contractor files 2 consecutive annual financial statements under s. 126.58 showing that the vegetable contractor 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. (d) The department may release security to the extent that the security exceeds the amount required under sub. (3). (e) The department may release security if the vegetable contractor files alternative security, of equivalent value, that the department approves. (f) The department shall release security if the vegetable contractor has gone out of business and paid all contract obligations in full. History: 2001 a. 16; 2003 a. 38; 2005 a. 80, 441; 2009 a. 296; 2011 a. 260 s. 80.
126.62
Vegetable contractors; records. (1) RECORDS REQUIRED. A vegetable contractor shall keep all of the following: (a) Copies of all written vegetable procurement contracts. (b) A current record of all vegetable contract obligations, payments, and unpaid balances. (2) RECORDS RETENTION. A vegetable contractor shall keep all records required under sub. (1) for at least 6 years from the date of their creation. (3) RECORDS INSPECTION. A vegetable contractor shall make records required under this section available to the department for inspection and copying upon request. History: 2001 a. 16; 2003 a. 321; 2009 a. 296.
126.63 Vegetable contractors; business practices. (1) VEGETABLE GRADING AND TARE. (a) A vegetable contractor shall grade vegetables according to the following standards if the vegetable grade may affect the amount received by the vegetable producer:
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1. Standard grading procedures that the department establishes by rule. 2. Uniform grade standards that the department establishes by rule, unless the vegetable procurement contract clearly specifies alternative grade standards. (b) If a vegetable contractor makes any deduction for tare, the vegetable contractor shall determine tare according to procedures that the department establishes by rule. (c) The department shall establish grade standards for vegetables that conform to grade standards adopted by the federal department of agriculture under 7 USC 1621 to 1632. (2) PROHIBITED DEDUCTIONS. No vegetable purchaser may deduct, from the amount payable under a vegetable procurement contract, an amount designated for the payment of any vegetable contractor license fee, surcharge, or fund assessment under this subchapter. (3) TIMELY PAYMENT. A vegetable contractor shall pay a vegetable producer or producer agent according to the vegetable procurement contract. The vegetable contractor shall make the following payments by the following dates, unless the contract specifies a different payment date in writing: (a) The 15th day of the month immediately following the month in which the vegetable contractor harvests or accepts delivery of processing vegetables, the full amount owed under the contract for those vegetables. (b) The 15th day of the month immediately following the month in which the vegetable contractor rejects or fails to harvest processing vegetables tendered under the vegetable procurement contract, the full amount owed under the contract for those vegetables. (4) ANNUAL PAYMENT DEADLINE. (a) Except as provided in par. (b) or (c), a vegetable contractor shall pay all outstanding obligations to vegetable producers by January 31 of each license year. (b) For processing vegetables tendered or delivered in January of any license year, a vegetable contractor shall pay the full amount owed under the vegetable procurement contract by February 15 or by the 30th day after the date of delivery, whichever date is later. (c) A vegetable contractor may pay after January 31 for processing vegetables delivered on or before December 31, in accordance with a deferred payment contract, if all of the following apply: 1. The vegetable contractor complies with sub. (5). 2. The deferred payment contract specifies a date by which full payment must be paid. 3. The deferred payment contract clearly and conspicuously discloses that the vegetable producer or producer agent is disqualified from filing a default claim under s. 126.70 in the event that the vegetable contractor defaults on payment under the deferred payment contract. The department may by rule or order specify the form and content of the disclosure. (5) DEFERRED PAYMENT CONTRACT. (a) Before a vegetable contractor offers a deferred payment contract to any vegetable producer, the vegetable contractor shall put the deferred payment contract to a vote of vegetable producers, as provided in par. (b), obtain the approval of a majority of the voting vegetable producers, and comply with par. (c). (b) To put a deferred payment contract to a vote of vegetable producers, the vegetable contractor shall give written notice to all vegetable producers in this state from whom the vegetable contractor procured the same type of processing vegetables during the preceding license year. In the notice, the vegetable contractor shall include a copy of the proposed contract, shall announce a
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meeting at which the vegetable producers will be asked to vote on the proposed contract, and shall include a mail ballot by which a vegetable producer may vote without attending the meeting. The vegetable contractor shall conduct the voting by secret ballot. (c) To comply with this paragraph, a vegetable contractor shall file all of the following with the department: 1. A sworn statement certifying that the contract was approved in a vote of vegetable producers under this subsection. 2. Any additional security required under s. 126.61 (3). (6) CASH ON DELIVERY. A vegetable contractor shall pay cash on delivery under all vegetable procurement contracts if any of the following applies: (a) The vegetable contractor stated, in the vegetable contractor’s last annual statement under s. 126.56 (9) (g), that the vegetable contractor would pay cash on delivery. (b) The department disqualifies the vegetable contractor, under s. 126.59 (2) (c), or requires the vegetable contractor to pay cash on delivery under s. 126.61 (6) (e). History: 2001 a. 16; 2009 a. 296.
