Chapter ATCP 100

ATCP 100.01(10) (10) “Reviewed financial statement” has the meaning given in s. 126.01 (20), Stats.

ATCP 100.01 History History: Cr. Register, February, 1991, No. 422, eff. 5-1-91; renum. from Ag 8.01 and am. (5), (9) (a) and (17), cr. (18m), Register, November, 1992, No. 443, eff. 12-1-92; cr. (18d) and (19m) r. and recr. (19) (c), am. (20) (b), Register, March, 1994, No. 459, eff. 4-1-94; CR 02-113: r. and recr. Register April 2003 No. 568, eff. 5-1-03; CR 05-068: renum. (1) to be (1m), cr. (1), (2m), (4g), (4m), (4p) and (4r) Register April 2006 No. 604, eff. 5-1-06; CR 07-073: r. (4g), am. (4r), cr. (5m) Register December 2008 No. 636, eff. 1-1-09.

subch. II of ch. ATCP 100 Subchapter II — Financial Standards and Security

Subch. II of ch. ATCP 100 Note Note: This subchapter is adopted under authority of ss. 93.07 (1), 126.49, 126.51 and 126.81, Stats., and interprets ch. 126, Stats. The Wisconsin department of agriculture, trade and consumer protection may enforce this subchapter under subch. VIII of ch. 126, Stats.

ATCP 100.10 ATCP 100.10 Financial standards and security; general. A milk contractor shall comply with applicable requirements under ch. 126, Stats.

ATCP 100.10 History History: CR 02-113: cr. Register April 2003 No. 568, eff. 5-1-03.

ATCP 100.12 ATCP 100.12 Financial statement.

ATCP 100.12(1) (1) General. A milk contractor’s financial statement, filed under s. 126.44, Stats., shall comply with this section and s. 126.44, Stats.

ATCP 100.12(2) (2) Liability disclosures. A financial statement shall include a detailed description of all notes, mortgages and other long-term liabilities not due or payable within one year. The description shall be included in the financial statement notes or as an attachment to the financial statement. The description shall indicate the nature of the liabilities, the due dates, and the payment terms.

ATCP 100.12(3) (3) Liability classification. A financial statement shall classify, as current liabilities, notes payable that do not have a specific due date.

ATCP 100.12(4) (4) Asset disclosures.

ATCP 100.12(4)(a) (a) A financial statement shall specifically identify and explain, either in the financial statement notes or as an attachment to the financial statement, the following assets:

ATCP 100.12(4)(a)1. 1. Every non-trade note or account receivable from an officer, director, employee, partner, or stockholder, or from a member of the family of any of those individuals.

ATCP 100.12(4)(a)2. 2. Every note or account receivable from a parent organization, a subsidiary, or an affiliate, other than an employee.

ATCP 100.12 Note Note: “Affiliate” as defined in s. ATCP 100.01 (1) means a person who has significant control or influence. Significant control or influence is a phrase used under generally accepted accounting principals to describe a related party that has sufficient ownership interest to influence the operating and financial policies of an entity.

ATCP 100.12(4)(a)3. 3. Every note or account that has been receivable for more than one year, unless the milk contractor has established an offsetting reserve for uncollectible notes and accounts receivable.

ATCP 100.12(4)(b) (b) A financial statement shall include at least one of the following:

ATCP 100.12(4)(b)1. 1. An allowance for doubtful or uncollectible receivables. The notes to the financial statement shall describe the method used to account for doubtful or uncollectible receivables.

ATCP 100.12(4)(b)2. 2. A summary classifying the age of all notes and accounts receivable.

ATCP 100.12(5) (5) Debt to equity ratio; liability adjustments.

ATCP 100.12(5)(a) (a) Solely for the purpose of calculating a milk contractor’s fund assessment under s. 126.46, Stats., a milk contractor may adjust the milk contractor’s debt to equity ratio under s. 126.44 (8) (c) 2., Stats., by deducting, from liabilities reported in the milk contractor’s financial statement, an amount borrowed from a lending institution in order to hold aged cheese in inventory for the aging period required for that cheese under 21 CFR 133. A milk contractor may not make this adjustment unless all the following apply:

ATCP 100.12(5)(a)1. 1. The milk contractor holds the aged cheese in inventory on the date of the balance sheet.

