AB698,23 14Section 23. 126.41 (2) (f) of the statutes is repealed.
AB698,24 15Section 24. 126.41 (6) (intro.) of the statutes is amended to read:
AB698,9,1916 126.41 (6) Sworn and notarized Applicant statement. (intro.) As part of a
17license application under sub. (2), an applicant shall provide a sworn and notarized
18statement, signed by the applicant or an authorized officer of the applicant, that
19reports all of the following information:
AB698,25 20Section 25. 126.41 (6) (ag) of the statutes is created to read:
AB698,9,2221 126.41 (6) (ag) The amount of payments under par. (a) made under deferred
22payment contracts.
AB698,26 23Section 26. 126.41 (6) (ar) of the statutes is created to read:
AB698,10,3
1126.41 (6) (ar) Whether the applicant has had any obligations under deferred
2payment contracts, for milk procured in this state, at any time since the beginning
3of the applicant's last completed fiscal year.
AB698,27 4Section 27. 126.41 (6) (br) 4. of the statutes is created to read:
AB698,10,65 126.41 (6) (br) 4. The amount of payments under subd. 3. made under deferred
6payment contracts.
AB698,28 7Section 28. 126.41 (9) (intro.) of the statutes is renumbered 126.47 (5m)
8(intro.) and amended to read:
AB698,10,119 126.47 (5m) (intro.) A milk contractor who files and maintains is required to
10file or maintain
security under s. 126.47 this section shall provide a monthly report
11to the department containing either all of the following:
AB698,29 12Section 29. 126.41 (9) (a) of the statutes is renumbered 126.47 (5m) (b) 1.
AB698,30 13Section 30. 126.41 (9) (b) of the statutes is renumbered 126.47 (5m) (b) 2.
AB698,31 14Section 31. 126.44 (1) (a) of the statutes is renumbered 126.44 (1) (a) (intro.)
15and amended to read:
AB698,10,2016 126.44 (1) (a) (intro.) A milk contractor shall file an annual financial statement
17with the department, before the department first licenses the milk contractor under
18s. 126.41 (1), unless the milk contractor reports no more than 150,000
19hundredweight of milk under s. 126.41 (6) (bg).
if the milk contractor's license
20application shows any of the following:
AB698,32 21Section 32. 126.44 (1) (a) 1. of the statutes is created to read:
AB698,10,2322 126.44 (1) (a) 1. That the amount of producer milk reported under s. 126.41 (6)
23(bg) exceeds 150,000 hundredweight.
AB698,33 24Section 33. 126.44 (1) (a) 2. of the statutes is created to read:
AB698,11,3
1126.44 (1) (a) 2. Any deferred payment contract obligations under s. 126.41 (6)
2(ar) to a milk producer or producer agent that has not, under s. 126.70 (1) (b),
3permanently waived eligibility to file a default claim against the milk contractor.
AB698,34 4Section 34. 126.44 (1) (b) of the statutes is renumbered 126.44 (1) (b) (intro.)
5and amended to read:
AB698,11,96 126.44 (1) (b) (intro.) Except as provided in par. (c) or (d), a milk contractor
7licensed under s. 126.41 (1) shall file an annual financial statement with the
8department during each license year. The if the milk contractor's license application
9for that year shows any of the following:
AB698,11,14 10(cm) A milk contractor shall file the an annual financial statement under par.
11(b)
by the 15th day of the 4th month following the close of the milk contractor's fiscal
12year. The department may extend the filing deadline for up to 30 days if the milk
13contractor, or the accountant preparing the financial statement, files a written
14extension request at least 10 days before the filing deadline.
AB698,35 15Section 35. 126.44 (1) (b) 1. of the statutes is created to read:
AB698,11,1816 126.44 (1) (b) 1. That the amount of producer milk reported under s. 126.41 (6)
17(bg) exceeds 150,000 hundredweight and the milk contractor is not a contributing
18milk contractor who procures milk in this state solely as a producer agent.
AB698,36 19Section 36. 126.44 (1) (b) 2. of the statutes is created to read:
AB698,11,2220 126.44 (1) (b) 2. Any deferred payment contract obligations under s. 126.41 (6)
21(ar) to a milk producer or producer agent that has not, under s. 126.70 (1) (b),
22permanently waived eligibility to file a default claim against the milk contractor.