126.64 Vegetable contractors; prohibited practices. No vegetable contractor, or officer, employee, or agent of a vegetable contractor, may do any of the following: (1) Misrepresent the weight, grade, or quality of processing vegetables under a vegetable procurement contract. (2) Falsify any record or account, or conspire with any other person to falsify a record or account. (3) Make any false or misleading representation to the department. (4) If the vegetable contractor is licensed under s. 126.56, engage in any activity that is inconsistent with representations made in the vegetable contractor’s annual license application. (5) Make any false or misleading representation to a vegetable producer or producer agent related to matters regulated under this chapter. (6) Fail to file the full amount of security required under s. 126.61 (6) by the date that the department specifies. (7) Assault, threaten, intimidate, or otherwise interfere with an officer, employee, or agent of the department in the performance of his or her duties. History: 2001 a. 16; 2009 a. 296.
SUBCHAPTER VII RECOVERY PROCEEDINGS 126.68 Definitions. In this subchapter: (1) “Contributing contractor” means any of the following: (a) A contributing grain dealer, as defined in s. 126.10 (3). (b) A contributing grain warehouse keeper, as defined in s. 126.25 (2). (c) A contributing milk contractor, as defined in s. 126.40 (1). (d) A contributing vegetable contractor, as defined in s. 126.55 (4). (2) “Depositor” has the meaning given in s. 126.25 (5). (3) “Grain dealer” has the meaning given in s. 126.10 (9). (4) “Grain producer” has the meaning given in s. 126.10 (10). (5) “Grain warehouse keeper” has the meaning given in s. 126.25 (9). (6) “Milk contractor” has the meaning given in s. 126.40 (8). (7) “Milk producer” has the meaning given in s. 126.40 (10). (8) “Producer grain” has the meaning given in s. 126.10 (14).
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(9) “Producer milk” has the meaning given s. 126.40 (14). (10) “Vegetable contractor” has the meaning given in s. 126.55 (14). (11) “Vegetable procurement contract” has the meaning given in s. 126.55 (15). (12) “Vegetable producer” has the meaning given in s. 126.55 (16). History: 2001 a. 16.
126.70 Recovery proceedings. (1) DEFAULT CLAIMS. (a) A person who is one of the following may file a default claim with the department against a contractor who is licensed, or required to be licensed, under this chapter, unless the person has waived eligibility to file a claim as provided in pars. (b) and (c): 1. A grain producer or producer agent, as defined in s. 126.10 (13), who claims that a grain dealer has failed to pay, when due, for producer grain that the grain dealer procured in this state. 2. A depositor who is either a grain producer or a producer agent, as defined in s. 126.10 (13), and who claims that a grain warehouse keeper has failed to return stored grain or its equivalent upon demand. 3. A milk producer or producer agent, as defined in s. 126.40 (13), who claims that a milk contractor has failed to pay, when due, for producer milk procured in this state. 4. A vegetable producer or producer agent, as defined in s. 126.55 (12), who claims that a vegetable contractor has failed to make payment when due under a vegetable procurement contract. (b) A producer or producer agent may permanently waive eligibility to file a default claim against a grain dealer, milk contractor, or vegetable contractor if, at the time of the waiver, any of the following applies: 1. The producer or producer agent has a greater than 50 percent ownership interest in the grain dealer, milk contractor, or vegetable contractor. 2. Persons who collectively have a greater than 50 percent ownership interest in the producer or producer agent also collectively have a greater than 50 percent ownership interest in the grain dealer, milk contractor, or vegetable contractor. (c) A producer or producer agent shall file a waiver under par. (b) with the department in writing, on a form provided by the department. In the waiver, the producer or producer agent shall include documentation to show that the requirements in par. (b) are satisfied and that the individuals signing the waiver are authorized to do so on behalf of the producer or producer agent. (2) FILING DEFAULT CLAIMS. A claimant shall file a default claim under sub. (1) within 30 days after the claimant first learns of the default, subject to sub. (3). The claimant shall specify the nature and amount of the default. The department may investigate the alleged default and may require the claimant to provide supporting documentation. (3) INITIATING A RECOVERY PROCEEDING. (a) The department may initiate a recovery proceeding in response to one or more default claims under sub. (1). The department shall issue a written notice announcing the recovery proceeding. The department shall mail or deliver a copy of the notice to the contractor and each claimant in the proceeding. (b) If the department has reason to believe that other persons may have default claims under sub. (1) against the same contractor, the department may invite those persons to file their claims in the recovery proceeding. The department may publish the invitation in any of the following ways: 1. By posting it at the contractor’s place of business. 2. By publishing it as a class 3 notice under ch. 985.