ATCP 100.12(5)(a)2. 2. The lending institution holds a security interest in the aged cheese, to secure repayment of the amount borrowed.

ATCP 100.12(5)(a)3. 3. The amount of the liability deduction does not exceed the amount owed to the lending institution on the date of the balance sheet, or the value of the aged cheese on the date of the balance sheet, whichever is less.

ATCP 100.12(5)(a)4. 4. The liability deduction and offsetting cheese inventory asset are identified in the financial statement notes or as an attachment to the financial statement.

ATCP 100.12 Note Note: The liability adjustment under this section does not apply to the milk contractor’s debt to equity ratio when used for any purpose under ch. 126, Stats., other than the calculation of fund assessments under s. 126.46, Stats.

ATCP 100.12(5)(b) (b) If aged cheese inventory value as a percentage of total cheese inventory value is greater on the current annual balance sheet date than on the last preceding annual balance sheet date, the liability deduction under par. (a) may not exceed that prior year’s percentage multiplied by the total cheese inventory value on the current annual balance sheet date.

ATCP 100.12(6) (6) Attachments. If information required under this section is provided in an attachment to a reviewed or audited financial statement, the following requirements apply:

ATCP 100.12(6)(a) (a) The attachment shall be prepared on the letterhead of the certified public accountant who reviewed or audited the financial statement.

ATCP 100.12(6)(b) (b) The certified public accountant who reviewed or audited the financial statement shall certify, in the attachment, whether the certified public accountant has reviewed or audited the attachment.

ATCP 100.12 History History: CR 02-113: cr. Register April 2003 No. 568, eff. 5-1-03.

ATCP 100.13 ATCP 100.13 Fund assessment temporarily affected by merger or acquisition; partial refund.

ATCP 100.13(1) (1) Partial refund of assessment. The department may refund part of an annual fund assessment paid by a contributing milk contractor under s. ATCP 100.135 if all of the following apply:

ATCP 100.13(1)(a) (a) The milk contractor paid the full amount of the assessment, including any late payment penalties that apply under s. ATCP 100.135 (7) (e).

ATCP 100.13(1)(b) (b) The milk contractor is the surviving entity in a merger under s. 179.77, 180.1101, 183.1201 or 185.61, Stats., or has acquired property pursuant to a sale of assets under s. 180.1202, Stats.

ATCP 100.13(1)(c) (c) The assessment was based on the milk contractor’s financial statement for the fiscal year in which the merger or acquisition under par. (b) took effect.

ATCP 100.13(1)(d) (d) The milk contractor’s financial statement, for the fiscal year in which the merger or acquisition under par. (b) took effect, caused the sum of the milk contractor’s current ratio assessment rate under s. ATCP 100.135 (2) and debt to equity ratio assessment rate under s. ATCP 100.135 (4), to increase by at least 100% compared to the preceding license year.

ATCP 100.13(1)(e) (e) The milk contractor’s annual financial statements, for the fiscal years immediately preceding and immediately following the fiscal year in which the merger or acquisition under par. (b) took effect, show positive equity, a current ratio of at least 1.25 to 1.00 and a debt to equity ratio of no more than 3.0 to 1.0.

ATCP 100.13(1)(f) (f) In the license year immediately following the license year for which the milk contractor paid the assessment, the sum of the milk contractor’s current ratio assessment rate under s. ATCP 100.135 (2) and debt to equity assessment rate under s. ATCP 100.135 (2) declines by at least 50% compared to the license year for which the milk contractor paid the assessment.

ATCP 100.13(1)(g) (g) The milk contractor requests the refund in writing, by May 1 of the milk contractor’s next license year.

ATCP 100.13(2) (2) Refund amount. The amount of the refund under sub. (1) shall equal 75% of the difference between the assessment amount paid by the milk contractor and the assessment amount required of the milk contractor in the next license year.

