Justification for proposed rule.
Act 155, signed by the Governor on March 28, 2018, allows milk contractors to enter into contracts with producers to defer payment for up to 120 days. The Act requires the provision of financial statements, and, in some instances, individual security, to cover the additional risk arising under such deferred payment contracts. As the Fund could ultimately be responsible for defaults under this type of contract, the Act also creates milk contractor deferred payment assessments and requires DATCP to establish a milk contractor deferred payment assessment rate by emergency rule that may remain in effect for up to 24 months while permanent rules are being developed.
Policy Alternatives.
There are no alternatives. Act 155 requires DATCP to promulgate rulemaking to establish annual assessment rate for milk contractors entering into deferred payment contracts.
4. Statutory authority for the rule (including the statutory citation and language):
Wis. Stat. § 25.463 creates the Wisconsin Agricultural Producer Security Trust Fund. 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. § 126.81 (2m) requires DATCP to promulgate rules that specify fund assessments under s. 126.46(1), Stats. 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, which 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:
Milk contractors and milk producers who choose to enter into deferred payment contracts will be impacted by paying the additional deferred payment assessment. Grain and vegetable producers are also protected against financial defaults by contractors who contribute to the one overall Fund. All could potentially benefit by a higher agricultural producer security fund balance as a result of the additional deferred payment assessment.
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 increase the growth of the overall Fund balance, as the milk industry begins paying deferred payment assessments. The impact to milk, grain, and vegetable producers will include greater coverage in the event of a default.
Contact Person: David A. Woldseth, Program and Policy Analyst, Division of Trade and Consumer Protection, DATCP; Phone (608) 224-5164.
