Chapter 126

126.40(1) (1) “Contributing milk contractor” means a milk contractor who is licensed under s. 126.41 (1), who has not been disqualified from the fund under s. 126.45 (3), and who either:

126.40(1)(a) (a) Has paid one or more fund assessments under s. 126.46.

126.40(1)(b) (b) Is required to contribute to the fund but the first fund assessment under s. 126.46 (6) is not yet due.

126.40(2) (2) “Current ratio” means the ratio of the value of current assets to the value of current liabilities, calculated according to s. 126.44 (8) (c) 1.

126.40(3) (3) “Dairy farm” has the meaning given in s. 97.22 (1) (a).

126.40(4) (4) “Dairy plant” has the meaning given in s. 97.20 (1) (a).

126.40(5) (5) “Dairy plant operator” means a person who holds or is required to hold a dairy plant license under s. 97.20.

126.40(6) (6) “Debt to equity ratio” means the ratio of the value of liabilities to equity, calculated according to s. 126.44 (8) (c) 2.

126.40(6m) (6m) “Deferred payment contract” means a contract for the procurement of producer milk under which all of the following apply to a milk contractor’s payment:

126.40(6m)(a) (a) For producer milk received during the first 15 days of the preceding month, the milk contractor’s payment is due after the 4th day of the month, based 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.

126.40(6m)(b) (b) For producer milk received during the preceding month, the balance of the milk contractor’s payment is due after the 19th day of the month.

126.40(7) (7) “Disqualified milk contractor” means a milk contractor who is disqualified from the fund under s. 126.45 (3).

126.40(7e) (7e) “Estimated default exposure” means the sum of the following:

126.40(7e)(a) (a) Seventy-five percent of the following:

126.40(7e)(a)1. 1. If the milk contractor reports unpaid milk payroll obligations under ss. 126.41 (6) (b) 1. and 126.47 (5m) (b) 1., the highest amount of unpaid milk payroll obligations, reported under s. 126.41 (6) (b) 1. or 126.47 (5m) (b) 1., that the milk contractor had at any time during the last 12 months.

126.40(7e)(a)2. 2. If the milk contractor reports monthly milk payroll obligations under ss. 126.41 (6) (b) 2. and 126.47 (5m) (b) 2., the highest amount of milk payroll obligations, reported under s. 126.41 (6) (b) 2. or 126.47 (5m) (b) 2., that the milk contractor incurred in any month during the last 12 months.

126.40(7e)(b) (b) The milk contractor’s highest total, at any time during the 12 preceding months, of unpaid obligations for producer milk procured in this state under a deferred payment contract, excluding any unpaid obligations under a deferred payment contract, for milk procured in this state, with a milk producer or producer agent that has, under s. 126.70 (1) (b), permanently waived eligibility to file a default claim against the milk contractor.

126.40(7m) (7m) “License year” means the period beginning on May 1 and ending on the following April 30.

126.40(8) (8) “Milk contractor” means a person who buys producer milk or who markets producer milk as a producer agent. “Milk contractor” does not include any of the following:

126.40(8)(a) (a) A person who merely brokers a contract between a milk producer and a milk contractor, without becoming a party to the contract, taking control of milk, or accepting payment on behalf of the milk producer.

126.40(8)(b) (b) A person who merely buys or sells milk on a board of trade or commodity exchange.

126.40(9) (9) “Milk payroll obligation” means a milk contractor’s gross obligation to a milk producer or producer agent, whether paid or unpaid, for producer milk that the milk contractor procures in this state.

126.40(10) (10) “Milk producer” means a person who produces milk on a dairy farm.

126.40(11) (11) “Procure producer milk” means to buy producer milk or acquire the right to market producer milk.

126.40(12) (12) “Procure producer milk in this state” means any of the following:

126.40(12)(a) (a) To buy producer milk for receipt in this state.

126.40(12)(b) (b) To receive producer milk directly from a dairy farm in this state.

126.40(12)(c) (c) To collect producer milk from a dairy farm in another state, for direct shipment to a dairy plant that the milk contractor operates in this state.

126.40(12)(d) (d) To acquire the right to market producer milk that is produced in this state.

126.40(13) (13) “Producer agent” means a person who acts on behalf of a milk producer to market or accept payment for producer milk without taking title to that milk, including a person who uses a producer trust fund to market or accept payment for producer milk. “Producer agent” does not include any of the following:

126.40(13)(a) (a) A person who merely brokers a contract between a milk producer and a milk contractor, without becoming a party to the contract, taking control of milk, or accepting payment on behalf of the milk producer.

126.40(13)(b) (b) A person who merely holds or transports milk for a milk producer without marketing or accepting payment for milk on behalf of the milk producer.

126.40(14) (14) “Producer milk” means milk that is owned by or held in trust for one or more milk producers. “Producer milk” includes milk that a producer agent markets for a producer, without taking title to the milk.