ATCP 100.13(3) (3) Refund paid as credit against next year’s assessment.

ATCP 100.13(3)(a) (a) The department shall pay the refund under sub. (1) as a credit against the milk contractor’s assessment for the next license year. The department shall apportion the credit, pro rata, against the quarterly assessment installments required of the milk contractor under s. ATCP 100.135 (7) in that next license year. If the credit exceeds the total assessment required of the milk contractor in that next license year, the department shall credit the balance in the same fashion against assessments required of the milk contractor in subsequent consecutive license years, except that the department may not grant a credit in more than 4 subsequent license years.

ATCP 100.13(3)(b) (b) The department may not pay any refund under sub. (1), except in the manner prescribed in par. (a). The department may not pay the refund to any person other than the milk contractor who paid the original assessment on which the refund is given.

ATCP 100.13 History History: Emerg. cr. eff. 1-29-04; CR 04-030: cr. Register September 2004 No. 585, eff. 10-1-04; CR 07-073: am. (1) (intro.), (a), (d) and (3) (a) Register December 2008 No. 636, eff. 1-1-09; correction in (1) (f) made under s. 13.92 (4) (b) 7., Stats., Register June 2011 No. 666.

ATCP 100.135 ATCP 100.135 Contributing milk contractors; fund assessments.

ATCP 100.135(1) (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 shall equal the sum of the assessments in subs. (1e) and (1m).

ATCP 100.135(1e) (1e) Basic assessment. A contributing milk contractor shall pay a basic assessment equal to the minimum assessment amount listed in sub. (9) or the sum of the following multiplied by 0.8, whichever is greater:

ATCP 100.135(1e)(a) (a) The milk contractor’s current ratio assessment. The current ratio assessment for a license year equals the milk contractor’s current ratio assessment rate under sub. (2) multiplied by the annual milk payroll obligations reported under s. 126.41 (6) (a), Stats., in the milk contractor’s license application for that license year.

ATCP 100.135(1e)(b) (b) The milk contractor’s debt to equity ratio assessment. The debt to equity ratio assessment for a license year equals the milk contractor’s debt to equity ratio assessment rate under sub. (4) multiplied by the annual milk payroll obligations reported under s. 126.41 (6) (a), Stats., in the milk contractor’s license application for that license year.

ATCP 100.135(1m) (1m) Deferred payment assessment. A contributing milk contractor shall pay a deferred payment assessment under s. 126.485 (5), Stats., equal to the amount the milk contractor reports under s. 126.41 (6) (ag), Stats., in the milk contractor’s license application for that license year multiplied by 0.0035.

ATCP 100.135(2) (2) Current ratio assessment rate. A milk contractor’s current ratio assessment rate is calculated, at the beginning of the license year, as follows:

ATCP 100.135(2)(a) (a) If the milk contractor has filed an annual financial statement under s. 126.44, Stats., and that financial statement shows a current ratio of at least 1.25 to 1.0, the milk contractor’s current ratio assessment rate equals the greater of zero or the current ratio assessment factor in sub. (3) (a) multiplied by an amount determined as follows:

ATCP 100.135(2)(a)1. 1. Subtract 3 from the current ratio.

ATCP 100.135(2)(a)2. 2. Divide the amount determined under subd. 1. by 6.

ATCP 100.135(2)(a)3. 3. Multiply the amount determined under subd. 2. by negative one.

ATCP 100.135(2)(a)4. 4. Raise the amount determined under subd. 3. to the 3rd power.

ATCP 100.135(2)(a)5. 5. Divide 0.55 by the current ratio.

ATCP 100.135(2)(a)6. 6. Raise the amount determined under subd. 5. to the 7th power.

ATCP 100.135(2)(a)7. 7. Add the amount determined under subd. 4. to the amount determined under subd. 6.

ATCP 100.135(2)(a)8. 8. Add 0.075 to the amount determined under subd. 7.