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3. By mailing or delivering it to prospective claimants known to the department. 4. By other means that the department considers appropriate. (c) In its invitation under par. (b), the department may specify a deadline date and a procedure for filing default claims. An invitation may indicate the amount of a prospective claimant’s apparent claim and may ask the prospective claimant to verify or correct that amount. (d) The department may initiate separate recovery proceedings for default claims that comply with sub. (2) but are filed after the deadline date under par. (c). (4) AUDITING AND DISALLOWING CLAIMS. The department shall audit each claim included in a recovery proceeding. The department shall disallow a claim if the department finds any of the following: (a) That the claim is false or not adequately documented. (b) That the claimant filed the claim more than 30 days after the claimant first learned of the contractor’s default, unless the department specifies a later claim-filing deadline under sub. (3) (c). (c) That the claimant, without any contractual obligation to do so, continued to deliver grain, milk, or vegetables to the defaulting contractor more than 10 days after the claimant first learned of the contractor’s default. (d) That the claimant failed to comply with claim-filing deadlines or procedures specified under sub. (3) (c). (e) That the person filing the claim is not an authorized claimant under sub. (1). (f) That the defaulting contractor paid the amount due by check, but the claimant failed to present the check for payment within 30 days of receipt. (g) That the claim relates to a payment that first became due, under a deferred payment contract for grain, more than 120 days after the grain was delivered to the defaulting grain dealer. (gm) That the claim relates to a payment that first became due, under a deferred payment contract for milk, after the payment due date under s. 126.485 (4) (b). (h) That the claim relates to a payment that first became due, under a deferred payment contract for processing vegetables, after January 31 of any year for processing vegetables tendered or delivered to a vegetable contractor on or before December 31 of the preceding year. (i) That the claim relates to grain, milk, or vegetables that were never tendered to or received and accepted by the defaulting grain dealer, milk contractor, or vegetable contractor. This paragraph does not apply to unharvested acreage, as defined in s. 126.55 (17). (j) That the claimant has, under sub. (1) (b), permanently waived eligibility to file the claim. (k) That any of the following circumstances exists and causes the claim to be an unfair or unreasonable claim against the fund, regardless of whether the claimant has, under sub. (1) (b), waived the claim: 1. The claimant had a greater than 50 percent ownership interest in the defaulting contractor at the time of the default or at relevant times before the default. 2. Persons who collectively had a greater than 50 percent ownership interest in the claimant also had a greater than 50 percent ownership interest in the defaulting contractor at the time of the default or at relevant times before the default. 3. The claimant, or any of the claimant’s owners, officers, or managers, had substantial management control, at the time of the default or at relevant times before the default, over any of the defaulting contractor’s operations involved in the default.
