Producer Security Fund; Assessment Revenues
The following table shows projected assessment revenues for FY 2019-20 (with and without the changes in this proposed rule):
Total Projected Fund Assessment Revenues |
| FY 2019-20* Without this rule | FY 2019-20* With this rule | Difference |
Grain Dealers | $ 974,000 | $ 256,000 | $ (718,000) |
Grain Warehouse Keepers | 38,000 | 38,000 | 0 |
Milk Contractors | 1,095,000 | 859,000 | (236,000) |
Vegetable Contractors | 24,000 | 254,000 | 230,000 |
TOTAL | $ 2,131,000 | $ 1,407,000 | $ (724,000) |
* Projection assumes constant procurement volumes, commodity price levels and contractor financial strength.
Without this rule, the Department projects that the fund balance will grow to $10,552,000 at the end of FY 2019-20. With this rule, the Department projects that the fund balance will grow to $9,562,000 by the end of FY 2019-20. Under this rule, the fund balance amount attributable to vegetable contractor will build over several years toward the required statutory minimum (it currently falls short of the required minimum).
| Minimum Statutory Balance | Actual Balance as of June 30, 2016 | Maximum Statutory Balance |
Grain Dealers | $ 1,000,000 | $ 5,546,281.97 | $ 6,000,000 |
Grain Warehouse Keepers | $ 200,000 | $ 46,432.94 | $ 1,000,000 |
Milk Contractors | $ 3,000,000 | $ 6,132,665.50 | $ 12,000,000 |
Vegetable Contractors | $ 800,000 | ($ 4,707,617.97) | $ 3,000,000 |
Entire Fund | $ 5,000,000 | $ 7,017,762.44 | $ 22,000,000 |
Analysis and Supporting Documents used to Determine Effect on Small Business
Members of the Agricultural Producer Security Council (“Council”), as defined in Wis. Stat. § 15.137 (1), have worked with the Department in crafting certain rule changes following the 2015 actuarial study. Members represent the following: the Farmers' Educational and Cooperative Union of America, Wisconsin Division; the Midwest Food Processors Association, Inc.; the National Farmers' Organization, Inc.; the Wisconsin Agri-Business Association, Inc.; the Wisconsin Cheese Makers Association; the Wisconsin Corn Growers Association, Inc., the Wisconsin Soybean Association, Inc.; the Wisconsin Dairy Products Association, Inc.; the Wisconsin Farm Bureau Federation; Cooperative Network; and the Wisconsin Potato and Vegetable Growers Association, Inc. Effect on Small Business
This rule will have a positive impact on grain dealers by automatically reducing assessments whenever the grain dealer portion of the Fund balance exceeds its statutory maximum. The rule also reduces deferred payment contract assessments whenever the grain dealer portion of the Fund balance exceeds its statutory maximum.
This rule will have a positive impact on milk contractors by reducing their assessments by 20 percent. The Fund will continue to grow but at a slower pace thus ensuring that they pay a fairer share of the cost of the program.
This rule will increase vegetable contractor fund assessments by 0.2% of their contract obligations to producers. By spreading the increase to achieve the statutory minimum over 18 years, this should have minimal impacts on the vegetable contractors.
DATCP Contact
David A. Woldseth
Department of Agriculture, Trade and Consumer Protection
P.O. Box 8911
Madison, WI 53708-8911
Telephone (608) 224-5164
Where and When Comments May Be Submitted
Questions and comments related to this rule may be directed to:
David A. Woldseth
Department of Agriculture, Trade and Consumer Protection
P.O. Box 8911
Madison, WI 53708-8911
Telephone (608) 224-5164
Rule comments will be accepted up to two weeks after the last public hearing is held on this rule.
Section 1. ATCP 99.126 (2) is amended to read:
(2) Basic assessment.
(a) A contributing grain dealer who reports less than $500,000 in grain payments under s. 126.11 (9) (a), Stats., shall pay a basic assessment equal to the greater of the following amounts: 1. $100, or;.
2. If the fund balance attributable to grain dealers is less than $6 million on May 31 of the last preceding license year, then Tthe sum of the amounts calculated under s. 126.15 (1) (a) and (b), Stats. (b) A contributing grain dealer who reports at least $500,000 but less than $3 million in grain payments under s. 126.11 (9) (a), Stats., shall pay a basic assessment equal to the greater of the following amounts: 1. $200, or;.
