Amendment CA1-SSA1-SB55

SB55-SSA1-CA1,618,16 4. Failure to reimburse a bond surety, within 60 days after the bond surety issues a reimbursement demand under s. 126.73 (2), for the full amount that the surety pays to the department under s. 126.72 (2) or (3) for the benefit of claimants affected by that milk contractor's default.

SB55-SSA1-CA1,618,21 (4) Effect of disqualification. (a) A milk contractor disqualified under sub. (3) (c) may not engage in any activities for which a license is required under s. 126.41 (1) (a) if the milk contractor files an annual, quarterly, or interim financial statement under s. 126.44 that shows a current ratio of less than 1.25 to 1.0, a debt to equity ratio of more than 2.0 to 1.0, or negative equity.

SB55-SSA1-CA1,618,23 (b) The department may not return, to a disqualified milk contractor, any fund assessments that the milk contractor paid as a contributing milk contractor.

SB55-SSA1-CA1,619,2 (c) A disqualified milk contractor remains liable for any unpaid fund installment under s. 126.46 that became due while the milk contractor was a contributing milk contractor. A disqualified milk contractor is not liable for any fund installment that becomes due after the milk contractor is disqualified under sub. (3).

SB55-SSA1-CA1,619,6 126.46 Contributing milk contractors; fund assessments. (1) General. A contributing milk contractor shall pay an annual fund assessment for each license year. The assessment equals $20 or the sum of the following, whichever is greater, unless the department by rule specifies a different assessment:

SB55-SSA1-CA1,619,10 (a) The milk contractor's current ratio assessment. The current ratio assessment for a license year equals the milk contractor's current ratio assessment rate under sub. (2) multiplied by the annual milk payroll obligations reported under s. 126.41 (6) (a) in the milk contractor's license application for that license year.

SB55-SSA1-CA1,619,15 (b) The milk contractor's debt to equity ratio assessment. The debt to equity ratio assessment for a license year equals the milk contractor's debt to equity ratio assessment rate under sub. (4) multiplied by the annual milk payroll obligations reported under s. 126.41 (6) (a) in the milk contractor's license application for that license year.

SB55-SSA1-CA1,619,17 (2) Current ratio assessment rate. A milk contractor's current ratio assessment rate is calculated, at the beginning of the license year, as follows:

SB55-SSA1-CA1,619,21 (a) If the milk contractor has filed an annual financial statement under s. 126.44 and that financial statement shows a current ratio of at least 1.25 to 1.0, the milk contractor's current ratio assessment rate equals the greater of zero or the current ratio assessment factor in sub. (3) (a) multiplied by the following amount:

SB55-SSA1-CA1,619,22 1. Subtract 3 from the current ratio.

SB55-SSA1-CA1,619,23 2. Divide the amount determined under subd. 1. by 6.

SB55-SSA1-CA1,619,24 3. Multiply the amount determined under subd. 2. by negative one.

SB55-SSA1-CA1,619,25 4. Raise the amount determined under subd. 3. to the 3rd power.

SB55-SSA1-CA1,620,1 5. Divide 0.55 by the current ratio.

SB55-SSA1-CA1,620,2 6. Raise the amount determined under subd. 5. to the 7th power.

SB55-SSA1-CA1,620,4 7. Add the amount determined under subd. 4. to the amount determined under subd. 6.

SB55-SSA1-CA1,620,5 8. Add 0.075 to the amount determined under subd. 7.

SB55-SSA1-CA1,620,9 (b) If the milk contractor has filed an annual financial statement under s. 126.44 and that financial statement shows a current ratio of less than 1.25 to 1.0, but greater than 1.05 to 1.0, the milk contractor's current ratio assessment rate equals the current ratio assessment factor in sub. (3) (b) multiplied by the following amount:

SB55-SSA1-CA1,620,10 1. Subtract 3 from the current ratio.

SB55-SSA1-CA1,620,11 2. Divide the amount determined under subd. 1. by 6.