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4. The claimant, or any of the claimant’s owners, officers, or managers, conspired with the defaulting contractor, or any of the defaulting contractor’s owners, officers, or managers, to create a default and a resulting claim against the fund. 5. Other circumstances that the department specifies by rule. (L) That the claimant was eligible, at any time before filing a default claim under sub. (2), to file a claim against the defaulting contractor in a federal bankruptcy proceeding under 11 USC 101 et seq. initiated by a party other than the claimant, or a proceeding under ch. 128 initiated by a party other than the claimant, or both, and did not file a claim against the defaulting contractor in each proceeding in which the claimant was eligible to file a claim. (5) ALLOWED CLAIM AMOUNTS. (a) The department shall determine the amount of an allowed claim based on the contract between the parties. If the contract terms are unclear, the department may determine the allowed claim amount based on local market prices, applicable milk marketing order prices, customs in the trade, or other evidence that the department considers appropriate. (b) Notwithstanding par. (a), if the default involves a grain warehouse keeper’s failure to return stored grain to a depositor upon demand, the department shall calculate the value of the grain based on local market prices on the day on which the depositor made the demand. (c) The department shall subtract from the allowed claim amount any offsetting payments made by the contractor and any obligations for which the claimant is liable to the contractor. (6) PROPOSED DECISION. After the department completes its audit under sub. (4), the department shall issue a proposed decision. The department shall mail or deliver a copy of the proposed decision to the contractor and each claimant. The department shall do all of the following in the proposed decision: (a) Specify proposed findings of fact, proposed conclusions of law, and a proposed order. (b) Allow or disallow each default claim and specify the amount of each allowed claim. The department may disallow part of a claim. (c) Specify, for each allowed claim, the amount that the department is authorized to pay under s. 126.71. (d) Specify the method, under s. 126.71, by which the department will pay the authorized amounts under par. (c). (e) Explain a claimant’s right under s. 126.87 (4) to seek court recovery of that portion of an allowed claim that is not paid by the department. (f) Specify a date by which the contractor or claimant may file written objections to the proposed decision. (g) Specify any further actions required of a claimant, including any further actions required to obtain payment under a trade credit insurance policy or other contingent financial backing under s. 126.06. (7) FINAL DECISION IF NO OBJECTIONS. If no contractor or claimant files a timely written objection to the proposed decision under sub. (6), the department may issue the proposed decision as the department’s final decision in the recovery proceeding, without further notice or hearing. The department shall mail or deliver a copy of the final decision to the contractor and each claimant. (8) OBJECTIONS TO PROPOSED DECISION; NOTICE, HEARING, AND FINAL DECISION. (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,
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the department shall issue a final decision affirming or modifying the proposed decision under sub. (6). (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). History: 2001 a. 16; 2009 a. 296; 2017 a. 155.
126.71
Paying default claims. (1) CLAIMS AGAINST CONExcept as provided in sub. (2) or (3), the department shall pay from the appropriate sources under s. 126.72 the following default claim amounts: (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: 1. Eighty percent of the first $60,000 allowed. 2. Seventy-five percent of any amount allowed in excess of $60,000. (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. (c) For each default claim allowed under s. 126.70 against a vegetable contractor who was a contributing contractor when the default occurred: 1. Ninety percent of the first $40,000 allowed. 2. Eighty-five percent of the next $40,000 allowed. 3. Eighty percent of the next $40,000 allowed. 4. Seventy-five percent of any amount allowed in excess of $120,000. (1m) WHEN DEFAULT OCCURS. For the purposes of this chapter, a default occurs on the date on which payment or delivery becomes overdue. (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: (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. (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. (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 TRIBUTING CONTRACTOR.
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pay claimants on a prorated basis in proportion to their allowed claims. (3) PAYMENT RESTRICTIONS. (a) The department may not pay any portion of the following from any source identified in s. 126.72: 4. A default claim allowed against a contractor who was not a contributing contractor when the default occurred. 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). (b) The department may not pay any default claim under this chapter, except as provided in sub. (1) or (2). (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. (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. History: 2001 a. 16; 2003 a. 38; 2005 a. 80; 2009 a. 296.
126.72 Claims against contributing contractor; payment sources. (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). (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. (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. History: 2001 a. 16; 2003 a. 38; 2009 a. 296.
126.73 Reimbursing payments. (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. (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. (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. (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 con-
May 22, 2026, are designated by NOTES. (Published 5-22-26)
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tractor and against any party that would otherwise be liable to the claimant for the amount of the default. History: 2001 a. 16; 2003 a. 38; 2009 a. 296; 2017 a. 155.
SUBCHAPTER VIII ADMINISTRATION AND ENFORCEMENT 126.78 Definitions. In this subchapter: (1) “Contributing contractor” has the meaning given in s. 126.68 (1). (2) “Depositor” has the meaning given in s. 126.25 (5). (3) “Grain dealer” has the meaning given in s. 126.10 (9). (4) “Grain warehouse keeper” has the meaning given in s. 126.25 (9). (5) “Milk contractor” has the meaning given in s. 126.40 (8). (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). (7) “Vegetable contractor” has the meaning given in s. 126.55 (14). (8) “Vegetable producer” has the meaning given in s. 126.55 (16). History: 2001 a. 16.