2. If the fund balance attributable to grain dealers is less than $6 million on May 31 of the last preceding license year, then Tthe sum of the amounts calculated under s. 126.15 (1) (a) and (b), Stats. (c) A contributing grain dealer who reports at least $3 million in grain payments under s. 126.11 (9) (a), Stats., shall pay a basic assessment equal to the greater of the following amounts: 1. $500, or;.
2. If the fund balance attributable to grain dealers is less than $6 million on May 31 of the last preceding license year, then tThe sum of the amounts calculated under s. 126.15 (1) (a) and (b), Stats. Section 2. ATCP 99.126 (3) is repealed and replaced:
(3) Deferred payment assessment. (a) A contributing grain dealer shall apply a deferred payment assessment rate of 0.000875 to deferred payment contracts entered into on or after September 1, if the fund balance attributable to grain dealers is greater than $6 million on May 31 of the last preceding license year.
(b) A contributing grain dealer shall apply a deferred payment assessment rate of 0.0035 to deferred payment contracts entered on or after September 1, if the fund balance attributable to grain dealers is not more than $6 million on May 31 of the last preceding license year.
(c) A contributing grain dealer shall pay a deferred payment assessment equal to the amount, if any, that the grain dealer paid to producers under deferred payment contracts during the 12 months ended June 30th of the preceding license year multiplied by rates that applied to those contracts as specified under par. (a) and (b).
A contributing grain dealer shall pay a deferred payment assessment equal to 0.0035 multiplied by the amount, if any, that the grain dealer reports under s. 126.11 (9) (b), Stats., in the grain dealer's license application for that license year. Section 3. ATCP 100.135 is amended to read:
ATCP 100.135 Contributing milk contractors; fund assessments. (1) General. A contributing milk contractor shall pay an annual fund assessment for each license year. The annual fund assessment shall be calculated under this section, rather than under s. 126.46, Stats. Except as provided in sub. (6) or (10), or s. ATCP 100.13, the annual fund assessment amount is the minimum assessment amount listed in sub. (9) or the sum of the following multiplied by 0.8, whichever is greater: Section 4. ATCP 101.245 is amended to read:
(2) Assessment amount.
(a) A contributing vegetable contractor that reports less than $500,000 in contract obligations under s. 126.56 (9) (am), Stats., shall pay an annual fund assessment equal to the sum of the amount determined under par. (d) and the greater of the following amounts: 2. The sum of the amounts calculated under s. 126.60 (1) (a) and (b), Stats. If all of the contract obligations reported by the vegetable contractor under s. 126.56 (9) (am), Stats., were made under written contracts where payments were required no more than 30 days after taking custody or control of the vegetables, then further divide this amount by 2. (b) A contributing vegetable contractor that reports at least $500,000 but less than $4 million in contract obligations under s. 126.56 (9) (am), Stats., shall pay an annual fund assessment equal to the sum of the amount determined under par. (d) and the greater of the following amounts: 1. $200, or;.
2. The sum of the amounts calculated under s. 126.60 (1) (a) and (b), Stats. If all of the contract obligations reported by the vegetable contractor under s. 126.56 (9) (am), Stats., were made under written contracts where payments were required no more than 30 days after taking custody or control of the vegetables, then further divide this amount by 2. (c) A contributing vegetable contractor who reports $4 million or more in contract obligations under s. 126.56 (9) (am), Stats., shall pay an annual fund assessment equal to the sum of the amount determined under par. (d) and the greater of the following amounts: 1. $500, or;.
2. The sum of the amounts calculated under s. 126.60 (1) (a) and (b), Stats. If all of the contract obligations reported by the vegetable contractor under s. 126.56 (9) (am), Stats., were made under written contracts where payments were required no more than 30 days after taking custody or control of the vegetables, then further divide this amount by 2. (d) If the fund balance attributable to vegetable contractors is less than $800,000 on November 30 of the last preceding license year, then the lesser of:
1. $50,000, or;
2. The amount of contract obligations under s. 126.56 (9) (am), Stats., multiplied by 0.002. 3. If all of the contract obligations reported by the vegetable contractor under s. 126.56 (9) (am), Stats., were made under written contracts where payments were required no more than 30 days after taking custody or control of the vegetables, then divide the amounts under subd. 1. and 2. by 2. Section 5. Effective date: This rule takes effect on the first day of the month following publication in the Wisconsin administrative register, as provided in s. 227.22 (2) (intro.), Stats.