AB698,37 23Section 37. 126.44 (1) (c) of the statutes is repealed.
AB698,38 24Section 38. 126.44 (1) (d) of the statutes is amended to read:
AB698,12,9
1126.44 (1) (d) Rather than filing an annual financial statement under par. (b),
2a milk contractor who is disqualified under s. 126.45 (3) (a) may file, during each
3fiscal year, a compilation of financial information that is satisfactory to the
4department along with the milk contractor's sworn and notarized statement that the
5financial information is correct
. The milk contractor shall file the financial
6information by the 15th day of the 4th month following the close of the milk
7contractor's fiscal year. The department may extend the filing deadline for up to 30
8days if the milk contractor, or an accountant preparing the financial information,
9files a written extension request at least 10 days before the filing deadline.
AB698,39 10Section 39. 126.44 (1) (e) of the statutes is created to read:
AB698,12,1411 126.44 (1) (e) 1. Except as provided in subd. 2., a milk contractor licensed under
12s. 126.41 may not incur any obligations under a deferred payment contract for milk
13procured in this state unless the contractor first notifies the department and files an
14annual financial statement with the department.
AB698,12,1915 2. A milk contractor licensed under s. 126.41 is not required to notify the
16department or file an annual financial statement with the department under subd.
171. for an obligation incurred under a deferred payment contract, for milk procured
18in this state, with a milk producer or producer agent that has, under s. 126.70 (1) (b),
19permanently waived eligibility to file a default claim against the milk contractor.
AB698,40 20Section 40. 126.44 (3) of the statutes is amended to read:
AB698,13,321 126.44 (3) Quarterly financial statements. A milk contractor licensed under
22s. 126.41 (1) who is not a contributing milk contractor shall file quarterly financial
23statements with the department for the first 3 quarters in each of the milk
24contractor's fiscal years. The milk contractor shall file each quarterly financial
25statement no later than 60 days after the end of the fiscal quarter to which the

1financial statement pertains. With each quarterly financial statement, the milk
2contractor shall include the milk contractor's sworn and notarized statement that
3the financial statement is correct.
AB698,41 4Section 41. 126.44 (6m) of the statutes is amended to read:
AB698,13,105 126.44 (6m) Interim financial statement. The department may, at any time,
6require a milk contractor licensed under s. 126.41 (1) to file an interim financial
7statement with the department. With the interim financial statement, the milk
8contractor shall provide the milk contractor's sworn and notarized statement that
9the financial statement is correct.
An interim financial statement need not be a
10reviewed financial statement or an audited financial statement.
AB698,42 11Section 42. 126.46 (1) of the statutes is amended to read:
AB698,13,1512 126.46 (1) General. A contributing milk contractor shall pay an annual fund
13assessment for each license year, including an assessment for deferred payment
14contracts entered into under s. 126.485,
in the amount specified by the department
15by rule.
AB698,43 16Section 43. 126.46 (5m) (a) (intro.) of the statutes is renumbered 126.46 (5m)
17(a) and amended to read:
AB698,13,2018 126.46 (5m) (a) Divide the amount of security that the milk contractor is
19required to file under s. 126.47 (3) (b) by 75 percent of the following: the amount of
20the milk contractor's estimated default exposure.
AB698,44 21Section 44. 126.46 (5m) (a) 1. of the statutes is repealed.
AB698,45 22Section 45. 126.46 (5m) (a) 2. of the statutes is repealed.
AB698,46 23Section 46. 126.47 (1) (ae) of the statutes is created to read:
AB698,14,624 126.47 (1) (ae) A milk contractor who reports any deferred payment contract
25obligations under s. 126.41 (6) (ar) or 126.44 (1) (e) 1., other than deferred payment

1contract obligations to a milk producer or producer agent that has, under s. 126.70
2(1) (b), permanently waived eligibility to file a default claim against the milk
3contractor, shall file security with the department, and maintain that security until
4the department releases it under sub. (7) (ae), unless the milk contractor's annual
5financial statement under s. 126.44 (1) shows that the milk contractor has positive
6equity and a debt to equity ratio of not more than 4.0 to 1.0.
AB698,47 7Section 47. 126.47 (1) (b) 1. (intro.) of the statutes is renumbered 126.40 (7e)
8(intro.) and amended to read:
AB698,14,109 126.40 (7e) (intro.) In this paragraph, “ estimated “Estimated default exposure"
10means 75 percent the sum of the following:
AB698,48 11Section 48. 126.47 (1) (b) 1. a. of the statutes is renumbered 126.40 (7e) (a) 1.
12and amended to read:
AB698,14,1613 126.40 (7e) (a) 1. If the milk contractor reports unpaid milk payroll obligations
14under s. ss. 126.41 (6) (b) 1. and (9) (a) 126.47 (5m) (b) 1., the highest amount of
15unpaid milk payroll obligations, reported under s. 126.41 (6) (b) 1. or (9) (a) 126.47
16(5m) (b) 1.
, that the milk contractor had at any time during the last 12 months.
AB698,49 17Section 49. 126.47 (1) (b) 1. b. of the statutes is renumbered 126.40 (7e) (a) 2.
18and amended to read:
AB698,14,2219 126.40 (7e) (a) 2. If the milk contractor reports monthly milk payroll
20obligations under s. ss. 126.41 (6) (b) 2. and (9) (b) 126.47 (5m) (b) 2., the highest
21amount of milk payroll obligations, reported under s. 126.41 (6) (b) 2. or (9) (b) 126.47
22(5m) (b) 2.
, that the milk contractor incurred in any month during the last 12 months.
AB698,50 23Section 50. 126.47 (1) (b) 2. of the statutes is renumbered 126.47 (1) (b).
AB698,51 24Section 51. 126.47 (3) (a) (intro.) of the statutes is renumbered 126.47 (3) (a)
25and amended to read:
AB698,15,4
1126.47 (3) (a) Except as provided in par. (b), a A milk contractor who is required
2to file or maintain security under sub. (1) (a) shall at all times maintain security in
3an amount at least equal to at least 75 percent of the following: the milk contractor's
4estimated default exposure.
AB698,52 5Section 52. 126.47 (3) (a) 1. of the statutes is repealed.
AB698,53 6Section 53. 126.47 (3) (a) 2. of the statutes is repealed.
AB698,54 7Section 54. 126.47 (3) (ae) of the statutes is created to read:
AB698,15,158 126.47 (3) (ae) A milk contractor who is required to file or maintain security
9under sub. (1) (ae) shall at all times maintain security that is at least equal to the
10milk contractor's highest total, at any time during the preceding 12 months, of
11unpaid obligations for producer milk procured in this state under a deferred payment
12contract, excluding any unpaid obligation under a deferred payment contract, for
13milk procured in this state, with a milk producer or producer agent that has, under
14s. 126.70 (1) (b), permanently waived eligibility to file a default claim against the
15milk contractor.
AB698,55 16Section 55. 126.47 (3) (b) of the statutes is amended to read:
AB698,15,1917 126.47 (3) (b) A milk contractor who is required to file or maintain security only
18under sub. (1) (b) shall at all times maintain security at least equal to the milk
19contractor's estimated default exposure, as defined in sub. (1) (b) 1., less $20,000,000.
AB698,56 20Section 56. 126.47 (3) (c) of the statutes is created to read:
AB698,15,2421 126.47 (3) (c) If more than one of pars. (a) to (b) applies to a milk contractor,
22the milk contractor shall at all times maintain security at least equal to the greatest
23amount of security that the milk contractor is required to maintain under any one
24of pars. (a) to (b).
AB698,57 25Section 57. 126.47 (5m) (title) of the statutes is created to read:
AB698,16,1
1126.47 (5m) (title) Monthly reports.
AB698,58 2Section 58. 126.47 (5m) (a) of the statutes is created to read:
AB698,16,83 126.47 (5m) (a) The milk contractor's total unpaid obligations at the end of the
4previous month for producer milk procured in this state under a deferred payment
5contract, excluding any unpaid obligation under a deferred payment contract, for
6milk procured in this state, with a milk producer or producer agent that has, under
7s. 126.70 (1) (b), permanently waived eligibility to file a default claim against the
8milk contractor.
