This emergency rule establishes a monitoring and testing program for captive cervids in this state. This rule also regulates imports and movement of captive cervids. DATCP will need additional staff to:
• Investigate and monitor movement of cervids into and around the state of Wisconsin.
• Compile evidence and enforce the rules, as necessary.
• Create and maintain complete files for all captive cervid farms.
• Collect samples for testing, and train individuals to collect samples.
• Create a data management system to track and monitor chronic wasting disease and herd data.
These costs will be ongoing. Only a portion of the costs will be incurred during the temporary duration of the emergency rule. DATCP is proposing a “permanent" rule which will incorporate similar provisions. The short-term annual costs during the term of the emergency rule will be approximately $2,401,504.00. Long-term costs will be much greater, but have not yet been fully analyzed.
Regulatory Flexibility Analysis
The department will prepare a regulatory flexibility analysis on its proposed permanent rule relating to chronic wasting disease in cervids.
Notice of Hearing
Agriculture, Trade and Consumer Protection
(reprinted from April 30, Wis. Adm. Register)
The State of Wisconsin Department of Agriculture, Trade and Consumer Protection announces it will hold a public hearing on an emergency rule relating to milk producer security. The department invites the public to attend and comment on the emergency rule. Following the public hearing, the hearing record will remain open until June 16, 2002 to receive additional written comments.
You may obtain a free copy of this emergency rule by contacting Kevin LeRoy, Division of Trade and Consumer Protection, P.O. Box 8911, Madison WI 53708, or by calling (608) 224-4928. Copies will also be available at the hearing.
Hearing impaired persons may request an interpreter for this hearing. Please make reservations for a hearing interpreter by May 9, 2002 either by writing to Kevin LeRoy, Division of Trade and Consumer Protection, PO Box 8911, Madison, WI 53708-8911 (telephone 608-224-4928) or by calling the Department TDD at 224-5058.
The hearing is scheduled at:
Thursday, May 16, 1:30 p.m.
Wisconsin Department of Agriculture, Trade and Consumer Protection
Board Room
2811 Agriculture Drive
Madison, WI 53718
Handicapped accessible
Analysis Prepared by the Department of Agriculture, Trade and Consumer Protection
Statutes Interpreted: Ch.
126, Stats.
This emergency rule implements Wisconsin's new agricultural producer security law (ch.
126, Stats.), as it applies to milk contractors. The new law is designed to protect milk producers against catastrophic financial defaults by milk contractors who procure producer milk in this state. The Legislature enacted the new law in
2001 Wis. Act 16.
The new law applies to milk contractors, including dairy plant operators, producer agents and other milk handlers. Among other things, the new law creates an agricultural producer security fund, financed by milk contractor fees. The Department of Agriculture, Trade and Consumer Protection (DATCP) administers this law. The law takes effect, for milk contractors, on May 1, 2002.
This emergency rule:
• Clarifies the treatment of dairy plant operators who provide custom processing services for milk producers, without marketing or taking title to milk or processed dairy products.
• Clarifies the treatment of producer agents who market milk and collect milk payments on behalf of producers, without taking title to the milk.
• Clarifies the treatment of persons who market only processed dairy products for producers, without procuring, marketing or processing any raw producer milk.
• Clarifies the method by which milk contractors calculate and report milk payment obligations, for the purpose of calculating fund assessments and security requirements.
• Requires milk contractors to disclose their security and fund contribution status to producers.
Background
Under the agricultural producer security law, a milk contractor who procures producer milk in this state must be licensed by DATCP. To be licensed, a contractor must do one of the following:
• Contribute to the agricultural producer security fund (“fund"). If a contributing milk contractor defaults on payments to producers, the fund may partially compensate those producers. Producer agents (who market milk and collect milk payments for producers without taking title to the milk) may have lower fund participation requirements than other milk contractors. If a producer agent defaults, the fund may also make smaller payments to producers.
• File security with DATCP, to secure a portion of the contractor's milk payment obligations to producers. Producer agents may file a smaller amount of security than other milk contractors, so there may be less security if a producer agent defaults.
• File financial statements with DATCP, showing that the milk contractor meets minimum financial standards. If a milk contractor is licensed on the basis of the contractor's financial statement, the contractor is not required to contribute to the fund or file security with DATCP. The fund will not pay producers if the contractor defaults, nor will DATCP have any security to pay producers.
Custom Processing for Milk Producers
This emergency rule clarifies that ch.
126, Stats., does not apply to a dairy plant operator who takes temporary custody of producer milk for the sole purpose of providing custom processing services to milk producers, provided that all the following apply:
• The producers retain title to the milk and to the processed dairy products made from that milk.
• The operator does not market the milk or processed dairy products, but promptly delivers the processed dairy products to the producers or their agent for consumption or marketing.
• The operator does not commingle producer-owned milk or dairy products with other milk or dairy products.
• The operator provides the custom processing services under a written contract with each producer or the producer's agent. The contract must clearly and conspicuously disclose that:
- The producer retains title to the milk and dairy products.
- The producer's milk shipments are not secured under ch.
126, Stats.