126.40(15) (15) “Qualified producer agent” means a milk contractor who does all of the following:

126.40(15)(a) (a) Procures milk in this state solely as a producer agent.

126.40(15)(b) (b) Complies with the rules promulgated under s. 126.51.

126.40 History History: 2001 a. 16; 2009 a. 296; 2017 a. 155, ss. 20 to 22, 47 to 49.

126.41 126.41 Milk contractors; licensing.

126.41(1) (1) Annual license.

126.41(1)(a) (a) No milk contractor may do any of the following without a current annual license from the department:

126.41(1)(a)1. 1. Receive producer milk in this state.

126.41(1)(a)2. 2. Collect producer milk from a dairy farm in another state for direct shipment to a dairy plant that the milk contractor operates in this state.

126.41(1)(a)3. 3. Acquire the right to market, as a producer agent, producer milk produced in this state.

126.41(1)(b) (b) A milk contractor who is not engaged in any activities under par. (a) may volunteer to be licensed if the milk contractor receives, outside this state, direct shipments of producer milk from dairy farms in this state.

126.41(1)(c) (c) The department shall issue annual milk contractor licenses under pars. (a) and (b). A license expires on the April 30 following its issuance. No person may transfer or assign a license issued under par. (a) or (b).

126.41(2) (2) License application. A milk contractor shall apply for a license under sub. (1) in writing, on a form provided by the department. An applicant shall provide all of the following:

126.41(2)(a) (a) The applicant’s legal name and any trade name under which the applicant proposes to operate as a milk contractor. If the milk contractor is a dairy plant operator licensed under s. 97.20, the milk contractor shall use the same legal name in both license applications.

126.41(2)(b) (b) A statement of whether the applicant is an individual, a corporation, partnership, cooperative, unincorporated cooperative association, limited liability company, trust, or other legal entity. If the applicant is a corporation, a cooperative, or an association, the applicant shall identify each officer of the corporation or cooperative. If the applicant is a partnership, the applicant shall identify each partner.

126.41(2)(c) (c) The mailing address of the applicant’s primary business location and the name of a responsible individual who may be contacted at that location.

126.41(2)(d) (d) The street address of each business location from which the applicant will operate under the license and the name of a responsible person who may be contacted at each location that is staffed.

126.41(2)(e) (e) All license fees and surcharges required under sub. (3).

126.41(2)(g) (g) A financial statement if required under s. 126.44 (1) and not yet filed.

126.41(2)(h) (h) Other relevant information required by the department.

126.41(3) (3) Annual license fees and surcharges. A milk contractor applying for an annual license under sub. (1) shall include the following fees and surcharges with the license application, unless the department specifies a different fee or surcharge amount by rule:

126.41(3)(a) (a) A nonrefundable basic license fee of $25.

126.41(3)(b) (b) A license surcharge of $500 if the department determines that, within 365 days before submitting the license application, the applicant operated without a license in violation of sub. (1). The applicant shall also pay any license fees, license surcharges, and fund assessments that are still due for any license year in which the applicant violated sub. (1).

126.41(3)(c) (c) A license surcharge of $100 if during the preceding 12 months the applicant failed to file an annual financial statement required under s. 126.44 (1) (b) by the applicable deadline.

126.41(3)(d) (d) A license surcharge of $100 if a renewal applicant fails to renew a license by the license expiration date of April 30.

126.41(3m) (3m) Effect of payment of surcharge. Payment under sub. (3) (b) does not relieve the applicant of any other civil or criminal liability that results from the violation of sub. (1), but does not constitute evidence of any law violation.

126.41(4) (4) Fee statement. The department shall provide, with each license application form, a written statement of all license fees and surcharges required under sub. (3).

126.41(5) (5) No license without full payment. The department may not issue a license under sub. (1) until the applicant pays all license fees and surcharges identified in the department’s statement under sub. (4). The department shall refund a fee or surcharge paid under protest if upon review the department determines that the fee or surcharge is not applicable.

126.41(6) (6) Applicant statement. As part of a license application under sub. (2), an applicant shall provide a statement, signed by the applicant or an authorized officer of the applicant, that reports all of the following information:

126.41(6)(a) (a) The total milk payroll obligations that the applicant incurred during the applicant’s last completed fiscal year, less the total amount reported under par. (br) 3., if any. If the applicant has not yet operated as a milk contractor in this state, the applicant shall estimate the total milk payroll obligations that the applicant will incur during the applicant’s first complete fiscal year, less the total amount reported under par. (br) 3., if any.

126.41(6)(ag) (ag) The amount of payments under par. (a) made under deferred payment contracts.

126.41(6)(ar) (ar) Whether the applicant has had any obligations under deferred payment contracts, for milk procured in this state, at any time since the beginning of the applicant’s last completed fiscal year.