AB698,59 9Section 59. 126.47 (5m) (b) (intro.) of the statutes is created to read:
AB698,16,1010 126.47 (5m) (b) (intro.) Either of the following:
AB698,60 11Section 60. 126.47 (7) (a) (intro.) of the statutes is amended to read:
AB698,16,1412 126.47 (7) (a) (intro.) The department may release security filed under sub. (1)
13(a), except for any amount of security that the milk contractor is required to file under
14sub. (1) (ae) or (b),
if any of the following applies:
AB698,61 15Section 61. 126.47 (7) (ae) of the statutes is created to read:
AB698,16,1816 126.47 (7) (ae) The department may release security filed under sub. (1) (ae),
17except for any amount of security that the milk contractor is required to file under
18sub. (1) (a) or (b), if any of the following applies:
AB698,16,2019 1. The milk contractor has not had any deferred payment contract obligations
20since the beginning of the milk contractor's last completed fiscal year.
AB698,16,2321 2. The milk contractor files 2 consecutive annual financial statements under
22s. 126.44 showing that the milk contractor meets the applicable equity requirement
23and debt to equity ratio under sub. (1) (ae).
AB698,62 24Section 62. 126.47 (7) (am) of the statutes is amended to read:
AB698,17,6
1126.47 (7) (am) The department may release security filed under sub. (1) (b),
2except for any amount of security that the milk contractor is required to file because
3sub. (1) (a) or (ae) applies to the milk contractor, if the milk contractor files 2
4consecutive annual financial statements under s. 126.44 showing that the milk
5contractor no longer has negative equity, a current ratio of less than 1.25 to 1.0, or
6a debt to equity ratio of more than 2.0 to 1.0.
AB698,63 7Section 63. 126.48 (1) of the statutes is amended to read:
AB698,17,148 126.48 (1) First monthly payment. By Except as provided under the terms of
9a deferred payment contract that satisfies the requirements under s. 126.485, by
the
104th day of each month, a milk contractor shall pay for producer milk received during
11the first 15 days of the preceding month. The milk contractor shall base the payment
12on an estimated price that is at least 80 percent of the class III price published by the
13regional federal milk market administrator for the month preceding the month in
14which the milk is received, or 80 percent of the contract price, whichever is greater.
AB698,64 15Section 64. 126.48 (2) of the statutes is amended to read:
AB698,17,1916 126.48 (2) Second monthly payment. By Except as provided under the terms
17of a deferred payment contract that satisfies the requirements under s. 126.485, by

18the 19th day of each month, a milk contractor shall pay the balance due for producer
19milk received during the preceding month.
AB698,65 20Section 65. 126.48 (3) of the statutes is renumbered 126.487, and 126.487
21(intro.), as renumbered, is amended to read:
AB698,18,2 22126.487 Payment explanation. (intro.) The department may, by rule,
23require a milk contractor to provide a milk producer or producer agent with a written
24explanation of each payment under this section s. 126.48 or of each deferred payment

1under s. 126.485
. The department may specify the content of the explanation,
2including information related to any of the following:
AB698,66 3Section 66. 126.485 of the statutes is created to read:
AB698,18,8 4126.485 Milk contractors; deferred payment contracts. (1) Contract in
5writing.
A milk contractor may not procure milk from any milk producer or producer
6agent under a deferred payment contract before the contract is reduced to writing
7and signed by the parties. The milk contractor shall provide a copy of the signed
8contract to the other party.
AB698,18,10 9(2) Contents of contract. A milk contractor may not enter into a deferred
10payment contract unless the deferred payment contract includes all of the following:
AB698,18,1111 (a) A unique contract identification number.
AB698,18,1312 (b) The specific payments required under s. 126.48 (1) or (2), or portion thereof,
13that are deferred under the contract.
AB698,18,1514 (c) The date by which the milk contractor agrees to make full payment for the
15milk.
AB698,18,1616 (d) The milk contractor's permanent business location.
AB698,18,2117 (e) A statement in clear and conspicuous print immediately above the contract
18signature line stating: “The milk contractor (buyer) becomes the owner of any milk
19that the producer or producer agent (seller) delivers to the milk contractor under this
20contract. The producer or producer agent relinquishes ownership and control of the
21milk, and may become an unsecured creditor pending payment.”
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