126.47(1)(a)(a) 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):
126.47(1)(a)2.
2. The milk contractor files an annual financial statement under
s. 126.44 (1) and that financial statement shows negative equity.
126.47(1)(b)2.
2. A milk contractor shall file security with the department, and maintain that security until the department releases it under
sub. (7) (am), if the milk contractor files an annual financial statement under
s. 126.44 (1) that shows 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 and the milk contractor's estimated default exposure is greater than the following amount:
126.47(1)(b)2.c.
c. For a license year that begins on May 1, 2005, or later, $20,000,000.
126.47(2)
(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).
126.47(3)(a)(a) Except as provided in
par. (b), a milk contractor who is required to file or maintain security under this section shall at all times maintain the following amount of security:
126.47(3)(a)2.
2. Except as provided in
subd. 3., for a milk contractor who procures milk in this state solely as a qualified producer agent, security equal to at least the following amounts:
126.47(3)(a)3.
3. 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.
126.47(3)(b)
(b) A milk contractor who is only required to file or maintain security under
sub. (1) (b) shall at all times maintain security equal to the milk contractor's estimated default exposure, as defined in
sub. (1) (b) 1., less the following amount:
126.47(3)(b)1.
1. For the license year beginning on May 1, 2003, $18,000,000.
126.47(3)(b)2.
2. For the license year beginning on May 1, 2004, $19,000,000.
126.47(3)(b)3.
3. For a license year that begins on May 1, 2005, or later, $20,000,000.
126.47(4)
(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:
126.47(4)(b)
(b) A commercial surety bond if all of the following apply:
126.47(4)(b)1.
1. The surety bond is made payable to the department for the benefit of milk producers and producer agents.
126.47(4)(b)2.
2. The surety bond is issued by a person authorized to operate a surety business in this state.
126.47(4)(b)3.
3. The surety bond is issued as a continuous term bond that may be canceled only with the department's written agreement or upon 90 days' prior written notice served on the department in person or by certified mail.
126.47(4)(b)4.
4. The surety bond is issued in a form, and subject to any terms and conditions, that the department considers appropriate.
126.47(4)(c)
(c) A certificate of deposit or money market certificate, if all of the following apply:
126.47(4)(c)1.
1. The certificate is issued or endorsed to the department for the benefit of milk producers and producer agents.
126.47(4)(c)2.
2. The certificate may not be canceled or redeemed without the department's written permission.
126.47(4)(c)3.
3. No person may transfer or withdraw funds represented by the certificate without the department's written permission.
126.47(4)(c)4.
4. The certificate renews automatically without any action by the department.
126.47(4)(c)5.
5. The certificate is issued in a form, and subject to any terms and conditions, that the department considers appropriate.
126.47(4)(d)
(d) An irrevocable bank letter of credit if all of the following apply:
126.47(4)(d)1.
1. The letter of credit is payable to the department for the benefit of milk producers or producer agents.
126.47(4)(d)3.
3. The letter of credit is issued for an initial period of at least one year.
126.47(4)(d)4.
4. The letter of credit renews automatically unless, at least 90 days before the scheduled renewal date, the issuing bank gives the department written notice, in person or by certified mail, that the letter of credit will not be renewed.
126.47(4)(d)5.
5. The letter of credit is issued in a form, and subject to any terms and conditions, that the department considers appropriate.
126.47(4)(e)
(e) Security filed with the department under s.
100.06, 1999 stats., before May 1, 2002, except that on January 1, 2003, the department shall withdraw its approval of any security that is not approvable under
pars. (a) to
(d).
126.47(4)(f)
(f) A dairy plant trusteeship created before May 1, 2002, under s.
100.06, 1999 stats. This paragraph does not apply after January 1, 2003.
126.47(5)
(5) Department custody of security. The department shall hold, in its custody, all security filed and maintained under this section. The department shall hold the security for the benefit of milk producers and producer agents.
126.47(6)(a)(a) The department may, at any time, demand additional security from a milk contractor if any of the following applies:
126.47(6)(a)1.