126.80 Department authority; general. The department shall administer this chapter. History: 2001 a. 16.
126.81 Rule-making. (1) The department may promulgate rules to do any of the following: (a) Interpret and implement this chapter. (b) Modify the license fees and surcharges under s. 126.41 (3). (c) Specify additional circumstances for denying claims under s. 126.70 (4) (k). (d) Require a contractor to notify producers and producer agents of the contractor’s license, security, or fund contribution status under this chapter. (2m) The department shall promulgate rules to do all of the following: (a) Specify license fees and surcharges under ss. 126.11 (4), 126.26 (3), and 126.56 (4). (b) Specify fund assessments under s. 126.46 (1). History: 2001 a. 16; 2009 a. 296; 2011 a. 260 s. 80.
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: (1) Whether a contractor complies with this chapter. (2) Whether a contractor is able to honor contract obligations when due. (3) Whether a contractor has failed to honor contract obligations when due. (4) Whether a grain warehouse keeper has sufficient grain on hand to meet the grain warehouse keeper’s obligations to depositors. (5) The nature and amount of a contractor’s storage obligations or other contract obligations. History: 2001 a. 16.
126.83
Information. The department may require a contrac-
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tor to provide information that is relevant to the administration and enforcement of this chapter. History: 2001 a. 16.
126.84 Records; confidentiality. (1) PUBLIC RECORDS EXEMPTION. The following records obtained by the department under this chapter are not open to public inspection under s. 19.35: (a) Contractor financial statements. (b) A contractor’s purchase, storage, or procurement records. (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. History: 2001 a. 16.
126.85 Remedial orders. (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. (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: (a) A contractor fails to pay producers according to this chapter or according to the contractor’s contracts with producers. (b) A contractor fails to file replacement insurance within the time required under this chapter. (c) A contractor fails to file security according to this chapter, or in response to the department’s demand under this chapter. (d) A contractor fails to pay a fund assessment when due. (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. (f) A grain warehouse keeper fails to return grain to depositors upon demand, as required under s. 126.34 (4). (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: 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. 2. The grain warehouse keeper fails to correct the deficiency within 15 days after receiving the department’s written notice that a deficiency exists. (h) A contractor fails to file a financial statement with the department by the time or in the form required under this chapter. (i) A contractor fails to pay an amount owed under s. 126.73 within 60 days after the contractor receives a written demand for payment from the department or other person to whom payment is due under s. 126.73. (3) HEARING ON SUMMARY ORDER. (a) A contractor named in a summary order under sub. (2) may, within 10 days after receiving the order, request a hearing on the order. The department
May 22, 2026, are designated by NOTES. (Published 5-22-26)
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shall hold an informal hearing as soon as possible after receiving a hearing request, but not later than 10 days after receiving the hearing request, unless the contractor waives the informal hearing or agrees to hold it at a later date. If the matter is not resolved at the informal hearing, the department shall hold a contested case hearing under ch. 227 as soon as reasonably possible. (b) A hearing request under par. (a) does not automatically stay a summary order. The department may stay a summary order pending hearing. History: 2001 a. 16; 2009 a. 296.
126.86 License actions. (1) GENERAL. The department may for cause deny, suspend, revoke, or impose conditions on a contractor’s license, as provided in s. 93.06 (7) and (8). Cause may include any of the following: (a) The contractor fails to comply with this chapter or a rule promulgated under this chapter. (b) The contractor fails to comply with an order that the department issues under this chapter. (c) The contractor fails to provide relevant information that the department requests under this chapter or falsifies information provided to the department. (d) The contractor fails to file a financial statement, security, fees, or assessments required under this chapter, or fails to meet other requirements for licensing. (e) The contractor fails to honor contract obligations to persons who are authorized to file default claims under s. 126.70 (1). (f) The contractor fails to pay an amount owed under s. 126.73 within 60 days after the contractor receives a written demand for payment from the department or other person to whom payment is due under s. 126.73. (2) HEARING ON LICENSE ACTION; GENERAL. Except as provided in sub. (3), the department shall give a contractor notice and an opportunity for hearing before the department suspends, revokes, or imposes conditions on a license held by the contractor. (3) SUMMARY ACTION. (a) The department may, without prior notice or hearing, summarily suspend, revoke, or impose conditions on a license held by a contractor if the department finds that any of the conditions identified in s. 126.85 (2) exist or otherwise finds that summary action is necessary to prevent a clear and imminent threat of harm to persons protected under this chapter. (b) A contractor who is the subject of a summary action under par. (a) may, within 10 days after receiving notice of that action, request a hearing on the action. The department shall hold an informal hearing as soon as possible after receiving a hearing request, but not later than 10 days after receiving the hearing request, unless the contractor waives the informal hearing or agrees to hold it at a later date. If the matter is not resolved at the informal hearing, the department shall hold a contested case hearing under ch. 227 as soon as reasonably possible. (c) A request for hearing under par. (b) does not automatically stay a summary action under par. (a). The department may stay a summary action pending hearing. History: 2001 a. 16; 2003 a. 38; 2009 a. 296.
