Public Act 93-0225
HB1458 Enrolled LRB093 03693 RCE 07393 b
AN ACT concerning agriculture.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Grain Code is amended by changing
Sections 1-5, 1-10, 1-15, 1-20, 1-25, 5-5, 5-10, 5-15, 5-20,
5-25, 5-30, 10-5, 10-10, 10-15, 10-20, 15-15, 15-20, 15-30,
15-35, 15-40, 15-45, 20-10, 20-15, 20-20, 25-5, 25-10, 25-20,
30-5, and 30-10 and by adding Section 30-25 and Article 35 as
follows:
(240 ILCS 40/1-5)
Sec. 1-5. Purpose. The Illinois grain industry
comprises a significant and vital part of the State's
economy. The grain industry can function to its fullest
competitive and profitable potential, thus contributing to
the economic health of this State, when it operates under a
coordinated and integrated structure. The purpose of this
Code is to provide a single system of governmental regulation
of the Illinois grain industry. It is also the primary
purpose of this Code to promote the State's welfare by
improving the economic stability of agriculture through the
existence of the Illinois Grain Insurance Fund in order to
protect producers in the event of the failure of a licensed
grain dealer or licensed warehouseman and to ensure the
existence of an adequate resource so that persons holding
valid claims may be compensated for losses occasioned by the
failure of a licensed grain dealer or licensed warehouseman.
To that end, this Code shall be liberally construed and
liberally administered in favor of claimants.
In addition, the Illinois grain industry comprises a
significant and vital part of the State's economy and as such
can function to its fullest competitive and profitable
potential, thus contributing to the economic health of this
State, when it operates under a coordinated and integrated
regulatory structure. Thus, a further purpose of this Code is
to provide a single system of governmental regulation of the
Illinois grain industry.
(Source: P.A. 89-287, eff. 1-1-96.)
(240 ILCS 40/1-10)
Sec. 1-10. Definitions. As used in this Act:
"Board" means the governing body of the Illinois Grain
Insurance Corporation.
"Certificate" means a document, other than the license,
issued by the Department that certifies that a grain dealer's
license has been issued and is in effect.
"Claimant" means:
(a) a person, including, without limitation, a lender:
(1) who possesses warehouse receipts issued from an
Illinois location covering grain owned or stored by a
failed warehouseman; or
(2) who has other written evidence of a storage
obligation of a failed warehouseman issued from an
Illinois location in favor of the holder, including, but
not limited to, scale tickets, settlement sheets, and
ledger cards; or
(3) who has loaned money to a warehouseman and was
to receive a warehouse receipt issued from an Illinois
location as security for that loan, who surrendered
warehouse receipts as part of a grain sale at an Illinois
location, or who delivered grain out of storage with the
warehouseman as part of a grain sale at an Illinois
location; and
(i) the grain dealer or warehouseman failed
within 21 days after the loan of money, the
surrender of warehouse receipts, or the delivery of
grain, as the case may be, and no warehouse receipt
was issued or payment in full was not made on the
grain sale, as the case may be; or
(ii) written notice was given by the person to
the Department within 21 days after the loan of
money, the surrender of warehouse receipts, or the
delivery of grain, as the case may be, stating that
no warehouse receipt was issued or payment in full
made on the grain sale, as the case may be; or
(b) a producer not included in item (a)(3) in the
definition of "Claimant" who possesses evidence of the sale
at an Illinois location of grain delivered to a failed grain
dealer, or its designee in Illinois and who was not paid in
full.
"Class I warehouseman" means a warehouseman who is
authorized to issue negotiable and non-negotiable warehouse
receipts.
"Class II warehouseman" means a warehouseman who is
authorized to issue only non-negotiable warehouse receipts.
"Code" means this the Grain Code.
"Collateral" means:
(a) irrevocable letters of credit;
(b) certificates of deposit;
(c) cash or a cash equivalent; or
(d) any other property acceptable to the Department to
the extent there exists equity in that property. For the
purposes of this item (d), "equity" is the amount by which
the fair market value of the property exceeds the amount owed
to a creditor who has a valid, prior, perfected security
interest in or other valid, prior, perfected lien on the
property.
"Corporation" means the Illinois Grain Insurance
Corporation.
"Daily position record" means a grain inventory
accountability record maintained on a daily basis that
includes an accurate reflection of changes in grain
inventory, storage obligations, company-owned inventory by
commodity, and other information that is required by the
Department.
"Daily grain transaction report" means a record of the
daily transactions of a grain dealer showing the amount of
all grain received and shipped during each day and the amount
on hand at the end of each day.
"Date of delivery of grain" means:
(a) the date grain is delivered to a grain dealer, or
its designee in Illinois, for the purpose of sale;
(b) the date grain is delivered to a warehouseman, or
its designee in Illinois, for the purpose of storage; or
(c) in reference to grain in storage with a
warehouseman, the date a warehouse receipt representing
stored grain is delivered to the issuer of the warehouse
receipt for the purpose of selling the stored grain or, if no
warehouse receipt was issued:
(1) the date the purchase price for stored grain is
established; or
(2) if sold by price later contract, the date of
the price later contract.
"Department" means the Illinois Department of
Agriculture.
"Depositor" means a person who has evidence of a storage
obligation from a warehouseman.
"Director", unless otherwise provided, means the Illinois
Director of Agriculture, or the Director's designee.
"Electronic document" means a document that is generated,
sent, received, or stored by electrical, digital, magnetic,
optical electromagnetic, or any other similar means,
including, but not limited to, electronic data interchange,
electronic mail, telegram, telex, or telecopy.
"Electronic warehouse receipt" means a warehouse receipt
that is issued or transmitted in the form of an electronic
document.
"Emergency storage" means space measured in bushels and
used for a period of time not to exceed 3 months for storage
of grain as a consequence of an emergency situation.
"Equity assets" means:
(a) The equity in any property of the licensee or failed
licensee, other than grain assets. For purposes of this item
(a):
(1) "equity" is the amount by which the fair market
value of the property exceeds the amount owed to a
creditor who has a valid security interest in or other
valid lien on the property that was perfected before the
date of failure of the licensee;
(2) a creditor is not deemed to have a valid
security interest or other valid lien on property if (i)
the property can be directly traced as being from the
sale of grain by the licensee or failed licensee; (ii)
the security interest was taken as additional collateral
on account of an antecedent debt owed to the creditor;
and (iii) the security interest or other lien was
perfected (A) on or within 90 days before the date of
failure of the licensee or (B) when the creditor is a
related person, within one year of the date of failure of
the licensee.
"Failure" means, in reference to a licensee:
(a) a formal declaration of insolvency;
(b) a revocation of a license;
(c) a failure to apply for license renewal, leaving
indebtedness to claimants;
(d) a denial of license renewal, leaving indebtedness to
claimants; or
(e) a voluntary surrender of a license, leaving
indebtedness to claimants.
"Federal warehouseman" means a warehouseman licensed by
the United States government under the United States
Warehouse Act (7 U.S.C. 241 et seq.).
"Fund" means the Illinois Grain Insurance Fund.
"Grain" means corn, soybeans, wheat, oats, rye, barley,
grain sorghum, canola, buckwheat, flaxseed, edible soybeans,
and other like agricultural commodities that may be
designated by rule.
"Grain assets" means:
(a) all grain owned and all grain stored by a licensee
or failed licensee, wherever located, including redeposited
grain of a licensee or failed licensee;
(b) (blank) redeposited grain of a licensee or failed
licensee;
(c) identifiable proceeds, including, but not limited
to, insurance proceeds, received by or due to a licensee or
failed licensee resulting from the sale, exchange,
destruction, loss, or theft of grain, or other disposition of
grain by the licensee or failed licensee; or
(d) assets in hedging or speculative margin accounts
held by commodity or security exchanges on behalf of a
licensee or failed licensee and any moneys due or to become
due to a licensee or failed licensee, less any secured
financing directly associated with those assets or moneys,
from any transactions on those exchanges.
For purposes of this Act, storage charges, drying
charges, price later contract service charges, and other
grain service charges received by or due to a licensee or
failed licensee shall not be deemed to be grain assets, nor
shall such charges be deemed to be proceeds from the sale or
other disposition of grain by a licensee or a failed
licensee, or to have been directly or indirectly traceable
from, to have resulted from, or to have been derived in whole
or in part from, or otherwise related to, the sale or other
disposition of grain by the licensee or failed licensee.
"Grain dealer" means a person who is licensed by the
Department to engage in the business of buying grain from
producers.
