SB55-ASA1-AA1,900,1212
2. Divide the amount determined under subd. 1. by 3.
SB55-ASA1-AA1,900,1313
3. Raise the amount determined under subd. 2. to the 9th power.
SB55-ASA1-AA1,900,1414
4. Divide the debt to equity ratio by 3.25.
SB55-ASA1-AA1,900,1515
5. Raise the amount determined under subd. 4. to the 5th power.
SB55-ASA1-AA1,900,1716
6. Add the amount determined under subd. 3. to the amount determined under
17subd. 5.
SB55-ASA1-AA1,900,1818
7. Add 0.025 to the amount determined under subd. 6.
SB55-ASA1-AA1,900,2219
(c) If the milk contractor has filed an annual financial statement under s.
20126.44 and that financial statement shows negative equity or a debt to equity ratio
21of at least 3.1 to 1.0, the milk contractor's debt to equity ratio assessment rate equals
22the debt to equity ratio assessment factor in sub. (5) (b) multiplied by 0.8146917.
SB55-ASA1-AA1,901,223
(d) Except as provided in par. (e), if the milk contractor has not filed an annual
24financial statement under s. 126.44, the milk contractor's debt to equity ratio
1assessment rate equals the debt to equity ratio assessment factor in sub. (5) (b)
2multiplied by 0.11325375.
SB55-ASA1-AA1,901,83
(e) If the milk contractor has not filed an annual financial statement under s.
4126.44 and the milk contractor procures producer milk in this state solely as a
5producer agent, the milk contractor's debt to equity ratio assessment rate is 0.00025,
6except that, for the milk contractor's 5th or higher consecutive full license year of
7participation in the fund, the milk contractor's debt to equity ratio assessment rate
8is 0.000175.
SB55-ASA1-AA1,901,10
9(5) D
ebt to equity ratio assessment factor. (a) A milk contractor's debt to
10equity ratio assessment factor under sub. (4) (a) is 0.0015, except as follows:
SB55-ASA1-AA1,901,1211
1. For the milk contractor's 3rd consecutive full license year as a contributing
12milk contractor, the milk contractor's current ratio assessment factor is 0.001.
SB55-ASA1-AA1,901,1413
2. For the milk contractor's 4th consecutive full license year as a contributing
14milk contractor, the milk contractor's current ratio assessment factor is 0.0005.
SB55-ASA1-AA1,901,1715
3. For the milk contractor's 5th or higher consecutive full license year as a
16contributing milk contractor, the milk contractor's current ratio assessment factor
17is zero.
SB55-ASA1-AA1,901,2118
(b) A milk contractor's debt to equity ratio assessment factor under sub. (4) (b)
19to (d) is 0.00225, except that, for the milk contractor's 5th or higher consecutive full
20license year as a contributing milk contractor, the milk contractor's debt to equity
21ratio assessment factor is 0.001.
SB55-ASA1-AA1,901,24
22(6) Q
uarterly installments. (a) A contributing milk contractor shall pay the
23milk contractor's annual fund assessment in equal quarterly installments that are
24due as follows:
SB55-ASA1-AA1,901,2525
1. The first installment is due on June 1 of the license year.
SB55-ASA1-AA1,902,1
12. The 2nd installment is due on September 1 of the license year.
SB55-ASA1-AA1,902,22
3. The 3rd installment is due on December 1 of the license year.
SB55-ASA1-AA1,902,33
4. The 4th installment is due on March 1 of the license year.
SB55-ASA1-AA1,902,54
(b) A contributing milk contractor may prepay any of the quarterly
5installments under par. (a).
SB55-ASA1-AA1,902,106
(c) A contributing milk contractor who applies for an annual license after the
7beginning of a license year shall pay the full annual fund assessment required under
8this section. The milk contractor shall pay, with the first quarterly installment that
9becomes due after the day on which the department issues the license, all of the
10quarterly installments for that license year that were due before that day.
