126.46(5m)
(5m) Reduced assessment for certain milk contractors filing security. If a contributing milk contractor files security under
s. 126.47 (1) (b), the contributing milk contractor's fund assessment is the amount specified 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 under
s. 126.47 (3) (b) by 75 percent of the following:
126.46(5m)(b)
(b) Multiply the amount specified 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 percent 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.
126.47
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)1.1. In this paragraph, “
estimated default exposure" means 75 percent of the following:
126.47(1)(b)2.
2. A milk contractor shall file security with the department, and shall maintain that security until the department releases it under
sub. (7) (am), if all of the following apply:
126.47(1)(b)2.a.
a. The milk contractor's last annual financial statement under
s. 126.44 (1) 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.
126.47(1)(b)2.b.
b. The milk contractor's estimated default exposure exceeds $20,000,000.
126.47(3)(a)(a) Except as provided in
par. (b), a milk contractor who is required to file or maintain security under
sub. (1) shall at all times maintain security in an amount equal to at least 75 percent of the following:
126.47(3)(b)
(b) A milk contractor who is required to file or maintain security only 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 $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(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 150,000 hundredweight of milk under
s. 126.41 (6) (bg) for at least 2 consecutive years and the milk contractor pays the fund assessment installment amount that would have been required of the milk contractor if the milk contractor had been a contributing milk contractor on the date when the most recent installment under
s. 126.46 was due.
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 and the milk contractor pays the fund assessment installment amount that would have been required of the milk contractor if the milk contractor had been a contributing milk contractor on the date when the most recent installment under
s. 126.46 was due.
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)(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.
126.48
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 percent 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 percent 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.