"Grain Indemnity Trust Account" means a trust account
established by the Director under Section 205-410 of the
Department of Agriculture Law (20 ILCS 205/205-410) that is
used for the receipt and disbursement of moneys paid from the
Fund and proceeds from the liquidation of and collection upon
grain assets, equity assets, collateral, and or guarantees of
or relating to failed licensees. The Grain Indemnity Trust
Account shall be used to pay valid claims, authorized refunds
from the Fund, and expenses incurred in preserving,
liquidating, and collecting upon grain assets, equity assets,
collateral, and guarantees relating to failed licensees.
"Guarantor" means a person who assumes all or part of the
obligations of a licensee to claimants.
"Guarantee" means a document executed by a guarantor by
which the guarantor assumes all or part of the obligations of
a licensee to claimants.
"Incidental grain dealer" means a grain dealer who
purchases grain only in connection with a feed milling
operation and whose total purchases of grain from producers
during the grain dealer's fiscal year do not exceed $100,000.
"Licensed storage capacity" means the maximum grain
storage capacity measured in bushels approved by the
applicable licensing agency for use by a warehouseman.
"Licensee" means a grain dealer or warehouseman who is
licensed by the Department and a federal warehouseman that is
a participant in the Fund, under subsection (c) of Section
30-10.
"Official grain standards" means the official grade
designations as adopted by the United States Department of
Agriculture under the United States Grain Standards Act and
regulations adopted under that Act (7 U.S.C. 71 et seq. and 7
CFR 810.201 et seq.).
"Permanent storage capacity" means the capacity of
permanent structures available for storage of grain on a
regular and continuous basis, and measured in bushels.
"Person" means any individual or entity, including, but
not limited to, a sole proprietorship, a partnership, a
corporation, a cooperative, an association, a limited
liability company, an estate, or a trust, or a governmental
agency.
"Price later contract" means a written contract for the
sale of grain whereby any part of the purchase price may be
established by the seller after delivery of the grain to a
grain dealer according to a pricing formula contained in the
contract. Title to the grain passes to the grain dealer at
the time of delivery. The precise form and the general terms
and conditions of the contract shall be established by rule.
"Producer" means the owner, tenant, or operator of land
who has an interest in and receives all or part of the
proceeds from the sale of the grain produced on the land.
"Producer protection holding corporation" means a holding
corporation to receive, hold title to, and liquidate assets
of or relating to a failed licensee, including assets in
reference to collateral or guarantees relating to a failed
licensee.
"Regulatory Fund" means the fund created under Article
35.
"Related persons" means affiliates of a licensee, key
persons of a licensee, owners of a licensee, and persons who
have control over a licensee. For the purposes of this
definition:
(a) "Affiliate" means a person who has direct or
indirect control of a licensee, is controlled by a
licensee, or is under common control with a licensee.
(b) "Key person" means an officer, a director, a
trustee, a partner, a proprietor, a manager, a managing
agent, or the spouse of a licensee. An officer or a
director of an entity organized or operating as a
cooperative, however, shall not be considered to be a
"key person".
(c) "Owner" means the holder of: over 10% of the
total combined voting power of a corporation or over 10%
of the total value of shares of all classes of stock of a
corporation; over a 10% interest in a partnership; over
10% of the value of a trust computed actuarially; or over
10% of the legal or beneficial interest in any other
business, association, endeavor, or entity that is a
licensee. For purposes of computing these percentages, a
holder is deemed to own stock or other interests in a
business entity whether the ownership is direct or
indirect.
(d) "Control" means the power to exercise authority
over or direct the management or policies of a business
entity.
(e) "Indirect" means an interest in a business held
by the holder not through the holder's actual holdings in
the business, but through the holder's holdings in
another business or other businesses.
(f) Notwithstanding any other provision of this
Act, the term "related person" does not include a lender,
secured party, or other lien holder solely by reason of
the existence of the loan, security interest, or lien, or
solely by reason of the lender, secured party, or other
lien holder having or exercising any right or remedy
provided by law or by agreement with a licensee or a
failed licensee.
"Reserve Fund" means a separate and discrete fund of up
to $2,000,000 held by the Corporation as set forth in Section
30-25.
"Successor agreement" means an agreement by which a
licensee succeeds to the grain obligations of a former
licensee.
"Temporary storage space" means space measured in bushels
and used for 6 months or less for storage of grain on a
temporary basis due to a need for additional storage in
excess of permanent storage capacity.
"Trust account" means the Grain Indemnity Trust Account.
"Valid claim" means a request for payment under the
provisions of this Code claim, submitted by a claimant, the
whose amount and category of which have been determined by
the Department, to the extent that determination is not
subject to further administrative review or appeal. Each
grain sale transaction and each storage obligation shall be
considered a separate and discrete request for payment even
though one or more requests are contained on one claim form
or are filed with the Department in one document.
"Warehouse" means a building, structure, or enclosure in
which grain is stored for the public for compensation,
whether grain of different owners is commingled or whether
identity of different lots of grain is preserved.
"Warehouse receipt" means a receipt for the storage of
grain issued by a warehouseman.
"Warehouseman" means a person who is licensed:
(a) by the Department to engage in the business of
storing grain for compensation; or
(b) under the United States Warehouse Act but who
participates in the Fund under subsection (c) of Section
30-10.
(Source: P.A. 91-213, eff. 7-20-99; 91-239, eff. 1-1-00;
92-16, eff. 6-28-01.)
(240 ILCS 40/1-15)
Sec. 1-15. Powers and duties of Director. The Director
has all powers necessary and proper to fully and effectively
execute the provisions of this Code and has the general duty
to implement this Code. The Director's powers and duties
include, but are not limited to, the following:
(1) The Director may, upon application, issue or refuse
to issue licenses under this Code, and the Director may
extend, renew, reinstate, suspend, revoke, or accept
voluntary surrender of licenses under this Code.
(2) The Director shall examine and inspect each licensee
at least once each calendar year. The examination shall cover
all aspects of the grain operations of the licensee,
including but not necessarily limited to options trades and
programs and farmer marketing programs.
The Department shall perform one of 3 types of
examinations of licensees.
(A) Basic Examination. The basic examination shall
be performed when the licensee's merchandising and trade
practices involve minimal market risk, which might
include those situations in which the licensee uses cash
back-to-back contracts, traditional hedges with the
Chicago Board of Trade, and price later contracts. The
specific components and guidelines of the basic
examination are to be as provided by rule, but shall at a
minimum include verification of grain quality and
quantity, reconciliation of records with grain
transactions, computation of current ratios, and checking
of posting procedures for accuracy.
(B) Intermediate Examination. The intermediate
examination shall be performed when the licensee's
merchandising and trade practices involve an increased
amount of risk, which might include those situations in
which the licensee uses guaranteed minimum price
contracts, purchases options, or writes options. This
examination shall include all those things performed as
part of the basic examination. In addition, the specific
components and guidelines of the intermediate examination
are to be as provided by rule, but shall at a minimum
include verification of grain quality and quantity,
reconciliation of records with grain transactions, and
checking of posting procedures for accuracy.
(C) Advanced Examination. The advanced examination
shall be performed when the licensee's merchandising and
grain trading practices involve the most risk, which
might include those situations in which the licensee has
discretionary trading authority from producers, uses
premium offer type contracts, or has contracts with
producers that cover multiple crop years. This
examination shall include all those things performed as
part of the basic examination and the intermediate
examination. In addition, the specific components and
guidelines of the advanced examination are to be provided
by rule, but shall at a minimum include grain market risk
evaluation and appropriate levels thereof for the
licensee and adequacy of internal controls.
Using these guidelines, the Department shall determine
the level of examination to be applied to each licensee. In
addition, the Department may, in its sole discretion, engage
the services of accounting experts, grain risk management
experts, or both as part of any intermediate or advanced
examination. The Regulatory Fund may be used as a source of
payment for the services of accounting experts, grain risk
management experts, or both.
The Director may inspect the premises used by a licensee
at any time. The books, accounts, records, and papers of a
licensee are at all times during business hours subject to
inspection by the Director. Each licensee may also be
required to make reports of its activities, obligations, and
transactions that are deemed necessary by the Director to
determine whether the interests of producers and the holders
of warehouse receipts are adequately protected and
safeguarded. The Director may take action or issue orders
that in the opinion of the Director are necessary to prevent
fraud upon or discrimination against producers or depositors
of grain by a licensee. The sole and exclusive means of
halting the warehouse and grain dealer business activities of
a licensee, however, are set forth in Section 15-40 relating
to suspension and revocation of licenses.
(3) The Director may, upon his or her initiative or upon
the written verified complaint of any person setting forth
facts that if proved would constitute grounds for a refusal
to issue or renew a license or for a suspension or revocation
of a license, investigate the actions of any person applying
for, holding, or claiming to hold a license or any related
party of that person.
(4) The Director (but not the Director's designee) may
issue subpoenas and bring before the Department any person
and take testimony either at an administrative hearing or by
deposition with witness fees and mileage fees and in the same
manner as prescribed in the Code of Civil Procedure. The
Director or the Director's designee may administer oaths to
witnesses at any proceeding that the Department is authorized
by law to conduct. The Director (but not the Director's
designee) may issue subpoenas duces tecum to command the
production of records relating to a licensee, guarantor,
related business, related person, or related party. Subpoenas
are subject to the rules of the Department.
(5) Notwithstanding other judicial remedies, the
Director may file a complaint and apply for a temporary
restraining order or preliminary or permanent injunction
restraining or enjoining any person from violating or
continuing to violate this Code or its rules.
(6) The Director shall act as Trustee for the Trust
Account, act as Trustee over all collateral, guarantees,
grain assets, and equity assets held by the Department for
the benefit of claimants, and exercise certain powers and
perform related duties under Section 20-5 of this Code and
Section 205-410 of the Department of Agriculture Law (20 ILCS
205/205-410), except that the provisions of the Trust and
Trustees Act do not apply to the Trust Account or any other
trust created under this Code.
(7) The Director shall personally serve as president of
the Corporation.
(8) The Director shall collect and deposit all monetary
penalties, printer registration fees, funds, and assessments
authorized under this Code into the Fund.
(9) The Director may initiate any action necessary to
pay refunds from the Fund. The Director may initiate refunds
for errors of assessments that do not exceed $2,000 per
licensee, lender, or grain seller without authorization by
the Board.
(10) The Director shall maintain a holding corporation
to receive, hold title to, and liquidate assets of or
relating to a failed licensee, including assets in reference
to collateral or guarantees, and deposit the proceeds into
the Fund.
(11) The Director may initiate, participate in, or
withdraw from any proceedings to liquidate and collect upon
grain assets, equity assets, collateral, and guarantees
relating to a failed licensee, including, but not limited to,
all powers needed to carry out the provisions of Section
20-15.
(12) The Director, as Trustee or otherwise, may take any
action that may be reasonable or appropriate to enforce this
Code and its rules.
(Source: P.A. 91-213, eff. 7-20-99; 91-239, eff. 1-1-00;
92-16, eff. 6-28-01.)
(240 ILCS 40/1-20)
Sec. 1-20. Administrative review and venue. Final
administrative decisions of the Department are subject to
judicial review under Article III of the Code of Civil
Procedure and its rules. The term "administrative decision"
is defined as in Section 3-101 of the Code of Civil
Procedure. An action to review a final administrative
decision under this Code may be commenced in the Circuit
Court of any county in which any part of the transaction
occurred that gave rise to the claim that was the subject of
the proceedings before the Department.
(Source: P.A. 89-287, eff. 1-1-96.)
(240 ILCS 40/1-25)
Sec. 1-25. Rules. The Department may promulgate rules
that are necessary for the implementation and administration
of this Code.
The Department shall adopt rules governing electronic
systems under which electronic warehouse receipts may be
issued and transferred. Licensees shall not be required,
however, to issue or use electronic warehouse receipts. These
rules shall be adopted after the United States Department of
Agriculture adopts regulations concerning an electronic
receipt transfer system pursuant to 7 U.S.C. 242, 250.
(Source: P.A. 89-287, eff. 1-1-96.)
(240 ILCS 40/5-5)
Sec. 5-5. Licenses required; applications; exemptions.
(a) Except as provided in subsection (e), a person may
not engage in the business of buying grain from producers, or
storing grain for compensation, as a grain dealer, an
incidental grain dealer, or a warehouseman in the State of
Illinois without a license issued by the Department, or in
the case of a federal warehouseman, by the United States
government.
(b) An application for a license shall be filed with the
Department, shall be in a form prescribed by the Department,
and shall set forth the name of the applicant, the directors
and officers if the applicant is a corporation, the partners
if the applicant is a partnership, the members of the
governing body and all persons with management or supervisory
authority if the applicant is an entity other than a
corporation or partnership, the location of the principal
office or place of business of the applicant, the location of
the principal office or place of business of the applicant in
Illinois, and the location or locations in Illinois at which
the applicant proposes to engage in business as a licensee,
the fiscal year of the applicant, the kind of grain that the
applicant proposes to buy, handle, or store, the type of
business that the applicant proposes to conduct, and
additional information that the Department may require by
rule.
(c) The application for a warehouseman shall state
whether the applicant proposes to store grain only for others
or for the applicant and for others and shall also state the
storage capacity for which the applicant desires to be
licensed.
(d) If an applicant has been engaged in business as a
grain dealer for one year or more, the application shall
state the aggregate dollar amount paid to producers for grain
during the applicant's last completed fiscal year. If the
applicant has been engaged in business for less than one year
or has not engaged in the business of buying grain from
producers as a grain dealer, the application shall state the
estimated aggregate dollar amount to be paid by the applicant
to producers for grain purchased from producers during the
applicant's first fiscal year.
(e) The following persons are exempt from being licensed
as a grain dealer or incidental grain dealer:
(1) A person purchasing grain from producers only
for resale as agricultural seed.
(2) A producer purchasing grain from producers only
for its own use as seed or feed.
(Source: P.A. 89-287, eff. 1-1-96.)
(240 ILCS 40/5-10)
Sec. 5-10. Financial statement and fee requirements to
obtain or amend a license.
(a) Applications for a new license to operate as a Class
I warehouseman or grain dealer shall be accompanied by each
of the following:
(1) A financial statement made within 90 days after
the applicant's fiscal year end and prepared in
conformity with generally accepted accounting principles
following an examination conducted in accordance with
generally accepted auditing standards that has attached
the unqualified opinion, or a qualified opinion if the
qualification, in the sole discretion of the Department,
does not unduly diminish the financial stability of the
licensee or applicant, , or other opinion acceptable to
the Department, of an independent certified public
accountant licensed under Illinois law or an entity
permitted to engage in the practice of public accounting
under item (b)(3) of Section 14 of the Illinois Public
Accounting Act.
(A) If the applicant has been engaged in
business prior to the application, the financial
statement shall set forth the financial position and
results in operations for the most recent fiscal
year of the applicant. The financial statement
shall consist of a balance sheet, statement of
income, statement of retained earnings, statement of
cash flows, notes to financial statements, and other
information as required by the Department.
(B) If the applicant has not been engaged in
business prior to the application, the financial
statement shall consist of a balance sheet, notes to
financial statements, and other information as
required by the Department.
(2) An application fee of $200 $100 for each
license, $100 of which shall be deposited into the
General Revenue Fund and the balance of which shall be
deposited into the Regulatory Fund.
(3) A fee for each required certificate. The
amount of the fee for each certificate shall be
established by rule. Fees shall be deposited into the
Regulatory Fund.
(b) Applications for a new license to operate as a Class
II warehouseman or incidental grain dealer shall be
accompanied by:
(1) A financial statement prepared in accordance
with the requirements of item (a)(1) of Section 5-10 or,
instead, a financial statement made within 90 days of the
date of the application prepared or certified by an
independent accountant and verified under oath by the
applicant. The financial statement shall set forth the
balance sheet and other information with respect to the
financial resources of the applicant that the Department
may require. If the applicant has been engaged in
business prior to the application, the financial
statement shall also set forth a statement of income of
the applicant.
(2) An application fee of $150 $100 for each
license, $100 of which shall be deposited into the
General Revenue Fund and the balance of which shall be
deposited into the Regulatory Fund.
(3) A fee for each required certificate. The
amount of the fee for each certificate shall be
established by rule. Fees shall be deposited into the
Regulatory Fund.
(c) Applications to amend a warehouseman's licensed
storage capacity, including applications in reference to
temporary storage and emergency storage or to otherwise amend
a license, shall be accompanied by a filing fee of $100, $50
of which shall be deposited into the General Revenue Fund and
the balance of which shall be deposited into the Regulatory
Fund $50.
(Source: P.A. 89-287, eff. 1-1-96.)
(240 ILCS 40/5-15)
Sec. 5-15. Renewal of license.
(a) The application for renewal of a license shall be
filed with the Department annually within 90 days after the
licensee's fiscal year end. The Department may, upon request
of the licensee, payment of an extension fee of $100 $50, $50
of which shall be deposited into the General Revenue Fund and
the balance of which shall be deposited into the Regulatory
Fund, and delivery to the Department of a preliminary
financial statement compiled reviewed by an independent
certified public accountant licensed under Illinois law or an
entity permitted to engage in the practice of public
accounting under item (b)(3) of Section 14 of the Illinois
Public Accounting Act or, in the case of a Class II
warehouseman or incidental grain dealer, a preliminary
financial statement reviewed by an independent accountant
that meets the financial requirements of subsection (b) of
Section 5-25, extend, for up to but not exceeding 30 days,
the period of time during which the application for renewal
of a license may be filed. The Department, however, may
provide by rule for reducing the filing period for an
application for renewal of a license to no less than 60 days
after the licensee's fiscal year end if the Department
determines that an applicant has financial deficiencies, or
there are other factors, that would create a substantial risk
of failure loss to potential claimants. The Department must
give written notice of the reduced filing period to the
licensee at least 60 days before the earlier deadline imposed
by the Department to file the application for renewal of a
license. Notice is deemed given when mailed by certified
mail, return receipt requested, properly addressed and with
sufficient postage attached.
(b) The application for renewal shall be accompanied by
the financial statement required by Section 5-20.
(c) Failure to meet all of the conditions to renew the
license may result in a denial of renewal of the license. The
licensee may request an administrative hearing to dispute the
denial of renewal, after which the Director shall enter an
order either renewing or refusing to renew the license.
(Source: P.A. 89-287, eff. 1-1-96.)
(240 ILCS 40/5-20)
Sec. 5-20. Financial statement and fee requirements for
the renewal of a license.
(a) Applications for a renewal of a license to operate
as a Class I warehouseman or grain dealer shall be
accompanied by each of the following:
(1) A financial statement made within 90 days after
the applicant's fiscal year end and prepared in
conformity with generally accepted accounting principles
following an examination conducted in accordance with
generally accepted auditing standards that has attached
the unqualified opinion, or a qualified opinion if the
qualification, in the sole discretion of the Department,
does not unduly diminish the financial stability of the
licensee or applicant, , or other opinion acceptable to
the Department, of an independent certified public
accountant licensed under Illinois law or an entity
permitted to engage in the practice of public accounting
under item (b)(3) of Section 14 of the Illinois Public
Accounting Act. The financial statement shall consist of
a balance sheet, statement of income, statement of
retained earnings, statement of cash flows, notes to
financial statements, and other information as required
by the Department. The financial statement shall set
forth the financial position and results in operations
for the most recent fiscal year of the applicant.
(2) A fee of $200 $100 for each license, $100 of
which shall be deposited into the General Revenue Fund
and the balance of which shall be deposited into the
Regulatory Fund.
(3) A fee for each required certificate. The
amount of the fee for each certificate shall be
established by rule. Fees shall be deposited into the
Regulatory Fund.
(b) Applications for a renewal of a license to operate
as a Class II warehouseman or incidental grain dealer shall
be accompanied by each of the following:
(1) A financial statement prepared in accordance
with the requirements of item (a)(1) of Section 5-10 or,
instead, a financial statement made within 90 days after
the date of the application prepared or certified by an
independent accountant and verified under oath by the
applicant. The financial statement shall set forth the
balance sheet and statement of income of the applicant
and other information with respect to the financial
resources of the applicant that the Department may
require.
(2) A fee of $150 $100 for each license, $100 of
which shall be deposited into the General Revenue Fund
and the balance of which shall be deposited into the
Regulatory Fund.
(3) A fee for each required certificate. The
amount of the fee for each certificate shall be
established by rule. Fees shall be deposited into the
Regulatory Fund.
(Source: P.A. 89-287, eff. 1-1-96.)
(240 ILCS 40/5-25)
Sec. 5-25. Licensing standards and requirements. The
Department shall issue, amend, or renew a license if the
Department is satisfied that the applicant or licensee meets
the standards and requirements of this Section. The
standards and requirements of subsections (a) and (b) of this
Section must be observed and complied with at all times
during the term of the license.
(a) General requirements.
(1) The applicant or licensee must have a good
business reputation, have not been involved in improper
manipulation of books and records or other improper
business practices, and have the qualifications and
background essential for the conduct of the business of a
licensee. The Department must be satisfied as to the
business reputation, background, and qualifications of
the management and principal officers of the applicant or
licensee. The Department may obtain criminal histories
of management and principal officers of the applicant or
licensee.
(2) The applicant or licensee must maintain a
permanent business location in the State of Illinois. At
Each location where the licensee is transacting business,
that place of business shall remain open from at least
one-half hour before the daily opening to at least
one-half hour after the daily closing of the Chicago
Board of Trade, unless otherwise approved by the
Department.
(3) The applicant or licensee must have insurance
on all grain in its possession or custody as required in
this Code.
(4) The applicant or licensee shall at all times
keep sufficiently detailed books and records to reflect
compliance with all requirements of this Code. The
Department may require that certain records located
outside the State of Illinois, if any, be brought to a
specified location in Illinois for review by the
Department.
(5) The applicant or licensee and each of its
officers, directors, partners, and managers must not have
been found guilty of a criminal violation of this Code,
any of its predecessor statutes, or any similar or
related statute or law of the United States or any other
state or jurisdiction within 10 3 years of the date of
application for the issuance or renewal of a license.
(6) The applicant or licensee and each of its
officers, directors, managers, and partners, that at any
one time have been a licensee under this Code or any of
its predecessor statutes, or licensed under any similar
or related statute or law of the United States or any
other state or jurisdiction, must not have had its
license terminated or revoked by the Department, by the
United States, or by any other state or jurisdiction,
within 2 years of the date of application for the
issuance or renewal of a license leaving unsatisfied
indebtedness to claimants.
(7) The applicant or licensee and each of its
officers, directors, managers, and partners must not have
been an officer, director, manager, or partner of a
former licensee under this Code or any of its predecessor
statutes, or of a business formerly licensed under any
similar or related statute or law of the United States or
any other state or jurisdiction, that had its license
terminated or revoked by the Department, by the United
States, or by any other state or jurisdiction, within 2
years of the date of application for the issuance or
renewal of a license, leaving unsatisfied indebtedness to
claimants, unless the applicant or licensee makes a
sufficient showing to the Department that the applicable
person or related party was not materially and
substantially involved as a principal in the business
that had its license terminated or revoked. An interim
or temporary manager that is employed by a licensee to
reorganize the licensee or to manage the licensee until
its business is sold, transferred, or liquidated is not
in violation of this subsection (7) solely because of
that employment as an interim or temporary manager.
(b) Financial requirements.
(1) The applicant or licensee's financial statement
must show a current ratio of the total adjusted current
assets to the total adjusted current liabilities of at
least one to one.
(A) Adjusted current assets shall be
calculated by deducting from the stated current
assets shown on the balance sheet submitted by the
applicant or licensee any current asset, as
calculated in item (B) of this subdivision (1),
resulting from notes receivable from related
persons, accounts receivable from related persons,
stock subscriptions receivable, and any other
related person receivables.
(B) A disallowed current asset shall be netted
against any related liability and the net result, if
an asset, shall be subtracted from the current
assets.
(2) The applicant or licensee's financial statement
and balance sheet must show an adjusted debt to adjusted
equity ratio of not more than 3 to one.
(A) Adjusted debt shall be calculated by
totaling current and long-term liabilities and
reducing the total liabilities, up to the amount of
current liabilities, by the liquid assets appearing
in the current asset section of the balance sheet
submitted by the applicant or licensee. For the
purposes of this Section, liquid assets include but
are not limited to cash, depository accounts, direct
obligations of the U.S. Government, marketable
securities, grain assets, balances in margin
accounts, and tax refunds.
(B) Adjusted equity shall be calculated by
deducting from the stated net worth shown on the
balance sheet submitted by the applicant or licensee
any asset, as calculated in item (C) of this
subdivision (2), resulting from notes receivable
from related persons, accounts receivable from
related persons, stock subscriptions receivable, or
any other related person receivables.
(C) A disallowed asset shall be netted against
any related liability and the net result, if an
asset, shall be subtracted from the stated net
worth, or if a liability it shall remain a
liability.
(3) An applicant or licensee must have an adjusted
equity of at least $50,000 as determined by the method
specified in item (b)(2) of this Section. Beginning with
the first fiscal year of a licensee ending after 2004,
the adjusted equity, as defined by the method specified
in item (b)(2) of this Section, shall be increased by
$10,000 per fiscal year until the adjusted equity of an
applicant or licensee is at least $100,000.
(4) For the purposes of this Section, notes
receivable from related persons, accounts receivable from
related persons, and any other related person receivables
are not a disallowed asset if the related person is also
a licensee and meets all of the financial requirements of
this Code.