1. The milk contractor's existing security falls below the amount required under
sub. (3) for any reason, including depreciation in the value of the security, increased obligations to milk producers or producer agents, or the cancellation of any security filed with the department.
126.47(6)(a)2.
2. The milk contractor fails to provide required information that is relevant to a determination of security requirements.
126.47(6)(b)
(b) The department shall issue a demand under
par. (a) in writing. The department shall indicate why additional security is required, the amount of security required, and the deadline date for filing security. The department may not specify a deadline for filing security that is more than 30 days after the date on which the department issues its demand for security.
126.47(6)(c)
(c) A milk contractor may request a hearing, under
ch. 227, on a demand for security under
par. (b). A request for hearing does not automatically stay a security demand.
126.47(6)(d)
(d) If a milk contractor fails to comply with the department's demand for security under this subsection, the milk contractor shall give written notice of that fact to all milk producers and producer agents from whom the contractor procures producer milk in this state. If the milk contractor fails to give accurate notice under this paragraph within 5 days after the deadline for filing security under
par. (b) has passed, the department shall promptly notify milk producers and producer agents by publishing a class 3 notice under
ch. 985. The department may also give individual notice to those milk producers or producer agents of whom the department is aware.
126.47(6)(e)
(e) If a milk contractor fails to comply with the department's demand for security under this subsection, the department may do any of the following:
126.47(7)(a)(a) The department may release security filed under
sub. (1) (a) if any of the following applies:
126.47(7)(a)1.
1. The milk contractor reports not more than $1,500,000 in milk payroll obligations under
s. 126.41 (6) (a) for at least 2 consecutive years and the milk contractor pays the quarterly fund assessment that would have been required of the milk contractor if the milk contractor had been a contributing milk contractor on the most recent quarterly installment date under
s. 126.46 (6).
126.47(7)(a)2.
2. The milk contractor's annual financial statement under
s. 126.44 shows positive equity for at least 2 consecutive years, the financial statements are audited or, if the milk contractor reports $6,000,000 or less in annual milk payroll obligations under
s. 126.41 (6) (a), reviewed, and the milk contractor pays the quarterly fund assessment that would have been required of the milk contractor if the milk contractor had been a contributing milk contractor on the most recent quarterly installment date under
s. 126.46 (6).
126.47(7)(am)
(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) 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.
126.47(7)(b)
(b) On August 1, 2002, the department may release security maintained under
sub. (2), unless the milk contractor is required to file security under
sub. (1).
126.47(7)(c)
(c) The department may release security to the extent that the security exceeds the amount required under
sub. (3).
126.47(7)(d)
(d) The department may release security if the milk contractor files alternative security, of equivalent value, that the department approves.
126.47(7)(e)
(e) The department shall release security if the milk contractor has gone out of business and paid all milk payroll obligations in full.
126.47 History
History: 2001 a. 16;
2003 a. 38,
238,
320.
126.48
126.48
Milk contractors; payments to producers. 126.48(1)(1)
First monthly payment. 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% 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% of the contract price, whichever is greater.
126.48(2)
(2) Second monthly payment. By the 19th day of each month, a milk contractor shall pay the balance due for producer milk received during the preceding month.
126.48(3)
(3) Payment explanation. 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. The department may specify the content of the explanation, including information related to any of the following:
126.48(3)(b)
(b) Milk producer or producer agent identification.
126.48(3)(i)
(i) Average gross pay per hundredweight less hauling charges.
126.48 History
History: 2001 a. 16.
126.49
126.49
Milk contractors; records and reports. 126.49(1)(1)
Required records. A milk contractor shall keep accurate records and accounts of milk receipts, payments for milk received, and amounts owed to milk producers. The department may, by rule, specify records that a milk contractor must keep.
126.49(2)
(2) Required reports. The department may, by rule, require a milk contractor to file with the department periodic reports of information needed for the administration of this chapter.
126.49(3)
(3) Records retention; inspection. A milk contractor shall retain records required under
sub. (1) for at least 6 years after the records are created. A milk contractor shall make the records available to the department for inspection and copying upon request.
126.49 History
History: 2001 a. 16.
126.50
126.50
Milk contractors; prohibited practices. No milk contractor may do any of the following:
