DATCP and the Agricultural Producer Security Council have identified the need to evaluate the entire agricultural producer security program, so that changes can be made to mitigate the impact of large defaults in the future. In December 2015, DATCP received the completed actuarial study and is developing recommendations for permanent changes to the agricultural producer security program based on the findings in the actuarial study.
The proposed emergency rule would alleviate a financial burden otherwise placed upon licensed milk contractors during this transitional period. Without this change, milk contractors would not be eligible for fund assessment exemption until permanent changes to the agricultural producer security program are implemented.
Policy Alternatives
Do nothing. If DATCP fails to adopt this emergency rule the milk contractor industry will not be eligible for fund assessment exemption until the producer security overall fund balance exceeds $11 million. License years for milk contractors begin May 1. If DATCP fails to adopt this emergency rule before May 1, 2016, no milk contractors will be eligible for exemption during the next license year.
4. Statutory authority for the rule (including the statutory citation and language):
Wis. Stat. § 93.07 (1), directs DATCP to make such regulations as are necessary for the discharge of all the powers and duties of the department. Wis. Stat. § 126.46 (1), directs DATCP to establish by rule annual fund assessments for milk contractors. Wis. Stat. § 126.81 (1) (a), allows DATCP to promulgate rules to interpret and implement Wis. Stat. ch. 126. Wis. Stat. § 227.24, allows DATCP to promulgate a rule as an emergency rule without complying with the notice, hearing and publication requirements under Wis. Stat. ch. 227. 5. Estimate of the amount of time that state employees will spend to develop the rule and of other resources necessary to develop the rule:
DATCP estimates that it will use approximately 0.10 FTE staff to develop this rule. This includes time required for the investigation and analysis, financial assistance criteria, rule drafting, preparing related documents, and communicating with affected persons and groups. DATCP will use existing staff to develop this rule.
6. Description of all entities that may be impacted by the rule:
The proposed rule will allow milk contractors who meet fund assessment exemption requirements under Wis. Admin. Code §§ ATCP 100.135 (10) (a) and (b), to not pay fund assessments if the producer security overall fund balance is at least $5 million on February 28 of the preceding license year. The milk contractor industry would otherwise be required to pay an estimated $420,000 - $800,000 annually, until the overall fund balance reaches a minimum balance of $11 million. Milk, grain, and vegetable producers could potentially be impacted by the overall lower APSF balance, in the event of future large defaults.
7. Summary and preliminary comparison of any existing or proposed federal regulation that is intended to address the activities to be regulated by the rule:
There is no existing or proposed federal regulation that is intended to address the activities regulated by this rule.
8. Anticipated economic impact
The proposed rule will slow the growth of the overall fund balance, as the milk contractor industry would otherwise be required to pay an additional $420,000 - $800,000 annually. The impact to milk, grain, and vegetable producers will be minimal if there are no large defaults during the next 6-7 years.
Contact Person: David A. Woldseth, DATCP; Phone (608) 224-5164