(5) An applicant for a new license shall not be
permitted to collateralize the requirements of items
(b)(1) and (b)(3) of this Section in order to satisfy the
requirements for a new license.
(Source: P.A. 89-287, eff. 1-1-96.)
(240 ILCS 40/5-30)
Sec. 5-30. Grain Insurance Fund assessments. The
Illinois Grain Insurance Fund is established as a
continuation of the fund created under the Illinois Grain
Insurance Act, now repealed. Licensees, and applicants for a
new license, first sellers of grain to grain dealers at
Illinois locations, and lenders to licensees shall pay
assessments as set forth in this Section.
(a) Subject to subsection (e) of this Section, a
licensee that is newly licensed after the effective date of
this Code shall pay an assessment into the Fund for 3
consecutive years. These assessments are known as "newly
licensed assessments". Except as provided in item (6) of
subsection (b) of this Section, the first installment
assessment shall be paid at the time of or before the
issuance of a new license, the second installment assessment
shall be paid on or before the first anniversary date of the
issuance of the new license, and the third installment
assessment shall be paid on or before the second anniversary
date of the issuance of the new license. For a grain dealer,
the initial payment of each of the 3 installments assessments
shall be based upon the total estimated value of grain
purchases by the grain dealer for the applicable year with
the final installment assessment amount determined as set
forth in item (6) of subsection (b) of this Section. After
the licensee has paid or was required to pay the last 3
installments of the newly licensed assessments first 3
assessments to the Department for payment into the Fund, the
licensee shall be subject to subsequent assessments as set
forth in subsection (d) of this Section.
(b) Grain dealer newly licensed assessments.
(1) The first installment assessment for a grain
dealer shall be an amount equal to:
(A) $0.000145 multiplied by the total value of
grain purchases for the grain dealer's first fiscal
year as shown in the final financial statement for
that year provided to the Department under Section
5-20; and
(B) $0.000255 multiplied by that portion of
the value of grain purchases for the grain dealer's
first fiscal year that exceeds the adjusted equity
of the licensee multiplied by 20, as shown on the
final financial statement for the licensee's first
fiscal year provided to the Department under Section
5-20.
(2) The minimum amount assessment for the first
installment assessment shall be $500 $1,000 and the
maximum shall be $15,000 $10,000.
(3) The second installment assessment for a grain
dealer shall be an amount equal to:
(A) $0.0000725 multiplied by the total value
of grain purchases for the grain dealer's second
fiscal year as shown in the final financial
statement for that year provided to the Department
under Section 5-20; and
(B) $0.0001275 multiplied by that portion of
the value of grain purchases for the grain dealer's
second fiscal year that exceeds the adjusted equity
of the licensee multiplied by 20, as shown on the
final financial statement for the licensee's second
fiscal year provided to the Department under Section
5-20.
(4) The third installment assessment for a grain
dealer shall be an amount equal to:
(A) $0.0000725 multiplied by the total value
of grain purchases for the grain dealer's third
fiscal year as shown in the final financial
statement for that year provided to the Department
under Section 5-20; and
(B) $0.0001275 multiplied by that portion of
the value of grain purchases for the grain dealer's
third fiscal year that exceeds the adjusted equity
of the licensee multiplied by 20, as shown on the
final financial statement for the licensee's third
fiscal year.
(5) The minimum amount of the second and third
installments assessments shall be $250 $500 per year and
the maximum for each year shall be $7,500 $5,000.
(6) Each of the newly licensed first 3 assessments
shall be adjusted up or down based upon the actual annual
grain purchases for each year as shown in the final
financial statement for that year provided to the
Department under Section 5-20. The adjustments shall be
determined by the Department within 30 days of the date
of approval of renewal of a license. Refunds shall be
paid out of the Fund within 60 days after the
Department's determination. Additional amounts owed for
any installment assessments shall be paid within 30 days
after notification by the Department as provided in
subsection (f) of this Section.
(7) For the purposes of grain dealer newly licensed
assessments under subsection (b) of this Section, the
total value of grain purchases shall be the total value
of first time grain purchases by Illinois locations from
producers.
(8) The second and third installments shall be paid
to the Department within 60 days after the date posted on
the written notice of assessment. The Department shall
immediately deposit all paid installments into the Fund.
(c) Warehouseman newly licensed assessments.
(1) The first assessment for a warehouseman shall
be an amount equal to:
(A) $0.00085 multiplied by the total permanent
storage capacity of the warehouseman at the time of
license issuance; and
(B) $0.00099 multiplied by that portion of the
permanent storage capacity of the warehouseman at
the time of license issuance that exceeds the
adjusted equity of the licensee multiplied by 5, all
as shown on the final financial statement for the
licensee provided to the Department under Section
5-10.
(2) The minimum amount assessment for the first
installment assessment shall be $500 $1,000 and the
maximum shall be $15,000 $10,000.
(3) The second and third installments assessments
shall be an amount equal to:
(A) $0.000425 multiplied by the total
permanent storage capacity of the warehouseman at
the time of license issuance; and
(B) $0.000495 multiplied by that portion of
the permanent licensed storage capacity of the
warehouseman at the time of license issuance that
exceeds the adjusted equity of the licensee
multiplied by 5, as shown on the final financial
statement for the licensee's last completed fiscal
year provided to the Department under Section 5-20.
(4) The minimum amount assessment for the second
and third installments assessments shall be $250 $500 per
installment assessment and the maximum for each
installment assessment shall be $7,500 $5,000.
(5) Every warehouseman shall pay an assessment when
increasing available permanent storage capacity in an
amount equal to $0.001 multiplied by the total number of
bushels to be added to permanent storage capacity. The
minimum assessment on any increase in permanent storage
capacity shall be $50 and the maximum assessment shall be
$20,000. The assessment based upon an increase in
permanent storage capacity shall be paid at or before the
time of approval of the increase in permanent storage
capacity. This assessment on the increased permanent
storage capacity does not relieve the warehouseman of any
assessments as set forth in subsection (d) of this
Section.
(6) Every warehouseman shall pay an assessment of
$0.0005 per bushel when increasing available storage
capacity by use of temporary storage space. The minimum
assessment on temporary storage space shall be $100. The
assessment based upon temporary storage space shall be
paid at or before the time of approval of the amount of
the temporary storage space. This assessment on the
temporary storage space capacity does not relieve the
warehouseman of any assessments as set forth in
subsection (d) of this Section.
(7) Every warehouseman shall pay an assessment of
$0.001 per bushel of emergency storage space. The
minimum assessment on any emergency storage space shall
be $100. The assessment based upon emergency storage
space shall be paid at or before the time of approval of
the amount of the emergency storage space. This
assessment on the emergency storage space does not
relieve the warehouseman of any assessments as set forth
in subsection (d) of this Section.
(8) The second and third installments shall be paid
to the Department within 60 days after the date posted on
the written notice of assessment. The Department shall
immediately deposit all paid installments into the Fund.
(d) Grain dealer subsequent assessments; warehouseman
subsequent assessments Subsequent assessments.
(1) Subject to paragraph (4) of this subsection
(d), if on the first working day of a calendar quarter
when a licensee is not already subject to an assessment
under this subsection (d) (the assessment determination
date), if the equity in the Fund is less than $6,000,000
below $3,000,000 on September 1st of any year, every
grain dealer who has, or was required to have, already
paid the newly licensed first, second, and third
assessments shall be assessed by the Department in a
total an amount equal to:
(A) $0.0000725 multiplied by the total value
of grain purchases for the grain dealer's last
completed fiscal year prior to the assessment
determination date as shown in the final financial
statement for that year provided to the Department
under Section 5-20; and
(B) $0.0001275 multiplied by that portion of
the value of grain purchases for the grain dealer's
last completed fiscal year prior to the assessment
determination date that exceeds the adjusted equity
of the licensee multiplied by 20, as shown on the
final financial statement for the licensee's last
completed fiscal year provided to the Department
under Section 5-20.
The minimum total amount for the grain dealer's a
subsequent assessment shall be $250 $500 per 12-month
period year and the maximum amount shall be $7,500 $5,000
per 12-month period year. For the purposes of grain
dealer assessments under this item (1) of subsection (d)
of this Section, the total value of grain purchases shall
be the total value of first time grain purchases by
Illinois locations from producers.