SB55-SSA1-CA1,620,12 3. Multiply the amount determined under subd. 2. by negative one.

SB55-SSA1-CA1,620,13 4. Raise the amount determined under subd. 3. to the 3rd power.

SB55-SSA1-CA1,620,14 5. Divide 0.55 by the current ratio.

SB55-SSA1-CA1,620,15 6. Raise the amount determined under subd. 5. to the 7th power.

SB55-SSA1-CA1,620,17 7. Add the amount determined under subd. 4. to the amount determined under subd. 6.

SB55-SSA1-CA1,620,18 8. Add 0.075 to the amount determined under subd. 7.

SB55-SSA1-CA1,620,22 (c) If the milk contractor has filed an annual financial statement under s. 126.44 and that financial statement shows a current ratio of less than or equal to 1.05 to 1.0, the milk contractor's current ratio assessment rate equals the current ratio assessment factor in sub. (3) (b) multiplied by 0.1201478.

SB55-SSA1-CA1,620,25 (d) Except as provided in par. (e), if the milk contractor has not filed an annual financial statement under s. 126.44, the milk contractor's current ratio assessment rate equals the current ratio assessment factor in sub. (3) (b) multiplied by 0.103005.

SB55-SSA1-CA1,621,6 (e) If the milk contractor has not filed an annual financial statement under s. 126.44 and the milk contractor procures producer milk in this state solely as a producer agent, the milk contractor's current ratio assessment rate is 0.00025, except that, for the milk contractor's 5th or higher consecutive full license year of participation in the fund, the milk contractor's current ratio assessment rate is 0.000175.

SB55-SSA1-CA1,621,8 (3) Current ratio assessment factor. (a) A milk contractor's current ratio assessment factor under sub. (2) (a) is 0.001, except as follows:

SB55-SSA1-CA1,621,10 1. For the milk contractor's 3rd consecutive full license year as a contributing milk contractor, the milk contractor's current ratio assessment factor is 0.0007.

SB55-SSA1-CA1,621,12 2. For the milk contractor's 4th consecutive full license year as a contributing milk contractor, the milk contractor's current ratio assessment factor is 0.0003.

SB55-SSA1-CA1,621,15 3. For the milk contractor's 5th or higher consecutive full license year as a contributing milk contractor, the milk contractor's current ratio assessment factor is zero.

SB55-SSA1-CA1,621,19 (b) A milk contractor's current ratio assessment factor under sub. (2) (b) to (d) is 0.0015, except that, for the milk contractor's 5th or higher consecutive full license year of participation in the fund, the milk contractor's current ratio assessment factor is 0.000675.

SB55-SSA1-CA1,621,21 (4) Debt to equity ratio assessment rate. A milk contractor's debt to equity ratio assessment rate is calculated, at the beginning of the license year, as follows:

SB55-SSA1-CA1,622,2 (a) If the milk contractor has filed an annual financial statement under s. 126.44 and that financial statement shows positive equity and a debt to equity ratio of not more than 2.0 to 1.0, the milk contractor's debt to equity ratio assessment rate equals the greater of zero or the debt to equity ratio assessment factor in sub. (5) (a) multiplied by the following amount:

SB55-SSA1-CA1,622,3 1. Subtract 2 from the debt to equity ratio.

SB55-SSA1-CA1,622,4 2. Divide the amount determined under subd. 1. by 3.

SB55-SSA1-CA1,622,5 3. Raise the amount determined under subd. 2. to the 9th power.

SB55-SSA1-CA1,622,6 4. Divide the debt to equity ratio by 3.25.

SB55-SSA1-CA1,622,7 5. Raise the amount determined under subd. 4. to the 5th power.

SB55-SSA1-CA1,622,9 6. Add the amount determined under subd. 3. to the amount determined under subd. 5.

SB55-SSA1-CA1,622,10 7. Add 0.025 to the amount determined under subd. 6.

