AB698: Bill Text

AB698,23 Section 23. 126.41 (2) (f) of the statutes is repealed.

AB698,24 Section 24. 126.41 (6) (intro.) of the statutes is amended to read:

AB698,9,19 126.41 (6) Sworn and notarized Applicant statement. (intro.) 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:

AB698,25 Section 25. 126.41 (6) (ag) of the statutes is created to read:

AB698,9,22 126.41 (6) (ag) The amount of payments under par. (a) made under deferred payment contracts.

AB698,26 Section 26. 126.41 (6) (ar) of the statutes is created to read:

AB698,10,3 126.41 (6) (ar) Whether the applicant has had any obligations under deferred payment contracts, for milk procured in this state, at any time since the beginning of the applicant's last completed fiscal year.

AB698,27 Section 27. 126.41 (6) (br) 4. of the statutes is created to read:

AB698,10,6 126.41 (6) (br) 4. The amount of payments under subd. 3. made under deferred payment contracts.

AB698,28 Section 28. 126.41 (9) (intro.) of the statutes is renumbered 126.47 (5m) (intro.) and amended to read:

AB698,10,11 126.47 (5m) (intro.) A milk contractor who files and maintains is required to file or maintain security under s. 126.47 this section shall provide a monthly report to the department containing either all of the following:

AB698,29 Section 29. 126.41 (9) (a) of the statutes is renumbered 126.47 (5m) (b) 1.

AB698,30 Section 30. 126.41 (9) (b) of the statutes is renumbered 126.47 (5m) (b) 2.

AB698,31 Section 31. 126.44 (1) (a) of the statutes is renumbered 126.44 (1) (a) (intro.) and amended to read:

AB698,10,20 126.44 (1) (a) (intro.) 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 150,000 hundredweight of milk under s. 126.41 (6) (bg). if the milk contractor's license application shows any of the following:

AB698,32 Section 32. 126.44 (1) (a) 1. of the statutes is created to read:

AB698,10,23 126.44 (1) (a) 1. That the amount of producer milk reported under s. 126.41 (6) (bg) exceeds 150,000 hundredweight.

AB698,33 Section 33. 126.44 (1) (a) 2. of the statutes is created to read:

AB698,11,3 126.44 (1) (a) 2. Any deferred payment contract obligations under s. 126.41 (6) (ar) to a milk producer or producer agent that has not, under s. 126.70 (1) (b), permanently waived eligibility to file a default claim against the milk contractor.

AB698,34 Section 34. 126.44 (1) (b) of the statutes is renumbered 126.44 (1) (b) (intro.) and amended to read:

AB698,11,9 126.44 (1) (b) (intro.) Except as provided in par. (c) or (d), a milk contractor licensed under s. 126.41 (1) shall file an annual financial statement with the department during each license year. The if the milk contractor's license application for that year shows any of the following:

AB698,11,14 (cm) A milk contractor shall file the an annual financial statement under par. (b) 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.

AB698,35 Section 35. 126.44 (1) (b) 1. of the statutes is created to read:

AB698,11,18 126.44 (1) (b) 1. That the amount of producer milk reported under s. 126.41 (6) (bg) exceeds 150,000 hundredweight and the milk contractor is not a contributing milk contractor who procures milk in this state solely as a producer agent.

AB698,36 Section 36. 126.44 (1) (b) 2. of the statutes is created to read:

AB698,11,22 126.44 (1) (b) 2. Any deferred payment contract obligations under s. 126.41 (6) (ar) to a milk producer or producer agent that has not, under s. 126.70 (1) (b), permanently waived eligibility to file a default claim against the milk contractor.

AB698,37 Section 37. 126.44 (1) (c) of the statutes is repealed.

AB698,38 Section 38. 126.44 (1) (d) of the statutes is amended to read:

AB698,12,9 126.44 (1) (d) Rather than filing an annual financial statement under par. (b), a milk contractor who is disqualified under s. 126.45 (3) (a) may file, during each fiscal year, a compilation of financial information that is satisfactory to the department along with the milk contractor's sworn and notarized statement that the financial information is correct. The milk contractor shall file the financial information 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 an accountant preparing the financial information, files a written extension request at least 10 days before the filing deadline.

AB698,39 Section 39. 126.44 (1) (e) of the statutes is created to read:

AB698,12,14 126.44 (1) (e) 1. Except as provided in subd. 2., a milk contractor licensed under s. 126.41 may not incur any obligations under a deferred payment contract for milk procured in this state unless the contractor first notifies the department and files an annual financial statement with the department.

AB698,12,19 2. A milk contractor licensed under s. 126.41 is not required to notify the department or file an annual financial statement with the department under subd. 1. for an obligation incurred under a deferred payment contract, for milk procured in this state, with a milk producer or producer agent that has, under s. 126.70 (1) (b), permanently waived eligibility to file a default claim against the milk contractor.