(2) Subject to paragraph (4) of this subsection
(d), if on the first working day of a calendar quarter
when a licensee is not subject to an assessment under
this subsection (d) (the assessment determination date),
if the equity in the Fund is less than $6,000,000 below
$3,000,000 on September 1st of any year, every
warehouseman who has, or was required to have, already
paid the newly licensed first, second, and third
assessments shall be assessed a warehouseman subsequent
assessment by the Department in a total an amount equal
to:
(A) $0.000425 multiplied by the total licensed
storage capacity of the warehouseman as of the first
day of September that immediately precedes the
assessment determination date 1st of that year; and
(B) $0.000495 multiplied by that portion of
the licensed storage capacity of the warehouseman as
of the first day of September that immediately
precedes the assessment determination date 1st of
that year that exceeds the adjusted equity of the
licensee multiplied by 5, as shown on the final
financial statement for the licensee's last
completed fiscal year provided to the Department
under Section 5-20.
The minimum total amount for a warehouseman
subsequent assessment shall be $250 $500 per 12-month
period year and the maximum amount shall be $7,500 $5,000
per 12-month period year.
(3) Subject to paragraph (4) of this subsection
(d), if the equity in the Fund is below $6,000,000 on the
first working day of a calendar quarter when a licensee
is not already subject to an assessment under this
subsection (d) (the assessment determination date), every
incidental grain dealer who has, or was required to have,
already paid all 3 installments of the newly licensed
assessments shall be assessed by the Department in a
total amount equal to $100. It shall be paid to the
Department within 60 days after the date posted on the
written notification by the Department, which shall be
sent after the first day of the calendar quarter
immediately following the assessment determination date.
(4) Following the payment of the final quarterly
installment by grain dealers and warehousemen, the next
assessment determination date can be no sooner than the
first working day of the sixth full calendar month
following the payment.
(5) All assessments under paragraphs (1) and (2) of
this subsection (d) shall be effective as of the first
day of the calendar quarter immediately following the
assessment determination date and shall be paid to the
Department by licensees in 4 equal installments by the
twentieth day of each consecutive calendar quarter
following notice by the Department of the assessment. The
Department shall give written notice to all licensees of
when the assessment is effective, and the rate of the
assessment, by mail within 20 days after the assessment
determination date.
(6) After an assessment under paragraph (1) and (2)
of this subsection (d) is instituted, the amount of any
unpaid installments for the assessment shall not be
adjusted based upon any change in the financial
statements or licensed storage capacity of a licensee.
(7) If the due date for the payment by a licensee
of the third assessment under subsections (b) and (c) of
this Section 5-30 is after the assessment determination
date, that licensee shall not be subject to any of the 4
installments of an assessment under paragraphs (1) and
(2) of this subsection (d).
(8) The Department shall immediately deposit all
paid assessments into the Fund. If the due date for the
payment by a licensee of the third assessment is after
September 1st in a year when the equity in the Fund is
below $3,000,000, that licensee shall not be subject to a
subsequent assessment for that year.
(e) Newly licensed; exemptions.
(1) For the purpose of assessing fees for the Fund
under subsection (a) of this Section, and subject to the
provisions of item (e)(2) of this Section, the Department
shall consider the following to be newly licensed:
(A) A person that becomes a licensee for the
first time after the effective date of this Code.
(B) A licensee who has a lapse in licensing of
more than 30 days. A license shall not be
considered to be lapsed after its revocation or
termination if an administrative or judicial action
is pending or if an order from an administrative or
judicial body continues an existing license.
(C) A grain dealer that is a general
partnership in which there is a change in
partnership interests and that change is greater
than 50% during the partnership's fiscal year.
(D) A grain dealer that is a limited
partnership in which there is a change in the
controlling interest of a general partner and that
change is greater than 50% of the total controlling
interest during the limited partnership's fiscal
year.
(E) A grain dealer that is a limited liability
company in which there is a change in membership
interests and that change is greater than 50% during
the limited liability company's fiscal year.
(F) A grain dealer that is the result of a
statutory consolidation if that person has adjusted
equity of less than 90% of the combined adjusted
equity of the predecessor persons who consolidated.
For the purposes of this paragraph, the adjusted
equity of the resulting person shall be determined
from the approved or certified financial statement
submitted to the Department for the first fiscal
year of the resulting person. For the purpose of
this paragraph, the combined adjusted equity of the
predecessor persons shall be determined by combining
the adjusted equity of each predecessor person as
set forth in the most recent approved or certified
financial statement of each predecessor person
submitted to the Department.
(G) A grain dealer that is the result of a
statutory merger if that person has adjusted equity
of less than 90% of the combined adjusted equity of
the predecessor persons who merged. For the
purposes of this paragraph, the adjusted equity of
the resulting person shall be determined from the
approved or certified financial statement submitted
to the Department for the first fiscal year of the
resulting person ending after the merger. For the
purposes of this paragraph, the combined adjusted
equity of the predecessor persons shall be
determined by combining the adjusted equity of each
predecessor person as set forth in the most recent
approved or certified financial statement submitted
to the Department for the last fiscal year of each
predecessor person ending on the date of or before
the merger.
(H) A grain dealer that is a general
partnership in which there is a change in
partnership interests and that change is 50% or less
during the partnership's fiscal year if the adjusted
equity of the partnership after the change is less
than 90% of the adjusted equity of the partnership
before the change. For the purpose of this
paragraph, the adjusted equity of the partnership
after the change shall be determined from the
approved or certified financial statement submitted
to the Department for the first fiscal year ending
after the change. For the purposes of this
paragraph, the adjusted equity of the partnership
before the change shall be determined from the
approved or certified financial statement submitted
to the Department for the last fiscal year of the
partnership ending on the date of or before the
change.
(I) A grain dealer that is a limited
partnership in which there is a change in the
controlling interest of a general partner and that
change is 50% or less of the total controlling
interest during the partnership's fiscal year if the
adjusted equity of the partnership after the change
is less than 90% of the adjusted equity of the
partnership before the change. For the purposes of
this paragraph, the adjusted equity of the
partnership after the change shall be determined
from the approved or certified financial statement
submitted to the Department for the first fiscal
year ending after the change. For the purposes of
this paragraph, the adjusted equity of the
partnership before the change shall be determined
from the approved or certified financial statement
submitted to the Department for the last fiscal year
of the partnership ending on the date of or before
the change.
(J) A grain dealer that is a limited liability
company in which there is a change in membership
interests and that change is 50% or less of the
total membership interests during the limited
liability company's fiscal year if the adjusted
equity of the limited liability company after the
change is less than 90% of the adjusted equity of
the limited liability company before the change.
For the purposes of this paragraph, the adjusted
equity of the limited liability company after the
change shall be determined from the approved or
certified financial statement submitted to the
Department for the first fiscal year ending after
the change. For the purposes of this paragraph, the
adjusted equity of the limited liability company
before the change shall be determined from the
approved or certified financial statement submitted
to the Department for the last fiscal year of the
limited liability company ending on the date of or
before the change.
(K) A grain dealer that is the result of a
statutory consolidation or merger if one or more of
the predecessor persons that consolidated or merged
into the resulting grain dealer was not a licensee
under this Code at the time of the consolidation or
merger.
(2) For the purpose of assessing fees for the Fund
as set forth in subsection (a) of this Section, the
Department shall consider the following as not being
newly licensed and, therefore, exempt from further
assessment unless an assessment is required by subsection
(d) of this Section:
(A) A person resulting solely from a name
change of a licensee.
(B) A warehouseman changing from a Class I
warehouseman to a Class II warehouseman or from a
Class II warehouseman to a Class I warehouseman
under this Code.
(C) A licensee that becomes a wholly owned
subsidiary of another licensee.
(D) Subject to item (e)(1)(K) of this Section,
a person that is the result of a statutory
consolidation if that person has adjusted equity
greater than or equal to 90% of the combined
adjusted equity of the predecessor persons who
consolidated. For the purposes of this paragraph,
the adjusted equity of the resulting person shall be
determined from the approved or certified financial
statement submitted to the Department for the first
fiscal year of the resulting person. For the purpose
of this paragraph, the combined adjusted equity of
the predecessor persons shall be determined by
combining the adjusted equity net worth of each
predecessor person as set forth in the most recent
approved or certified financial statement of each
predecessor person submitted to the Department.
(E) Subject to item (e)(1)(K) of this Section,
a person that is the result of a statutory merger if
that person has adjusted equity greater than or
equal to 90% of the combined adjusted equity of the
predecessor persons who merged. For the purposes of
this paragraph, the adjusted equity of the resulting
person shall be determined from the approved or
certified financial statement submitted to the
Department for the first fiscal year of the
resulting person ending after the merger. For the
purposes of this paragraph, the combined adjusted
equity of the predecessor persons shall be
determined by combining the adjusted equity of each
predecessor person as set forth in the most recent
approved or certified financial statement, submitted
to the Department for the last fiscal year of each
predecessor person ending on the date of or before
the merger.
(F) A general partnership in which there is a
change in partnership interests and that change is
50% or less during the partnership's fiscal year and
the adjusted equity of the partnership after the
change is greater than or equal to 90% of the
adjusted equity of the partnership before the
change. For the purposes of this paragraph, the
adjusted equity of the partnership after the change
shall be determined from the approved or certified
financial statement submitted to the Department for
the first fiscal year ending after the change. For
the purposes of this paragraph, the adjusted equity
of the partnership before the change shall be
determined from the approved or certified financial
statement submitted to the Department for the last
fiscal year of the partnership ending on the date of
or before the change.
(G) A limited partnership in which there is a
change in the controlling interest of a general
partner and that change is 50% or less of the total
controlling interest during the partnership's fiscal
year and the adjusted equity of the partnership
after the change is greater than or equal to 90% of
the adjusted equity of the partnership before the
change. For the purposes of this paragraph, the
adjusted equity of the partnership after the change
shall be determined from the approved or certified
financial statement submitted to the Department for
the first fiscal year ending after the change. For
the purposes of this paragraph, the adjusted equity
of the partnership before the change shall be
determined from the approved or certified financial
statement submitted to the Department for the last
fiscal year of the partnership ending on the date of
or before the change.
(H) A limited liability company in which there
is a change in membership interests and that change
is 50% or less of the total membership interests
during the limited liability company's fiscal year
if the adjusted equity of the limited liability
company after the change is greater than or equal to
90% of the adjusted equity of the limited liability
company before the change. For the purposes of this
paragraph, the adjusted equity of the limited
liability company after the change shall be
determined from the approved or certified financial
statement submitted to the Department for the first
fiscal year ending after the change. For the
purposes of this paragraph, the adjusted equity of
the limited liability company before the change
shall be determined from the approved or certified
financial statement submitted to the Department for
the last fiscal year of the limited liability
company ending on the date of or before the change.
(I) A licensed warehouseman that is the result
of a statutory merger or consolidation to the extent
the combined storage capacity of the resulting
warehouseman has been assessed under this Code
before the statutory merger or consolidation, except
that any storage capacity of the resulting
warehouseman that has not previously been assessed
under this Code shall be assessed as provided in
items (c)(5), (c)(6), and (c)(7) of this Section.
(J) A federal warehouseman who participated in
the Fund under Section 30-10 and who subsequently
received an Illinois license to the extent the
storage capacity of the warehouseman was assessed
under this Code prior to Illinois licensing.
(f) Grain seller initial assessments and regular
assessments. Assessments under this subsection (f) apply only
to the first sale of grain to a grain dealer at an Illinois
location.
(1) The grain seller initial assessment period is
that period of time beginning on the effective date of
this amendatory Act of the 93rd General Assembly and
ending on the first assessment determination date
thereafter when the equity in the fund is at least
$6,000,000.
(2) Subject to paragraph (3) of this subsection (f)
(i) if during the grain seller initial assessment period
the equity in the Fund is less than $3,000,000 or (ii) if
at any time after the grain seller initial assessment
period the equity in the Fund is less than $2,000,000, on
the first working day of a calendar quarter when a grain
seller is not already subject to an assessment under this
subsection (f) (the assessment determination date), each
person who settles for grain (sold to a grain dealer at
an Illinois location) during the 12-month period
commencing on the first day of the succeeding calendar
quarter (the assessment period) shall pay an assessment
equal to $0.0004 multiplied by the net market value of
grain settled for (payment received for grain sold).
(3) The next assessment determination date can be
no sooner than the first working day of the fourth full
calendar month following the end of the assessment
period.
(4) "Net market value" of grain means the gross
sales price of that grain adjusted by application of the
grain dealer's discount schedule in effect at the time of
sale and after deduction of any statutory commodity
check-offs. Other charges such as storage charges, drying
charges, and transportation costs shall not be deducted
in arriving at the net market value of grain sold to a
grain dealer. The net market value of grain shall be
determined from the settlement sheet or other applicable
written evidence of the sale of grain to the grain
dealer.
(5) All assessments under this subsection (f) shall
commence on the first day of the calendar quarter
immediately following the assessment determination date
and shall continue for a period of 12 consecutive
calendar months. The assessments shall be collected by
licensees at the time of settlement during the assessment
period, and shall be remitted by licensees to the
Department by the twentieth day of each calendar quarter,
commencing with the second calendar quarter following the
assessment determination date. The Department shall give
written notice to all licensees of when an assessment
under this subsection (f) is to begin and end, and the
appropriate level of the assessment, by mail within 20
days after the assessment determination date.
(6) Assessments under this subsection (f) apply
only to grain for which settlement is made during the
assessment period, without regard to the date the grain
was sold to the licensee.
(7) The collection and remittance of assessments
from first sellers of grain under this subsection (f) is
the sole responsibility of the licensees to whom the
grain is sold. Sellers of grain shall not be penalized by
reason of any licensee's failure to comply with this
subsection (f). Failure of a licensee to collect any
assessment shall not relieve the grain seller from paying
the assessment, and the grain seller shall promptly remit
the uncollected assessments upon demand by the licensee,
which may be accounted for in settlement of grain
subsequently sold to that licensee. Licensees who do not
collect assessments as required by this subsection (f),
or who do not remit those assessments to the Department
within the time deadlines required by this subsection
(f), shall remit the amount of the assessments that
should have been remitted to the Department and in
addition shall be subject to a monetary penalty in an
amount not to exceed $1,000.
(8) Notwithstanding the other provisions of this
subsection (f), no assessment shall be levied against
grain sold by the Department as a result of a failure.
(g) Lender assessments.
(1) Subject to the provisions of this subsection
(g), if on the first working day of a calendar quarter
when a person is not already subject to an assessment
under this subsection (g) the equity in the Fund is less
than $6,000,000, each person holding warehouse receipts
issued from an Illinois location on grain owned or stored
by a licensee to secure a loan to that licensee shall be
assessed a quarterly lender assessment for each of 4
consecutive calendar quarters beginning with the calendar
quarter next succeeding the assessment determination
date.
(2) Each quarterly lender assessment shall be at the
rate of $0.00000055 per bushel per day for bushels
covered by a warehouse receipt held as security for the
loan during that calendar quarter times the applicable
commodity price times the lender assessment multiplier,
if any, determined by the Department in accordance with
paragraph (3) of this subsection (g). With respect to
each calendar quarter within the assessment period, the
"applicable commodity price" shall be the closing price
paid by the licensee on the last working day of that
calendar quarter for the base commodity for which the
warehouse receipt was issued.
(3) With respect to the second assessment period
beginning after June 30, 2003, the Department shall
determine and apply a lender assessment multiplier equal
to 250,000 divided by the aggregate dollar amount of
lender assessments imposed under this subsection (g)
under the first assessment period beginning after June
30, 2003. With respect to the third assessment period
beginning after June 30, 2003, the Department shall
determine and apply a lender assessment multiplier equal
to 250,000 divided by the average of aggregate dollar
amounts of lender assessments imposed under this
subsection (g) under the first 2 assessment periods
beginning after June 30, 2003. With respect to assessment
periods thereafter, the Department shall determine and
apply a lender assessment multiplier equal to 250,000
divided by the average of the 3 most recent aggregate
dollar amounts of lender assessments imposed under this
subsection (g).
(4) The next assessment determination date can be no
sooner than the first working day of the fourth full
calendar month following the end of the assessment
period.
(5) The Department shall give written notice by mail
within 20 days after the assessment determination date to
all licensees of when assessments under this subsection
(g) are to begin and end, the rate of the lender
assessment, and the lender assessment multiplier, if any,
that shall apply.
(6) It is the responsibility of a licensee to inform
each of its lenders and other persons by virtue of whose
relationship with the licensee this subsection (g) will
apply as to the onset of an assessment for which that
person might be liable and the applicable lender
assessment multiplier, if any. The notification must be
in writing and, as to persons subject to assessment under
this subsection (g) on the assessment determination date,
must be sent no later than 20 days after the licensee
receives notice of an assessment from the Department. As
to persons not subject to assessment under this
subsection (g) as of the assessment determination date,
the notice shall be sent or given no later than the
closing of any transaction subsequent to the assessment
determination date involving the licensee and by virtue
of which transaction the person is made subject to
assessment under this subsection (g).