SB55-SSA1-CA1,622,15 (b) If the milk contractor files an annual financial statement under s. 126.44 and that financial statement shows a debt to equity ratio of greater than 2.0 to 1.0 but less than 3.1 to 1.0, the milk contractor's debt to equity ratio assessment rate equals the debt to equity ratio assessment factor in sub. (5) (b) multiplied by the following amount:

SB55-SSA1-CA1,622,16 1. Subtract 2 from the debt to equity ratio.

SB55-SSA1-CA1,622,17 2. Divide the amount determined under subd. 1. by 3.

SB55-SSA1-CA1,622,18 3. Raise the amount determined under subd. 2. to the 9th power.

SB55-SSA1-CA1,622,19 4. Divide the debt to equity ratio by 3.25.

SB55-SSA1-CA1,622,20 5. Raise the amount determined under subd. 4. to the 5th power.

SB55-SSA1-CA1,622,22 6. Add the amount determined under subd. 3. to the amount determined under subd. 5.

SB55-SSA1-CA1,622,23 7. Add 0.025 to the amount determined under subd. 6.

SB55-SSA1-CA1,623,2 (c) If the milk contractor has filed an annual financial statement under s. 126.44 and that financial statement shows negative equity or a debt to equity ratio of at least 3.1 to 1.0, the milk contractor's debt to equity ratio assessment rate equals the debt to equity ratio assessment factor in sub. (5) (b) multiplied by 0.8146917.

SB55-SSA1-CA1,623,6 (d) Except as provided in par. (e), if the milk contractor has not filed an annual financial statement under s. 126.44, the milk contractor's debt to equity ratio assessment rate equals the debt to equity ratio assessment factor in sub. (5) (b) multiplied by 0.11325375.

SB55-SSA1-CA1,623,12 (e) If the milk contractor has not filed an annual financial statement under s. 126.44 and the milk contractor procures producer milk in this state solely as a producer agent, the milk contractor's debt to equity ratio assessment rate is 0.00025, except that, for the milk contractor's 5th or higher consecutive full license year of participation in the fund, the milk contractor's debt to equity ratio assessment rate is 0.000175.

SB55-SSA1-CA1,623,14 (5) Debt to equity ratio assessment factor. (a) A milk contractor's debt to equity ratio assessment factor under sub. (4) (a) is 0.0015, except as follows:

SB55-SSA1-CA1,623,16 1. For the milk contractor's 3rd consecutive full license year as a contributing milk contractor, the milk contractor's current ratio assessment factor is 0.001.

SB55-SSA1-CA1,623,18 2. For the milk contractor's 4th consecutive full license year as a contributing milk contractor, the milk contractor's current ratio assessment factor is 0.0005.

SB55-SSA1-CA1,623,21 3. For the milk contractor's 5th or higher consecutive full license year as a contributing milk contractor, the milk contractor's current ratio assessment factor is zero.

SB55-SSA1-CA1,623,25 (b) A milk contractor's debt to equity ratio assessment factor under sub. (4) (b) to (d) is 0.00225, except that, for the milk contractor's 5th or higher consecutive full license year as a contributing milk contractor, the milk contractor's debt to equity ratio assessment factor is 0.001.

SB55-SSA1-CA1,624,3 (6) Quarterly installments. (a) A contributing milk contractor shall pay the milk contractor's annual fund assessment in equal quarterly installments that are due as follows:

SB55-SSA1-CA1,624,4 1. The first installment is due on June 1 of the license year.

SB55-SSA1-CA1,624,5 2. The 2nd installment is due on September 1 of the license year.

SB55-SSA1-CA1,624,6 3. The 3rd installment is due on December 1 of the license year.

SB55-SSA1-CA1,624,7 4. The 4th installment is due on March 1 of the license year.

SB55-SSA1-CA1,624,9 (b) A contributing milk contractor may prepay any of the quarterly installments under par. (a).

SB55-SSA1-CA1,624,14 (c) A contributing milk contractor who applies for an annual license after the beginning of a license year shall pay the full annual fund assessment required under this section. The milk contractor shall pay, with the first quarterly installment that becomes due after the day on which the department issues the license, all of the quarterly installments for that license year that were due before that day.