Producer Agents
This emergency rule clarifies that a milk contractor does not qualify as a producer agent, for purposes of ch.
126, Stats., unless all the following apply:
• The milk contractor procures producer milk in this state solely as the agent of the milk producers.
• The milk contractor does not take title to the producer milk, or to any dairy products made from the producer milk.
• The milk contractor markets the producer milk under a written contract with each milk producer. The contract must clearly and conspicuously disclose all the following:
- That the milk contractor does not take title to the producer's milk, or any dairy products made from that milk.
- That the milk contractor receives payments on behalf of the producer, and holds them in trust for the producer.
- The terms and conditions of payment to the producer.
- The procedure by which the milk contractor will receive payment on behalf of the producer and make payments to the producer, including any trust fund arrangement.
- The milk contractor's compensation for serving as the producer's agent, and the method by which the milk contractor will receive that compensation from the milk producer.
- A milk security disclosure statement (see below).
• The milk contractor does not process, as a producer agent, more than 5 million pounds of producer milk in any month.
• The milk contractor gives, to each recipient of producer milk marketed by the contractor, a written invoice stating that the milk is producer milk not owned by the milk contractor.
• The milk contractor files a monthly report with DATCP. The milk contractor must file the report on or before the 25th day of the month. The report must include all the following:
- The name and address of each person to whom the milk contractor marketed, in the preceding month, producer milk procured in this state.
- The total pounds of producer milk that the milk contractor marketed to each person in the preceding month.
- The milk contractor's total milk payment obligation to milk producers for producer milk that the contractor marketed in the preceding month.
Persons Marketing Processed Dairy Products for Milk Producers
This emergency rule clarifies that ch.
126, Stats., does not apply to a person who markets only processed dairy products for milk producers, provided that the person does not procure, market or process any raw producer milk.
Milk Payment Report by License Applicant
Under the new law, an applicant for an annual milk contractor license must report (1) the applicant's total annual payment obligation to milk producers, and (2) the largest obligation incurred at any time during the applicant's last fiscal year. The reported amounts are used to determine fund assessments and security requirements, if any. This rule clarifies that the applicant must report (1) the total amount paid for milk procured during the applicant's last fiscal year, and (2) the largest amount paid for milk procured in any single month during the last fiscal year.
Milk Security Disclosure Statement
This emergency rule requires milk contractors to make milk security disclosures to milk producers, pursuant to s.
126.81 (4), Stats., so that producers understand the extent to which milk payments are backed by the agricultural producer security program. The milk contractor must give the disclosure when the milk contractor first procures milk from the producer, and again in June of each year. The disclosure must consist of one of the following written statements:
• The following statement if the milk contractor contributes to the fund (and is not a producer agent who also files security):
IMPORTANT NOTICE
[Name of milk contractor] contributes to Wisconsin's Agricultural Producer Security Fund. This fund helps ensure that milk producers will be paid for the milk they ship to contributing contractors. If a contributing contractor fails to pay a producer, the fund may pay up to 80% of the first $60,000 of the producer's unpaid milk payment claim, and up to 75% of any additional unpaid milk payroll claim.
• The following statement if the milk contractor is required to file security with DATCP and is not a producer agent:
IMPORTANT NOTICE
[Name of milk contractor] does not participate in Wisconsin's Agricultural Producer Security Fund. We have filed security with the State of Wisconsin to cover part, but not all, of our milk payment obligations to milk producers. The security equals at least 75% of the largest amount that we owed producers at any time during our last completed fiscal year. The security is in the following form(s): [specify forms of security].
• The following statement if the milk contractor does not contribute to the fund or file security with DATCP, but is licensed solely on the basis of the contractor's financial statement:
IMPORTANT NOTICE
[Name of milk contractor] does not participate in Wisconsin's Agricultural Producer Security Fund, and has not filed security with the State of Wisconsin to secure payments to milk producers. Our financial statement shows positive equity, a current ratio of at least 1.25 to 1.0, and a debt-to-equity ratio of no more than 2.0 to 1.0.
• The following statement if the milk contractor is a producer agent who does not contribute to the fund and is required to file security with DATCP:
IMPORTANT NOTICE
[Name of milk contractor] does not participate in Wisconsin's Agricultural Producer Security Fund. We have filed security with the State of Wisconsin to cover part, but not all, of our milk payment obligations to milk producers. The security equals 15% of the largest amount that we owed to producers at any time during our last completed fiscal year. The security is in the following form(s): [specify forms of security].
• The following statement if the milk contractor is a producer agent who contributes to the fund and files security with DATCP:
IMPORTANT NOTICE
[Name of milk contractor] contributes to Wisconsin's Agricultural Producer Security Fund as a producer agent. If we fail to pay a producer, the fund may pay up to 15% of the producer's allowed claim.
Fiscal Estimate
The department does not expect this emergency rule to have any material fiscal effect.
Regulatory Flexibility Analysis
The department will prepare and publish its proposed regulatory flexibility analysis permanent rule to create ch.
ATCP 96, Wis. Adm. Code.
Notice of Hearing
Agriculture, Trade and Consumer Protection
[
CR 02-054]