ATCP 100.135(2)(b) (b) If the milk contractor has filed an annual financial statement under s. 126.44, Stats., and that financial statement shows a current ratio of less than 1.25 to 1.0, but greater than 1.05 to 1.0, the milk contractor’s current ratio assessment rate equals the current ratio assessment factor in sub. (3) (b) multiplied by an amount determined as follows:

ATCP 100.135(2)(b)1. 1. Subtract 3 from the current ratio.

ATCP 100.135(2)(b)2. 2. Divide the amount determined under subd. 1. by 6.

ATCP 100.135(2)(b)3. 3. Multiply the amount determined under subd. 2. by negative one.

ATCP 100.135(2)(b)4. 4. Raise the amount determined under subd. 3. to the 3rd power.

ATCP 100.135(2)(b)5. 5. Divide 0.55 by the current ratio.

ATCP 100.135(2)(b)6. 6. Raise the amount determined under subd. 5. to the 7th power.

ATCP 100.135(2)(b)7. 7. Add the amount determined under subd. 4. to the amount determined under subd. 6.

ATCP 100.135(2)(b)8. 8. Add 0.075 to the amount determined under subd. 7.

ATCP 100.135(2)(c) (c) Except as provided in par. (e), if the milk contractor has filed an annual financial statement under s. 126.44, Stats., and that financial statement shows a current ratio of less than or equal to 1.05 to 1.0, the milk contractor’s current ratio assessment rate equals the current ratio assessment factor in sub. (3) (b) multiplied by 0.1201478.

ATCP 100.135(2)(d) (d) Except as provided in par. (e), if the milk contractor has not filed an annual financial statement under s. 126.44, Stats., the milk contractor’s current ratio assessment rate equals the current ratio assessment factor in sub. (3) (b) multiplied by 0.103005.

ATCP 100.135(2)(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, Stats., or has filed an annual financial statement that shows a current ratio of not more than 1.05 to 1.0, the milk contractor’s current 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 current ratio assessment rate is 0.000175.

ATCP 100.135(3) (3) Current ratio assessment factor.

ATCP 100.135(3)(a) (a) A milk contractor’s current ratio assessment factor under sub. (2) (a) is 0.001, except as follows:

ATCP 100.135(3)(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 0.0007.

ATCP 100.135(3)(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 0.0003.

ATCP 100.135(3)(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.

ATCP 100.135(3)(b) (b) A milk contractor’s current ratio assessment factor under sub. (2) (b) to (d) is 0.0015, except that, for the milk contractor’s 5th or higher consecutive full license year of participation in the fund, the milk contractor’s current ratio assessment factor is 0.000675.

ATCP 100.135(4) (4) Debt to equity assessment rate. A milk contractor’s debt to equity ratio assessment rate is calculated, at the beginning of the license year, as follows:

ATCP 100.135(4)(a) (a) If the milk contractor has filed an annual financial statement under s. 126.44, Stats., and that financial statement shows positive equity and a debt to equity ratio of not more than 2.0 to 1.0, the milk contractor’s debt to equity ratio assessment rate equals the greater of zero or the debt to equity ratio assessment factor in sub. (5) (a) multiplied by an amount determined as follows:

ATCP 100.135(4)(a)1. 1. Subtract 2 from the debt to equity ratio.

ATCP 100.135(4)(a)2. 2. Divide the amount determined under subd. 1. by 3.

ATCP 100.135(4)(a)3. 3. Raise the amount determined under subd. 2. to the 9th power.

ATCP 100.135(4)(a)4. 4. Divide the debt to equity ratio by 3.25.

ATCP 100.135(4)(a)5. 5. Raise the amount determined in subd. 4. to the 5th power.

ATCP 100.135(4)(a)6. 6. Add the amount determined under subd. 3. to the amount determined under subd. 5.

ATCP 100.135(4)(a)7. 7. Add 0.025 to the amount determined under subd. 6.

ATCP 100.135(4)(b) (b) If the milk contractor files an annual financial statement under s. 126.44, Stats., and that financial statement shows a debt to equity ratio of greater than 2.0 to 1.0 but less than 2.9 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 an amount determined as follows: