Amendment AA1-ASA1-SB55

SB55-ASA1-AA1,885,19 (a) Procures milk in this state solely as a producer agent.

SB55-ASA1-AA1,885,20 (b) Complies with the rules promulgated under s. 126.51.

SB55-ASA1-AA1,885,23 126.41 Milk contractors; licensing. (1) Annual license. (a) No milk contractor may do any of the following without a current annual license from the department:

SB55-ASA1-AA1,885,24 1. Receive producer milk in this state.

SB55-ASA1-AA1,886,2 2. Collect producer milk from a dairy farm in another state for direct shipment to a dairy plant that the milk contractor operates in this state.

SB55-ASA1-AA1,886,4 3. Acquire the right to market, as a producer agent, producer milk produced in this state.

SB55-ASA1-AA1,886,7 (b) A milk contractor who is not engaged in any activities under par. (a) may volunteer to be licensed if the milk contractor receives, outside this state, direct shipments of producer milk from dairy farms in this state.

SB55-ASA1-AA1,886,10 (c) The department shall issue annual milk contractor licenses under pars. (a) and (b). A license expires on the April 30 following its issuance. No person may transfer or assign a license issued under par. (a) or (b).

SB55-ASA1-AA1,886,13 (2) License application. A milk contractor shall apply for a license under sub. (1) in writing, on a form provided by the department. An applicant shall provide all of the following:

SB55-ASA1-AA1,886,17 (a) The applicant's legal name and any trade name under which the applicant proposes to operate as a milk contractor. If the milk contractor is a dairy plant operator licensed under s. 97.20, the milk contractor shall use the same legal name in both license applications.

SB55-ASA1-AA1,886,22 (b) A statement of whether the applicant is an individual, corporation, partnership, cooperative, limited liability company, trust, or other legal entity. If the applicant is a corporation or cooperative, the applicant shall identify each officer of the corporation or cooperative. If the applicant is a partnership, the applicant shall identify each partner.

SB55-ASA1-AA1,886,24 (c) The mailing address of the applicant's primary business location and the name of a responsible individual who may be contacted at that location.

SB55-ASA1-AA1,887,3 (d) The street address of each business location from which the applicant will operate under the license and the name of a responsible person who may be contacted at each location that is staffed.

SB55-ASA1-AA1,887,4 (e) All license fees and surcharges required under sub. (3).

SB55-ASA1-AA1,887,5 (f) The sworn and notarized statement required under sub. (6).

SB55-ASA1-AA1,887,6 (g) A financial statement if required under s. 126.44 (1) and not yet filed.

SB55-ASA1-AA1,887,7 (h) Other relevant information required by the department.

SB55-ASA1-AA1,887,11 (3) Annual license fees and surcharges. A milk contractor applying for a license under sub. (1) shall include the following fees and surcharges with the license application, unless the department specifies a different fee or surcharge amount by rule:

SB55-ASA1-AA1,887,13 (a) A nonrefundable license processing fee of $25, regardless of whether application is made after the beginning of a license year.

SB55-ASA1-AA1,887,18 (b) A license surcharge of $500 if the department determines that, within 365 days before submitting the license application, the applicant operated 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 any license year in which the applicant violated sub. (1).

SB55-ASA1-AA1,887,21 (c) A license surcharge of $100 if during the preceding 12 months the applicant failed to file an annual financial statement required under s. 126.44 (1) (b) by the applicable deadline.

SB55-ASA1-AA1,887,23 (d) A license surcharge of $100 if a renewal applicant fails to renew a license by the license expiration date of April 30.

SB55-ASA1-AA1,888,3 (3m) Effect of payment of surcharge. Payment under sub. (3) (b) 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.

SB55-ASA1-AA1,888,5 (4) Fee statement. The department shall provide, with each license application form, a written statement of all license fees and surcharges required under sub. (3).

SB55-ASA1-AA1,888,10 (5) 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. (4). 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.

SB55-ASA1-AA1,888,14 (6) Sworn and notarized statement. As part of a license application under sub. (2), an applicant shall provide a sworn and notarized statement, signed by the applicant or an authorized officer of the applicant, that reports all of the following information:

SB55-ASA1-AA1,888,18 (a) The total milk payroll obligations that the applicant incurred during the applicant's last completed fiscal year. If the applicant has not yet operated as a milk contractor, the applicant shall estimate the total milk payroll obligations that the applicant will incur during the applicant's first complete fiscal year.

SB55-ASA1-AA1,888,20 (b) The largest amount of unpaid milk payroll obligations that the milk contractor had at any time during the milk contractor's last completed fiscal year.

SB55-ASA1-AA1,888,22 (c) The identity of any producer agents from whom the milk contractor procures producer milk.

SB55-ASA1-AA1,888,23 (d) Other relevant information required by the department.

SB55-ASA1-AA1,889,2 (7) Action granting or denying application. The department shall grant or deny a license application under sub. (2) within 30 days after the department receives a complete application. If the department denies a license application, the department shall give the applicant written notice stating the reasons for the denial.

SB55-ASA1-AA1,889,5 (8) License displayed. A milk contractor licensed under sub. (1) shall prominently display a true copy of that license at each business location from which the milk contractor operates in this state.

SB55-ASA1-AA1,889,8 (9) Notification required. A milk contractor who files security under s. 126.47 shall immediately notify the department if, at any time, the milk contractor's unpaid milk payroll obligations exceed the amount last reported under sub. (6) (b).

SB55-ASA1-AA1,889,15 126.42 Milk contractors; monthly license fee. (1) Monthly license fee payment. Except as provided under sub. (5) or (6), a milk contractor licensed under s. 126.41 (1) shall pay to the department, by the 25th day of each month, a monthly license fee of 0.15 cent for each 100 pounds of producer milk that the milk contractor procured in this state during the preceding month. The milk contractor shall submit, with the fee payment, a report stating the number of pounds of producer milk that the milk contractor procured in this state during the preceding month.

SB55-ASA1-AA1,889,19 (2) Late payment surcharge. If a milk contractor fails to pay a monthly fee under sub. (1) when due, the milk contractor shall pay, in addition to that monthly fee, a surcharge equal to 20% of the monthly fee. The milk contractor shall pay the surcharge by the 25th day of the following month.

SB55-ASA1-AA1,890,4 (3) Fee credits. If the balance in the fund contributed by milk contractors exceeds $4,000,000 on February 28 of any license year, the department shall credit 50% of the excess amount against fees charged under sub. (1) to contributing milk contractors who file timely renewal applications for the next license year. The department shall credit each contributing milk contractor on a prorated basis, in proportion to the total fees that the milk contractor has paid under sub. (1) for the 4 preceding license years. Each month that a contributing contractor who qualifies for a credit under this subsection pays fees under sub. (1), the department shall credit to the contributing milk contractor one-twelfth of the total annual credit determined under this subsection.

SB55-ASA1-AA1,890,8 (4) Fee statement. Whenever the department issues an annual license to a milk contractor under s. 126.41 (1), the department shall give the milk contractor notice of the monthly fees required under this section. The department shall specify all of the following:

SB55-ASA1-AA1,890,9 (a) The method for computing the monthly fee.

SB55-ASA1-AA1,890,10 (b) The date by which the milk contractor must pay the fee each month.

SB55-ASA1-AA1,890,11 (c) The late payment surcharge that may apply under sub. (2).

SB55-ASA1-AA1,890,12 (d) The fee credit, if any, that applies under sub. (3).

SB55-ASA1-AA1,890,16 (5) Producer agents; exemption. A producer agent is not required to pay the monthly fee under sub. (1) for producer milk that the producer agent markets to a milk contractor who is licensed under s. 126.41 (1) and who pays the monthly fee on the same milk.

SB55-ASA1-AA1,890,18 (6) Fee changes. The department may modify the license fees under sub. (1) by rule, as provided under s. 126.81 (2).

SB55-ASA1-AA1,890,25 126.43 Milk contractors; insurance. (1) Fire and extended coverage insurance. A milk contractor licensed under s. 126.41 (1) shall maintain fire and extended coverage insurance that covers, at their full value, all milk and milk products in the possession, custody, or control of the milk contractor. If the milk contractor is required to be licensed under s. 126.41 (1) (a), the milk contractor shall maintain insurance issued by an insurance company authorized to do business in this state.

SB55-ASA1-AA1,891,3 (2) Insurance cancellation; replacement. Whenever an insurance policy under sub. (1) is canceled, the milk contractor shall replace the policy so that there is no lapse in coverage.

SB55-ASA1-AA1,891,6 (3) Insurance coverage; misrepresentation. No milk contractor may misrepresent any of the following to the department or to any milk producer or producer agent:

SB55-ASA1-AA1,891,7 (a) That the milk contractor is insured.

SB55-ASA1-AA1,891,9 (b) The nature, coverage, or material terms of the milk contractor's insurance policy.

SB55-ASA1-AA1,891,14 126.44 Milk contractors; financial statements. (1) Required annual financial statement. (a) A milk contractor shall file an annual financial statement with the department before the department first licenses the milk contractor under s. 126.41 (1), unless the milk contractor reports no more than $1,500,000 in annual milk payroll obligations under s. 126.41 (6) (a).

SB55-ASA1-AA1,891,21 (b) Except as provided in par. (c), a milk contractor licensed under s. 126.41 (1) shall file an annual financial statement with the department during each license year. The milk contractor shall file the annual financial statement by the 15th day of the 4th month following the close of the milk contractor's fiscal year. The department may extend the filing deadline for up to 30 days if the milk contractor, or the accountant preparing the financial statement, files a written extension request at least 10 days before the filing deadline.

SB55-ASA1-AA1,891,22 (c) Paragraph (b) does not apply to any of the following:

SB55-ASA1-AA1,891,24 1. A contributing milk contractor who reports no more than $1,500,000 in annual milk payroll obligations under s. 126.41 (6) (a).

SB55-ASA1-AA1,892,2 2. A contributing milk contractor who procures producer milk in this state solely as a producer agent.

SB55-ASA1-AA1,892,5 (2) Voluntary annual financial statement. A milk contractor licensed under s. 126.41 (1) 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:

SB55-ASA1-AA1,892,6 (a) To avoid being required to contribute to the fund under s. 126.45 (1) (a).

SB55-ASA1-AA1,892,7 (b) To qualify for a lower fund assessment under s. 126.46.

SB55-ASA1-AA1,892,15 (3) Quarterly financial statements. A milk contractor licensed under s. 126.41 (1) who is not a contributing milk contractor shall file quarterly financial statements with the department for the first 3 quarters in each of the milk contractor's fiscal years. The milk contractor shall file each quarterly financial statement no later than 60 days after the end of the fiscal quarter to which the financial statement pertains. With each quarterly financial statement, the milk contractor shall include the milk contractor's sworn and notarized statement that the financial statement is correct.

SB55-ASA1-AA1,892,19 (5) Reviewed or audited financial statement. (a) A milk contractor filing an annual financial statement under sub. (1) or (2) shall file an audited financial statement if the milk contractor reports more than $6,000,000 in annual milk payroll obligations under s. 126.41 (6) (a).

SB55-ASA1-AA1,892,22 (b) If par. (a) does not apply, a milk contractor filing an annual financial statement under sub. (1) or (2) shall file either a reviewed financial statement or an audited financial statement.

SB55-ASA1-AA1,893,2 (6) Accounting period. A milk contractor filing an annual financial statement under sub. (1) or (2) shall file a financial statement that covers the milk contractor's last completed fiscal year unless the milk contractor has been in business for less than one year.

SB55-ASA1-AA1,893,8 (6m) Interim financial statement. The department may, at any time, require a milk contractor licensed under s. 126.41 (1) to file an interim financial statement with the department. With the interim financial statement, the milk contractor shall provide the milk contractor's sworn and notarized statement that the financial statement is correct. An interim financial statement need not be a reviewed financial statement or an audited financial statement.

SB55-ASA1-AA1,893,12 (7) Generally accepted accounting principles. (a) Except as provided in par. (b), a milk contractor filing an annual financial statement under this section shall file a financial statement that is prepared according to generally accepted accounting principles.

SB55-ASA1-AA1,893,15 (b) If a milk contractor is a sole proprietor and the milk contractor's financial statement is not audited, the milk contractor shall file a financial statement that is prepared on a historical cost basis.

SB55-ASA1-AA1,893,21 (8) Financial statement contents. (a) Except as provided in par. (b), a milk 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 milk contractor is a sole proprietor, the milk contractor shall file his or her business and personal financial statements.

SB55-ASA1-AA1,893,25 (b) If a milk contractor has been in business for less than one year, the milk contractor may file an annual financial statement under sub. (1) or (2) consisting of a balance sheet and notes. A milk contractor may file a quarterly financial statement under sub. (3) consisting of a balance sheet and income statement.

SB55-ASA1-AA1,894,3 (c) A milk 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:

SB55-ASA1-AA1,894,5 1. The milk contractor's current ratio, excluding any assets required to be excluded under sub. (9).

SB55-ASA1-AA1,894,7 2. The milk contractor's debt to equity ratio, excluding any assets required to be excluded under sub. (9).

SB55-ASA1-AA1,894,10 (9) Assets excluded. A milk contractor may not include any of the following assets in the calculations under sub. (8) (c), unless the department specifically approves their inclusion:

SB55-ASA1-AA1,894,14 (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.

SB55-ASA1-AA1,894,16 (b) A note or account receivable from a parent organization, a subsidiary, or an affiliate other than an employee.

SB55-ASA1-AA1,894,19 (c) A note or account that has been receivable for more than one year, unless the milk contractor has established an equal offsetting reserve for uncollectible notes and accounts receivable.

SB55-ASA1-AA1,894,22 (10) 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.

SB55-ASA1-AA1,894,25 (11) Department review. The department may analyze a financial statement submitted under this section and may reject a financial statement that fails to comply with this section.

SB55-ASA1-AA1,895,4 126.45 Contributing milk contractors; disqualification. (1) Required contributors. (a) Except as provided in sub. (3), a licensed milk contractor shall pay fund assessments under s. 126.46 if the milk contractor does not file annual and quarterly financial statements under s. 126.44.

SB55-ASA1-AA1,895,12 (b) Except as provided in sub. (3), a licensed milk contractor shall pay fund assessments under s. 126.46 if the milk contractor files an annual, quarterly, or interim financial statement under s. 126.44 that shows a current ratio of less than 1.25 to 1.0, a debt to equity ratio of more than 2.0 to 1.0, or negative equity. The milk contractor shall continue to pay fund assessments until the milk contractor files 2 consecutive annual financial statements under s. 126.44 that show a current ratio of at least 1.25 to 1.0, positive equity, and a debt to equity ratio of not more than 2.0 to 1.0.

SB55-ASA1-AA1,895,15 (2) Voluntary contributors. Except as provided in sub. (3), a licensed milk contractor who is not required to pay fund assessments under s. 126.46 may elect to do so.

SB55-ASA1-AA1,895,20 (3) Disqualified contractors. (a) A milk contractor who is required to file security under s. 126.47 (1) is disqualified from the fund until the department releases that security under s. 126.47 (7) (a). This paragraph does not apply, during the period beginning on May 1, 2002, and ending on April 30, 2007, to a qualified producer agent who files security under s. 126.47 (3) (c).

SB55-ASA1-AA1,895,22 (b) A milk contractor is disqualified from the fund if the department denies, suspends, or revokes the milk contractor's license.

SB55-ASA1-AA1,895,24 (c) The department may, by written notice, disqualify a milk contractor for any of the following reasons:

SB55-ASA1-AA1,895,25 1. Failure to pay fund assessments under s. 126.46 when due.

SB55-ASA1-AA1,896,1 2. Failure to file a financial statement under s. 126.44 when due.

SB55-ASA1-AA1,896,5 3. Failure to reimburse the department, within 60 days after the department issues a reimbursement demand under s. 126.73 (1), for the full amount that the department pays to claimants under s. 126.72 (1) because of that milk contractor's default.

SB55-ASA1-AA1,896,9 4. Failure to reimburse a bond surety, within 60 days after the bond surety issues a reimbursement demand under s. 126.73 (2), for the full amount that the surety pays to the department under s. 126.72 (2) or (3) for the benefit of claimants affected by that milk contractor's default.

SB55-ASA1-AA1,896,14 (4) Effect of disqualification. (a) A milk contractor disqualified under sub. (3) (c) may not engage in any activities for which a license is required under s. 126.41 (1) (a) if the milk contractor files an annual, quarterly, or interim financial statement under s. 126.44 that shows a current ratio of less than 1.25 to 1.0, a debt to equity ratio of more than 2.0 to 1.0, or negative equity.

SB55-ASA1-AA1,896,16 (b) The department may not return, to a disqualified milk contractor, any fund assessments that the milk contractor paid as a contributing milk contractor.

SB55-ASA1-AA1,896,20 (c) A disqualified milk contractor remains liable for any unpaid fund installment under s. 126.46 that became due while the milk contractor was a contributing milk contractor. A disqualified milk contractor is not liable for any fund installment that becomes due after the milk contractor is disqualified under sub. (3).

SB55-ASA1-AA1,896,24 126.46 Contributing milk contractors; fund assessments. (1) General. A contributing milk contractor shall pay an annual fund assessment for each license year. The assessment equals $20 or the sum of the following, whichever is greater, unless the department by rule specifies a different assessment:

SB55-ASA1-AA1,897,4 (a) The milk contractor's current ratio assessment. The current ratio assessment for a license year equals the milk contractor's current ratio assessment rate under sub. (2) multiplied by the annual milk payroll obligations reported under s. 126.41 (6) (a) in the milk contractor's license application for that license year.