126.87 Court actions. (1) INJUNCTION. The department may petition the circuit court for an ex parte temporary restraining order, a temporary injunction, or a permanent injunction to prevent, restrain, or enjoin any person from violating this chapter, any rule promulgated under this chapter, or any order issued under this chapter. The department may seek this remedy in addition to any other penalty or remedy provided under this chapter. (2) PENALTIES. (a) A person who violates this chapter, a rule
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promulgated under this chapter, or an order issued under this chapter is subject to a forfeiture of not less than $250 nor more than $5,000 for each violation. (b) A person who intentionally violates this chapter, a rule promulgated under this chapter, or an order issued under this chapter may be fined not more than $10,000 or imprisoned for not more than one year in the county jail or both. (4) PRIVATE REMEDY. (a) A person whose claim is allowed under s. 126.70 may bring an action against the contractor to recover the amount of the allowed claim, less any recovery amount that the department pays to the claimant under s. 126.71. In any court action under this subsection, the claimant may recover costs including all reasonable attorney fees, notwithstanding s. 814.04 (1). This subsection does not limit any other legal cause of action that the claimant may have against the contractor. (b) A claim allowed under s. 126.70 has the same priority in an insolvency proceeding or creditor’s action as a claim for wages, except as otherwise provided by federal law. (5) COLLECTIONS. The department may bring an action in court to recover any unpaid amount that a contractor owes the department under this chapter, including any unpaid fund assessment or reimbursement. History: 2001 a. 16.
126.88 Modifying fund assessments. (1) The department may by rule modify the fund assessments provided under s. 126.15, 126.30, or 126.60. The department shall modify fund assessments under ss. 126.15, 126.30, 126.46, and 126.60 as necessary to do all of the following: (a) Maintain an overall fund balance of at least $5,000,000, but not more than $22,000,000. (b) Maintain a combined fund balance attributable to grain dealers and grain warehouse keepers of at least $1,200,000, but not more than $7,000,000. (d) Maintain a fund balance attributable to milk contractors of at least $3,000,000, but not more than $12,000,000. (e) Maintain a fund balance attributable to vegetable contractors of at least $800,000, but not more than $3,000,000. (2) (a) If the fund balance for a portion of the fund under sub. (1) (b) to (e) falls below the minimum amount required for that portion of the fund, the department shall by rule modify the assessment rates for the type of contractor that contributes to that portion of the fund so that the assessment rates are adequate to reach and maintain the minimum balance within a reasonable time. (b) The department may use the procedure under s. 227.24 to promulgate a rule modifying an assessment under par. (a). In a rule promulgated under this paragraph, the department may not provide that the modification of an assessment takes effect before the beginning of the next license year. Notwithstanding s. 227.24 (1) (c) and (2), a rule promulgated under this paragraph may remain in effect for not more than 24 months. Notwithstanding s. 227.24 (1) (a) and (3), the department is not required to determine that promulgating a rule under this paragraph as an emergency rule is necessary for the preservation of the public peace, health, safety, or welfare and is not required to provide a finding of emergency for a rule promulgated under this paragraph. History: 2001 a. 16; 2009 a. 296; 2017 a. 155.
126.89 Calculations. If a number used in or resulting from a calculation made to determine the amount of an assessment under s. 126.15, 126.30, 126.46, or 126.60, other than a number that appears in one of those sections, extends more than 6 decimal places to the right of the decimal point, a person making the calculation shall round the number to the nearest whole digit in the
May 22, 2026, are designated by NOTES. (Published 5-22-26)
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6th decimal place to the right of the decimal point. The amount of an assessment may be rounded to the nearest whole dollar. History: 2001 a. 16.
126.90 Agricultural producer security council. The agricultural producer security council shall advise the department on the administration and enforcement of this chapter. The
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council shall meet as often as the department considers necessary, but at least once annually. The department shall inform the council of fund balances and payments. The department shall consult with the council before acquiring any contingent financial backing under s. 126.06 and before modifying any license fee, license surcharge, or fund assessment under this chapter. History: 2001 a. 16; 2003 a. 38.
May 22, 2026, are designated by NOTES. (Published 5-22-26)