126.46(4)(b)6.
6. Add the amount determined under
subd. 3. to the amount determined under
subd. 5.
126.46(4)(c)
(c) Except as provided in
par. (e), 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.
126.46(4)(d)
(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.
126.46(4)(e)
(e) If the milk contractor procures producer milk in this state solely as a producer agent and the milk contractor has not filed an annual financial statement under
s. 126.44 or has filed an annual financial statement that 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 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.
126.46(5)
(5) Debt to equity ratio assessment factor. 126.46(5)(a)(a) A milk contractor's debt to equity ratio assessment factor under
sub. (4) (a) is 0.0015, except as follows:
126.46(5)(a)1.
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.
126.46(5)(a)2.
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.
126.46(5)(a)3.
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.
126.46(5)(b)
(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.
126.46(5m)
(5m) Reduced assessment for certain milk contractors filing security. If a milk contractor files security under
s. 126.47 (1) (b), the milk contractor's assessment is the amount determined under
sub. (1) reduced by an amount determined as follows:
126.46(5m)(a)
(a) Divide the amount of security that the milk contractor is required to file as determined under
s. 126.47 (3) (b) by the amount of the milk contractor's estimated default exposure, as defined in
s. 126.47 (1) (b) 1.
126.46(5m)(b)
(b) Multiply the amount of the assessment determined under
sub. (1) by the amount determined under
par. (a).
126.46(6)(a)(a) A contributing milk contractor shall pay the milk contractor's annual fund assessment in equal quarterly installments that are due as follows:
126.46(6)(a)1.
1. The first installment is due on June 1 of the license year.
126.46(6)(a)2.
2. The 2nd installment is due on September 1 of the license year.
126.46(6)(a)3.
3. The 3rd installment is due on December 1 of the license year.
126.46(6)(a)4.
4. The 4th installment is due on March 1 of the license year.
126.46(6)(b)
(b) A contributing milk contractor may prepay any of the quarterly installments under
par. (a).
126.46(6)(c)
(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.
126.46(6)(d)
(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.
126.46(6)(e)
(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.
126.46(7)
(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:
126.46(7)(a)
(a) The amount of the milk contractor's annual fund assessment under this section.
126.46(7)(b)
(b) The amount of each required quarterly installment under
sub. (6) and the date by which the milk contractor must pay each installment.
126.46(7)(c)
(c) The penalty that applies under
sub. (6) (e) if the milk contractor fails to pay any quarterly installment when due.
126.46 History
History: 2001 a. 16;
2003 a. 38.
126.47
126.47
Milk contractors; security. 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(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).