126.41(6)(b) (b) Either of the following amounts:

126.41(6)(b)1. 1. The highest amount of unpaid milk payroll obligations that the applicant had at any time during the applicant’s last completed fiscal year.

126.41(6)(b)2. 2. The highest amount of milk payroll obligations that the applicant incurred in any single month during the applicant’s last completed fiscal year.

126.41(6)(bg) (bg) The total amount in hundredweight of producer milk that the applicant procured in this state during the applicant’s last completed fiscal year, less the total amount reported under par. (br) 2., if any. If the applicant has not yet operated as a milk contractor in this state, the applicant shall estimate the total amount in hundredweight of producer milk that the applicant will procure in this state during the applicant’s first complete fiscal year, less the total amount reported under par. (br) 2., if any.

126.41(6)(br) (br) All of the following information related to each milk producer or producer agent that under s. 126.70 (1) (b) has permanently waived eligibility to file a default claim against the applicant:

126.41(6)(br)1. 1. A copy of the written waiver that the milk producer or producer agent filed under s. 126.70 (1) (c).

126.41(6)(br)2. 2. The total amount in hundredweight of producer milk that the applicant procured in this state from that milk producer or producer agent during the applicant’s last completed fiscal year. If the applicant has not yet operated as a milk contractor in this state, the applicant shall estimate the total amount in hundredweight of producer milk that the applicant will procure in this state from that milk producer or producer agent during the applicant’s first complete fiscal year.

126.41(6)(br)3. 3. The total milk payroll obligations that the applicant incurred during the applicant’s last completed fiscal year for producer milk that the applicant procured from that milk producer or producer agent. If the applicant has not yet operated as a milk contractor in this state, the applicant shall estimate the total milk payroll obligations that the applicant will incur during the applicant’s first complete fiscal year for producer milk that the applicant will procure from that milk producer or producer agent.

126.41(6)(br)4. 4. The amount of payments under subd. 3. made under deferred payment contracts.

126.41(6)(c) (c) The identity of any producer agents from whom the milk contractor procures producer milk.

126.41(6)(d) (d) Other relevant information required by the department.

126.41(7) (7) Action granting or denying application. The department shall grant or deny a license application under sub. (2) within 30 days after the department receives a complete application. If the department denies a license application, the department shall give the applicant written notice stating the reasons for the denial.

126.41(8) (8) License displayed. A milk contractor licensed under sub. (1) shall prominently display a true copy of that license at each business location from which the milk contractor operates in this state.

126.41 History History: 2001 a. 16; 2005 a. 441; 2009 a. 296; 2017 a. 155.

126.42 126.42 Milk contractors; monthly license fee.

126.42(1) (1) Monthly license fee payment. Except as provided under sub. (5) or (6), a milk contractor licensed under s. 126.41 (1) shall pay to the department, by the 25th day of each month, a monthly license fee of 0.15 cent for each 100 pounds of producer milk that the milk contractor procured in this state during the preceding month. The milk contractor shall submit, with the fee payment, a report stating the number of pounds of producer milk that the milk contractor procured in this state during the preceding month.

126.42(2) (2) Late payment surcharge. If a milk contractor fails to pay a monthly fee under sub. (1) when due, the milk contractor shall pay, in addition to that monthly fee, a surcharge equal to 20 percent of the monthly fee. The milk contractor shall pay the surcharge by the 25th day of the following month.

126.42(3) (3) Fee credits. If the balance in the fund contributed by milk contractors exceeds $4,000,000 on February 28 of any license year, the department shall credit 50 percent of the excess amount against fees charged under sub. (1) to contributing milk contractors who file timely renewal applications for the next license year. The department shall credit each contributing milk contractor on a prorated basis, in proportion to the total fees that the milk contractor has paid under sub. (1) for the 4 preceding license years. Each month that a contributing contractor who qualifies for a credit under this subsection pays fees under sub. (1), the department shall credit to the contributing milk contractor one-twelfth of the total annual credit determined under this subsection.

126.42(4) (4) Fee statement. Whenever the department issues an annual license to a milk contractor under s. 126.41 (1), the department shall give the milk contractor notice of the monthly fees required under this section. The department shall specify all of the following:

126.42(4)(a) (a) The method for computing the monthly fee.

126.42(4)(b) (b) The date by which the milk contractor must pay the fee each month.

126.42(4)(c) (c) The late payment surcharge that may apply under sub. (2).

126.42(4)(d) (d) The fee credit, if any, that applies under sub. (3).

126.42(5) (5) Producer agents; exemption. A producer agent is not required to pay the monthly fee under sub. (1) for producer milk that the producer agent markets to a milk contractor who is licensed under s. 126.41 (1) and who pays the monthly fee on the same milk.