SB55-SSA1-CA1,624,18 (d) If s. 126.45 (1) (b) requires a licensed milk contractor to become a contributing milk contractor during the license year, the milk contractor shall pay only those quarterly installments that become due after the requirement takes effect.

SB55-SSA1-CA1,624,22 (e) A contributing milk contractor who fails to pay the full amount of any quarterly installment when due shall pay, in addition to that installment, a late payment penalty of $50 or 10% of the overdue installment amount, whichever is greater.

SB55-SSA1-CA1,624,25 (7) Notice of annual assessment and quarterly installments. When the department issues an annual license to a contributing milk contractor, the department shall notify the milk contractor of all of the following:

SB55-SSA1-CA1,625,2 (a) The amount of the milk contractor's annual fund assessment under this section.

SB55-SSA1-CA1,625,4 (b) The amount of each required quarterly installment under sub. (6) and the date by which the milk contractor must pay each installment.

SB55-SSA1-CA1,625,6 (c) The penalty that applies under sub. (6) (e) if the milk contractor fails to pay any quarterly installment when due.

SB55-SSA1-CA1,625,10 126.47 Milk contractors; security. (1) Security required. A milk contractor shall file security with the department, and maintain that security until the department releases it under sub. (7), if all of the following apply when the department first licenses the milk contractor under s. 126.41 (1):

SB55-SSA1-CA1,625,12 (a) The milk contractor reports more than $1,500,000 in annual milk payroll obligations under s. 126.41 (6) (a).

SB55-SSA1-CA1,625,14 (b) The milk contractor files an annual financial statement under s. 126.44 (1) and that financial statement shows negative equity.

SB55-SSA1-CA1,625,17 (2) Security continued. A milk contractor who filed security under s. 100.06, 1999 stats., before May 1, 2002, shall maintain that security until the department releases it under sub. (7).

SB55-SSA1-CA1,625,20 (3) Amount of security. A milk contractor who is required to file or maintain security under this section shall at all times maintain the following amount of security:

SB55-SSA1-CA1,625,22 (a) Except as provided in par. (b) or (c), security equal to at least 75% of the amount last reported under s. 126.41 (6) (b) or (9).

SB55-SSA1-CA1,625,25 (b) Except as provided in par. (c), for a milk contractor who procures milk in this state solely as a qualified producer agent, security equal to at least the following amounts:

SB55-SSA1-CA1,626,2 1. For the license year beginning on May 1, 2002, 15% of the amount last reported under s. 126.41 (6) (b) or (9).

SB55-SSA1-CA1,626,4 2. For the license year beginning on May 1, 2003, 30% of the amount last reported under s. 126.41 (6) (b) or (9).

SB55-SSA1-CA1,626,6 3. For the license year beginning on May 1, 2004, 45% of the amount last reported under s. 126.41 (6) (b) or (9).

SB55-SSA1-CA1,626,8 4. For the license year beginning on May 1, 2005, 60% of the amount last reported under s. 126.41 (6) (b) or (9).

SB55-SSA1-CA1,626,10 5. For a license year beginning after May 1, 2005, 75% of the amount last reported under s. 126.41 (6) (b) or (9).

SB55-SSA1-CA1,626,14 (c) For a contributing milk contractor who procures milk in this state solely as a qualified producer agent, for the period beginning on May 1, 2002, and ending on April 30, 2007, security equal to at least 7.5% of the amount last reported under s. 126.41 (6) (b) or (9), but not more than $500,000.

SB55-SSA1-CA1,626,17 (4) Form of security. The department shall review, and determine whether to approve, security filed under this section. The department may approve only the following types of security:

SB55-SSA1-CA1,626,18 (a) Currency.

SB55-SSA1-CA1,626,19 (b) A commercial surety bond if all of the following apply:

SB55-SSA1-CA1,626,21 1. The surety bond is made payable to the department for the benefit of milk producers and producer agents.