SB55-ASA1-AA1,902,1411
(d) If s. 126.45 (1) (b) requires a licensed milk contractor to become a
12contributing milk contractor during the license year, the milk contractor shall pay
13only those quarterly installments that become due after the requirement takes
14effect.
SB55-ASA1-AA1,902,1815
(e) A contributing milk contractor who fails to pay the full amount of any
16quarterly installment when due shall pay, in addition to that installment, a late
17payment penalty of $50 or 10% of the overdue installment amount, whichever is
18greater.
SB55-ASA1-AA1,902,21
19(7) N
otice of annual assessment and quarterly installments. When the
20department issues an annual license to a contributing milk contractor, the
21department shall notify the milk contractor of all of the following:
SB55-ASA1-AA1,902,2322
(a) The amount of the milk contractor's annual fund assessment under this
23section.
SB55-ASA1-AA1,902,2524
(b) The amount of each required quarterly installment under sub. (6) and the
25date by which the milk contractor must pay each installment.
SB55-ASA1-AA1,903,2
1(c) The penalty that applies under sub. (6) (e) if the milk contractor fails to pay
2any quarterly installment when due.
SB55-ASA1-AA1,903,6
3126.47 Milk contractors; security. (1) S
ecurity required. A milk
4contractor shall file security with the department, and maintain that security until
5the department releases it under sub. (7), if all of the following apply when the
6department first licenses the milk contractor under s. 126.41 (1):
SB55-ASA1-AA1,903,87
(a) The milk contractor reports more than $1,500,000 in annual milk payroll
8obligations under s. 126.41 (6) (a).
SB55-ASA1-AA1,903,109
(b) The milk contractor files an annual financial statement under s. 126.44 (1)
10and that financial statement shows negative equity.
SB55-ASA1-AA1,903,13
11(2) S
ecurity continued. A milk contractor who filed security under s. 100.06,
121999 stats., before May 1, 2002, shall maintain that security until the department
13releases it under sub. (7).
SB55-ASA1-AA1,903,16
14(3) A
mount of security. A milk contractor who is required to file or maintain
15security under this section shall at all times maintain the following amount of
16security:
SB55-ASA1-AA1,903,1817
(a) Except as provided in par. (b) or (c), security equal to at least 75% of the
18amount last reported under s. 126.41 (6) (b) or (9).
SB55-ASA1-AA1,903,2119
(b) Except as provided in par. (c), for a milk contractor who procures milk in this
20state solely as a qualified producer agent, security equal to at least the following
21amounts:
SB55-ASA1-AA1,903,2322
1. For the license year beginning on May 1, 2002, 15% of the amount last
23reported under s. 126.41 (6) (b) or (9).
SB55-ASA1-AA1,903,2524
2. For the license year beginning on May 1, 2003, 30% of the amount last
25reported under s. 126.41 (6) (b) or (9).
SB55-ASA1-AA1,904,2
13. For the license year beginning on May 1, 2004, 45% of the amount last
2reported under s. 126.41 (6) (b) or (9).
SB55-ASA1-AA1,904,43
4. For the license year beginning on May 1, 2005, 60% of the amount last
4reported under s. 126.41 (6) (b) or (9).
SB55-ASA1-AA1,904,65
5. For a license year beginning after May 1, 2005, 75% of the amount last
6reported under s. 126.41 (6) (b) or (9).
SB55-ASA1-AA1,904,107
(c) For a contributing milk contractor who procures milk in this state solely as
8a qualified producer agent, for the period beginning on May 1, 2002, and ending on
9April 30, 2007, security equal to at least 7.5% of the amount last reported under s.
10126.41 (6) (b) or (9), but not more than $500,000.