AB698,40 Section 40. 126.44 (3) of the statutes is amended to read:

AB698,13,3 126.44 (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.

AB698,41 Section 41. 126.44 (6m) of the statutes is amended to read:

AB698,13,10 126.44 (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.

AB698,42 Section 42. 126.46 (1) of the statutes is amended to read:

AB698,13,15 126.46 (1) General. A contributing milk contractor shall pay an annual fund assessment for each license year, including an assessment for deferred payment contracts entered into under s. 126.485, in the amount specified by the department by rule.

AB698,43 Section 43. 126.46 (5m) (a) (intro.) of the statutes is renumbered 126.46 (5m) (a) and amended to read:

AB698,13,20 126.46 (5m) (a) Divide the amount of security that the milk contractor is required to file under s. 126.47 (3) (b) by 75 percent of the following: the amount of the milk contractor's estimated default exposure.

AB698,44 Section 44. 126.46 (5m) (a) 1. of the statutes is repealed.

AB698,45 Section 45. 126.46 (5m) (a) 2. of the statutes is repealed.

AB698,46 Section 46. 126.47 (1) (ae) of the statutes is created to read:

AB698,14,6 126.47 (1) (ae) A milk contractor who reports any deferred payment contract obligations under s. 126.41 (6) (ar) or 126.44 (1) (e) 1., other than deferred payment contract obligations to a milk producer or producer agent that has, under s. 126.70 (1) (b), permanently waived eligibility to file a default claim against the milk contractor, shall file security with the department, and maintain that security until the department releases it under sub. (7) (ae), unless the milk contractor's annual financial statement under s. 126.44 (1) shows that the milk contractor has positive equity and a debt to equity ratio of not more than 4.0 to 1.0.

AB698,47 Section 47. 126.47 (1) (b) 1. (intro.) of the statutes is renumbered 126.40 (7e) (intro.) and amended to read:

AB698,14,10 126.40 (7e) (intro.) In this paragraph, “ estimated “Estimated default exposure" means 75 percent the sum of the following:

AB698,48 Section 48. 126.47 (1) (b) 1. a. of the statutes is renumbered 126.40 (7e) (a) 1. and amended to read:

AB698,14,16 126.40 (7e) (a) 1. If the milk contractor reports unpaid milk payroll obligations under s. ss. 126.41 (6) (b) 1. and (9) (a) 126.47 (5m) (b) 1., the highest amount of unpaid milk payroll obligations, reported under s. 126.41 (6) (b) 1. or (9) (a) 126.47 (5m) (b) 1., that the milk contractor had at any time during the last 12 months.

AB698,49 Section 49. 126.47 (1) (b) 1. b. of the statutes is renumbered 126.40 (7e) (a) 2. and amended to read:

AB698,14,22 126.40 (7e) (a) 2. If the milk contractor reports monthly milk payroll obligations under s. ss. 126.41 (6) (b) 2. and (9) (b) 126.47 (5m) (b) 2., the highest amount of milk payroll obligations, reported under s. 126.41 (6) (b) 2. or (9) (b) 126.47 (5m) (b) 2., that the milk contractor incurred in any month during the last 12 months.

AB698,50 Section 50. 126.47 (1) (b) 2. of the statutes is renumbered 126.47 (1) (b).

AB698,51 Section 51. 126.47 (3) (a) (intro.) of the statutes is renumbered 126.47 (3) (a) and amended to read:

AB698,15,4 126.47 (3) (a) Except as provided in par. (b), a A milk contractor who is required to file or maintain security under sub. (1) (a) shall at all times maintain security in an amount at least equal to at least 75 percent of the following: the milk contractor's estimated default exposure.

AB698,52 Section 52. 126.47 (3) (a) 1. of the statutes is repealed.

AB698,53 Section 53. 126.47 (3) (a) 2. of the statutes is repealed.

AB698,54 Section 54. 126.47 (3) (ae) of the statutes is created to read:

AB698,15,15 126.47 (3) (ae) A milk contractor who is required to file or maintain security under sub. (1) (ae) shall at all times maintain security that is at least equal to the milk contractor's highest total, at any time during the preceding 12 months, of unpaid obligations for producer milk procured in this state under a deferred payment contract, excluding any unpaid obligation under a deferred payment contract, for milk procured in this state, with a milk producer or producer agent that has, under s. 126.70 (1) (b), permanently waived eligibility to file a default claim against the milk contractor.

AB698,55 Section 55. 126.47 (3) (b) of the statutes is amended to read:

AB698,15,19 126.47 (3) (b) A milk contractor who is required to file or maintain security only under sub. (1) (b) shall at all times maintain security at least equal to the milk contractor's estimated default exposure, as defined in sub. (1) (b) 1., less $20,000,000.