SB55-ASA1-AA1,904,13
11(4) F
orm of security. The department shall review, and determine whether
12to approve, security filed under this section. The department may approve only the
13following types of security:
SB55-ASA1-AA1,904,1515
(b) A commercial surety bond if all of the following apply:
SB55-ASA1-AA1,904,1716
1. The surety bond is made payable to the department for the benefit of milk
17producers and producer agents.
SB55-ASA1-AA1,904,1918
2. The surety bond is issued by a person authorized to operate a surety business
19in this state.
SB55-ASA1-AA1,904,2220
3. The surety bond is issued as a continuous term bond that may be canceled
21only with the department's written agreement or upon 90 days' prior written notice
22served on the department in person or by certified mail.
SB55-ASA1-AA1,904,2423
4. The surety bond is issued in a form, and subject to any terms and conditions,
24that the department considers appropriate.
SB55-ASA1-AA1,905,2
1(c) A certificate of deposit or money market certificate, if all of the following
2apply:
SB55-ASA1-AA1,905,43
1. The certificate is issued or endorsed to the department for the benefit of milk
4producers and producer agents.
SB55-ASA1-AA1,905,65
2. The certificate may not be canceled or redeemed without the department's
6written permission.
SB55-ASA1-AA1,905,87
3. No person may transfer or withdraw funds represented by the certificate
8without the department's written permission.
SB55-ASA1-AA1,905,99
4. The certificate renews automatically without any action by the department.
SB55-ASA1-AA1,905,1110
5. The certificate is issued in a form, and subject to any terms and conditions,
11that the department considers appropriate.
SB55-ASA1-AA1,905,1212
(d) An irrevocable bank letter of credit if all of the following apply:
SB55-ASA1-AA1,905,1413
1. The letter of credit is payable to the department for the benefit of milk
14producers or producer agents.
SB55-ASA1-AA1,905,1515
2. The letter of credit is issued on bank letterhead.
SB55-ASA1-AA1,905,1616
3. The letter of credit is issued for an initial period of at least one year.
SB55-ASA1-AA1,905,1917
4. The letter of credit renews automatically unless, at least 90 days before the
18scheduled renewal date, the issuing bank gives the department written notice, in
19person or by certified mail, that the letter of credit will not be renewed.
SB55-ASA1-AA1,905,2120
5. The letter of credit is issued in a form, and subject to any terms and
21conditions, that the department considers appropriate.
SB55-ASA1-AA1,905,2422
(e) Security filed with the department under s. 100.06, 1999 stats., before May
231, 2002, except that on January 1, 2003,
the department shall withdraw its approval
24of any security that is not approvable under pars. (a) to (d).
SB55-ASA1-AA1,906,2
1(f) A dairy plant trusteeship created before May 1, 2002, under s. 100.06, 1999
2stats. This paragraph does not apply after January 1, 2003.
SB55-ASA1-AA1,906,5
3(5) Department custody of security. The department shall hold, in its custody,
4all security filed and maintained under this section. The department shall hold the
5security for the benefit of milk producers and producer agents.
SB55-ASA1-AA1,906,7
6(6) A
dditional security. (a) The department may, at any time, demand
7additional security from a milk contractor if any of the following applies:
SB55-ASA1-AA1,906,118
1. The milk contractor's existing security falls below the amount required
9under sub. (3) for any reason, including depreciation in the value of the security,
10increased obligations to milk producers or producer agents, or the cancellation of any
11security filed with the department.
SB55-ASA1-AA1,906,1312
2. The milk contractor fails to provide required information that is relevant to
13a determination of security requirements.
SB55-ASA1-AA1,906,1814
(b) The department shall issue a demand under par. (a) in writing. The
15department shall indicate why additional security is required, the amount of
16security required, and the deadline date for filing security. The department may not
17specify a deadline for filing security that is more than 30 days after the date on which
18the department issues its demand for security.
SB55-ASA1-AA1,906,2119
(c) A milk contractor may request a hearing, under ch. 227, on a demand for
20security under par. (b). A request for hearing does not automatically stay a security
21demand.
SB55-ASA1-AA1,907,522
(d) If a milk contractor fails to comply with the department's demand for
23security under this subsection, the milk contractor shall give written notice of that
24fact to all milk producers and producer agents from whom the contractor procures
25producer milk in this state. If the milk contractor fails to give accurate notice under
1this paragraph within 5 days after the deadline for filing security under par. (b) has
2passed, the department shall promptly notify milk producers and producer agents
3by publishing a class 3 notice under ch. 985. The department may also give
4individual notice to those milk producers or producer agents of whom the department
5is aware.
SB55-ASA1-AA1,907,76
(e) If a milk contractor fails to comply with the department's demand for
7security under this subsection, the department may do any of the following:
SB55-ASA1-AA1,907,88
1. Issue a summary order under s. 126.85 (2).
SB55-ASA1-AA1,907,99
2. Suspend or revoke the milk contractor's license.
SB55-ASA1-AA1,907,11
10(7) Releasing security. (a) The department may release security filed under
11sub. (1) if any of the following applies:
SB55-ASA1-AA1,907,1612
1. The milk contractor reports not more than $1,500,000 in milk payroll
13obligations under s. 126.41 (6) (a) for at least 2 consecutive years and the milk
14contractor pays the quarterly fund assessment that would have been required of the
15milk contractor if the milk contractor had been a contributing milk contractor on the
16most recent quarterly installment date under s. 126.46 (6).
SB55-ASA1-AA1,907,2117
2. The milk contractor's annual financial statement under s. 126.44 shows
18positive equity for at least 2 consecutive years and the milk contractor pays the
19quarterly fund assessment that would have been required of the milk contractor if
20the milk contractor had been a contributing milk contractor on the most recent
21quarterly installment date under s. 126.46 (6).
SB55-ASA1-AA1,907,2322
(b) On August 1, 2002, the department may release security maintained under
23sub. (2), unless the milk contractor is required to file security under sub. (1).
SB55-ASA1-AA1,907,2524
(c) The department may release security to the extent that the security exceeds
25the amount required under sub. (3).
SB55-ASA1-AA1,908,2
1(d) The department may release security if the milk contractor files alternative
2security, of equivalent value, that the department approves.
SB55-ASA1-AA1,908,43
(e) The department shall release security if the milk contractor has gone out
4of business and paid all milk payroll obligations in full.
SB55-ASA1-AA1,908,12
5126.48 Milk contractors; payments to producers. (1) F
irst monthly
6payment. By the 4th day of each month, a milk contractor shall pay for producer milk
7received during the first 15 days of the preceding month. The milk contractor shall
8base the payment on an estimated price that is at least 80% of the class III price
9published by the regional federal milk market administrator for the month
10preceding the month in which the milk is received, or 80% of the contract price,
11whichever is greater. This subsection does not apply to a qualified producer agent
12who complies with sub. (4).
SB55-ASA1-AA1,908,16
13(2) Second monthly payment. By the 19th day of each month, a milk contractor
14shall pay the balance due for producer milk received during the preceding month.
15This subsection does not apply to a qualified producer agent who complies with sub.
16(4).
SB55-ASA1-AA1,908,20
17(3) P
ayment explanation. The department may, by rule, require a milk
18contractor to provide a milk producer or producer agent with a written explanation
19of each payment under this section. The department may specify the content of the
20explanation, including information related to any of the following:
SB55-ASA1-AA1,908,2121
(a) Milk contractor identification.
SB55-ASA1-AA1,908,2222
(b) Milk producer or producer agent identification.
SB55-ASA1-AA1,908,2424
(d) Volume of milk received.
SB55-ASA1-AA1,908,2525
(e) Grade of milk.
SB55-ASA1-AA1,909,1
1(f) Milk test results.
SB55-ASA1-AA1,909,22
(g) Milk price and adjustments.
SB55-ASA1-AA1,909,33
(h) Gross amount due.