AB698,56 Section 56. 126.47 (3) (c) of the statutes is created to read:

AB698,15,24 126.47 (3) (c) If more than one of pars. (a) to (b) applies to a milk contractor, the milk contractor shall at all times maintain security at least equal to the greatest amount of security that the milk contractor is required to maintain under any one of pars. (a) to (b).

AB698,57 Section 57. 126.47 (5m) (title) of the statutes is created to read:

AB698,16,1 126.47 (5m) (title) Monthly reports.

AB698,58 Section 58. 126.47 (5m) (a) of the statutes is created to read:

AB698,16,8 126.47 (5m) (a) The milk contractor's total unpaid obligations at the end of the previous month for producer milk procured in this state under a deferred payment contract, excluding any unpaid obligation under a deferred payment contract, for milk procured in this state, with a milk producer or producer agent that has, under s. 126.70 (1) (b), permanently waived eligibility to file a default claim against the milk contractor.

AB698,59 Section 59. 126.47 (5m) (b) (intro.) of the statutes is created to read:

AB698,16,10 126.47 (5m) (b) (intro.) Either of the following:

AB698,60 Section 60. 126.47 (7) (a) (intro.) of the statutes is amended to read:

AB698,16,14 126.47 (7) (a) (intro.) The department may release security filed under sub. (1) (a), except for any amount of security that the milk contractor is required to file under sub. (1) (ae) or (b), if any of the following applies:

AB698,61 Section 61. 126.47 (7) (ae) of the statutes is created to read:

AB698,16,18 126.47 (7) (ae) The department may release security filed under sub. (1) (ae), except for any amount of security that the milk contractor is required to file under sub. (1) (a) or (b), if any of the following applies:

AB698,16,20 1. The milk contractor has not had any deferred payment contract obligations since the beginning of the milk contractor's last completed fiscal year.

AB698,16,23 2. The milk contractor files 2 consecutive annual financial statements under s. 126.44 showing that the milk contractor meets the applicable equity requirement and debt to equity ratio under sub. (1) (ae).

AB698,62 Section 62. 126.47 (7) (am) of the statutes is amended to read:

AB698,17,6 126.47 (7) (am) The department may release security filed under sub. (1) (b), except for any amount of security that the milk contractor is required to file because sub. (1) (a) or (ae) applies to the milk contractor, if the milk contractor files 2 consecutive annual financial statements under s. 126.44 showing that the milk 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 2.0 to 1.0.

AB698,63 Section 63. 126.48 (1) of the statutes is amended to read:

AB698,17,14 126.48 (1) First monthly payment. By Except as provided under the terms of a deferred payment contract that satisfies the requirements under s. 126.485, by the 4th day of each month, a milk contractor shall pay for producer milk received during the first 15 days of the preceding month. The milk contractor shall base the payment on an estimated price that is at least 80 percent of the class III price published by the regional federal milk market administrator for the month preceding the month in which the milk is received, or 80 percent of the contract price, whichever is greater.

AB698,64 Section 64. 126.48 (2) of the statutes is amended to read:

AB698,17,19 126.48 (2) Second monthly payment. By Except as provided under the terms of a deferred payment contract that satisfies the requirements under s. 126.485, by the 19th day of each month, a milk contractor shall pay the balance due for producer milk received during the preceding month.

AB698,65 Section 65. 126.48 (3) of the statutes is renumbered 126.487, and 126.487 (intro.), as renumbered, is amended to read:

AB698,18,2 126.487 Payment explanation. (intro.) The department may, by rule, require a milk contractor to provide a milk producer or producer agent with a written explanation of each payment under this section s. 126.48 or of each deferred payment under s. 126.485. The department may specify the content of the explanation, including information related to any of the following:

AB698,66 Section 66. 126.485 of the statutes is created to read:

AB698,18,8 126.485 Milk contractors; deferred payment contracts. (1) Contract in writing. A milk contractor may not procure milk from any milk producer or producer agent under a deferred payment contract before the contract is reduced to writing and signed by the parties. The milk contractor shall provide a copy of the signed contract to the other party.

AB698,18,10 (2) Contents of contract. A milk contractor may not enter into a deferred payment contract unless the deferred payment contract includes all of the following:

AB698,18,11 (a) A unique contract identification number.

AB698,18,13 (b) The specific payments required under s. 126.48 (1) or (2), or portion thereof, that are deferred under the contract.

AB698,18,15 (c) The date by which the milk contractor agrees to make full payment for the milk.

AB698,18,16 (d) The milk contractor's permanent business location.

AB698,18,21 (e) A statement in clear and conspicuous print immediately above the contract signature line stating: “The milk contractor (buyer) becomes the owner of any milk that the producer or producer agent (seller) delivers to the milk contractor under this contract. The producer or producer agent relinquishes ownership and control of the milk, and may become an unsecured creditor pending payment.”