(7) Within 20 days after the end of each calendar
quarter within the assessment period, each licensee shall
send to each lender with which it has been associated
during that calendar quarter and to the Department a
written notice of quarterly assessment together with the
information needed to determine the amount of the
quarterly assessment owing with respect to loans from
that lender. This information shall include the number of
bushels covered by each warehouse receipt, organized by
commodity, held as security for the loan owing to that
lender, the number of days each of those warehouse
receipts was outstanding during that calendar quarter,
the applicable commodity price, the applicable lender
assessment multiplier, the amount of the resulting
quarterly lender assessment, and the due date of the
quarterly assessment.
(8) Each quarterly assessment shall be due and paid
by the lender or its designee to the Department within 20
days after the end of the calendar quarter to which the
assessment pertains.
(9) Lenders shall not be penalized by reason of any
licensee's failure to comply with this subsection (g).
Failure of a licensee to comply with this subsection (g)
shall not relieve the lender from paying the assessment,
and the lender shall promptly remit the uncollected
assessments by the due date as set forth in the notice
from the licensee.
(10) This subsection (g) applies to any person who
holds a grain warehouse receipt issued by a licensee from
an Illinois location pursuant to any transaction,
regardless of its form, that creates a security interest
in the grain including, without limitation, the advancing
of money or other value to or for the benefit of a
licensee upon the licensee's issuance or negotiation of a
grain warehouse receipt and pursuant to or in connection
with an agreement between the licensee and a
counter-party for the repurchase of the grain by the
licensee or designee of the licensee. For purposes of
this subsection (g), any such transaction shall be
treated as one in which grain is held as security for a
loan outstanding to a licensee within the meaning of this
subsection (g), and such a person shall be treated as a
lender.
(11) The Department shall immediately deposit all
paid assessments under this subsection (g) into the Fund.
(h) Equity in the Fund shall exclude moneys owing to the
State or the Reserve Fund as a result of transfers to the
Fund from the General Revenue Fund or the Reserve Fund under
subsection (h) of Section 25-20. Notwithstanding the
foregoing, for purposes of calculating equity in the Fund
during the grain seller initial assessment period and
assessing grain sellers, it shall be presumed that the State
is owed, prior to repayment, only $2,000,000 and the Reserve
Fund contains a balance of $2,000,000. Under no
circumstances, however, shall there be more than 2
consecutive grain seller assessments during the initial
assessment period, unless there is a failure that reduces the
equity in the Fund to below $3,000,000. Except for the first
assessment made under this Section, and assessments under
items (c)(5), (c)(6), and (c)(7) of this Section, all
assessments shall be paid to the Department within 60 days
after the date posted on the written notice of assessment.
The Department shall forward all paid assessments to the
Fund.
(Source: P.A. 91-213, eff. 7-20-99.)
(240 ILCS 40/10-5)
Sec. 10-5. Duties and requirements of licensees.
(a) Each licensee shall have adequate property insurance
covering grain in its possession or custody and adequate
liability, property, theft, hazard, and workers' compensation
insurance.
(1) Every insurance policy shall contain a
provision that it will not be cancelled by the principal
or the insurance company except on 60 days prior written
notice to the Director and the principal insured.
Cancellation of the policy does not affect the liability
accrued or that may accrue under the policy before the
expiration of the 60 days. The notice shall contain the
termination date.
(2) Each licensee shall keep a general insurance
account showing the policy number, issuing company,
amount, binding date, and expiration date of insurance
coverage and the property covered by insurance.
(3) In reference to a warehouseman, notwithstanding
any provision to the contrary contained in the warehouse
receipts involved, a warehouseman is not obligated to
provide property insurance on Commodity Credit
Corporation grain ("CCC-owned grain"). The warehouseman,
however, shall continue to carry the insurance required
on loan grain that becomes CCC-owned grain until the date
stated in a written notice from CCC or its agent
instructing the warehouseman to cancel the insurance on
the grain as of that date. If CCC-owned grain is not
covered by property insurance, recovery by the Commodity
Credit Corporation from the Fund shall be reduced by the
amount of property insurance proceeds that would have
been available to cover any loss to CCC-owned grain had
the CCC-owned grain been covered by property insurance.
(b) A licensee shall immediately notify the Department
when there is a change of management or cessation of
operations or change in fiscal year end.
(c) All grain trades, grain merchandising transactions,
grain origination plans and programs, and transactions or
arrangements that represent or reflect rights and obligations
in grain must be clearly identified and disclosed in the
books and records of the licensee, for audit and examination
purposes.
(Source: P.A. 89-287, eff. 1-1-96.)
(240 ILCS 40/10-10)
Sec. 10-10. Duties and requirements of grain dealers.
(a) Long and short market position.
(1) Grain dealers shall at all times maintain an
accurate and current long and short market position
record for each grain commodity. The position record
shall at a minimum contain the net position of all grain
owned, wherever located, grain purchased and sold, and
any grain option contract purchased or sold.
(2) Grain dealers, except grain dealers regularly
and continuously reporting to the Commodity Futures
Trading Commission or grain dealers who have obtained the
permission of the Department to have different open long
or short market positions, may maintain an open position
in the grain commodity of which the grain dealer buys the
greatest number of bushels per fiscal year not to exceed
one bushel for each $10 of adjusted equity at fiscal year
end up to a maximum open position of 50,000 bushels and
one-half that number of bushels up to 25,000 bushels for
all other grain commodities that the grain dealer buys. A
grain dealer, however, may maintain an open position of
up to 5,000 bushels for each grain commodity the grain
dealer buys.
(b) The license issued by the Department to a grain
dealer shall be posted in the principal office of the
licensee in this State. A certificate shall be posted in
each location where the licensee engages in business as a
grain dealer. In the case of a licensee operating a truck or
tractor trailer unit for the purpose of purchasing grain, the
licensee shall have a certificate carried in each truck or
tractor trailer unit used in connection with the licensee's
grain dealer business.
(c) The licensee must have at all times sufficient
financial resources to pay producers on demand for grain
purchased from them.
(d) A licensee that is solely a grain dealer shall on a
daily basis maintain an accurate and current daily grain
transaction report.
(e) A licensee that is both a grain dealer and a
warehouseman shall at all times maintain an accurate and
current daily position record.
(f) In the case of a change of ownership of a grain
dealer, the obligations of a grain dealer do not cease until
the grain dealer has surrendered all unused price later
contracts to the Department and the successor has executed a
successor's agreement that is acceptable to the Department,
or the successor has otherwise provided for the grain
obligations of its predecessor in a manner that is acceptable
to the Department.
(g) If a grain dealer proposes to cease doing business
as a grain dealer and there is no successor, it is the duty
of the grain dealer to surrender all unused price later
contracts to the Department, together with an affidavit
accounting for all grain dealer obligations setting forth the
arrangements made with producers for final disposition of the
grain dealer obligations and indicating the procedure for
payment in full of all outstanding grain obligations. It is
the duty of the Department to give notice by publication that
a grain dealer has ceased doing business without a successor.
After payment in full of all outstanding grain obligations,
it is the duty of the grain dealer to surrender its license.
(Source: P.A. 91-213, eff. 7-20-99.)
(240 ILCS 40/10-15)
Sec. 10-15. Price later contracts.
(a) Price later contracts shall be written on forms
prescribed or authorized by the Department. Price later
contract forms shall be printed by a person authorized to
print those contracts by the Department after that person has
agreed to comply with each of the following:
(1) That all price later contracts shall be printed
as prescribed by the Department and shall be printed
only for a licensed grain dealer.
(2) That all price later contracts shall be
numbered consecutively and a complete record of these
contracts shall be retained showing for whom printed and
the consecutive numbers printed on the contracts.
(3) That a duplicate copy of all invoices rendered
for printing price later contracts that will show the
consecutive numbers printed on the contracts, and the
number of contracts printed, shall be promptly forwarded
to the Department.
(4) that the person shall register with the
Department and pay an annual registration fee of $100 to
print price later contracts.
(b) A grain dealer purchasing grain by price later
contract shall at all times own grain, rights in grain,
proceeds from the sale of grain, and other assets acceptable
to the Department as set forth in this Code totaling 90% of
the unpaid balance of the grain dealer's obligations for
grain purchased by price later contract. That amount shall
at all times remain unencumbered and shall be represented by
the aggregate of the following:
(1) Grain owned by the grain dealer valued by means
of the hedging procedures method that includes marking
open contracts to market.
(2) Cash on hand.
(3) Cash held on account in federally or State
licensed financial institutions.
(4) Investments held in time accounts with
federally or State licensed financial institutions.
(5) Direct obligations of the U.S. government.
(6) Funds on deposit in grain margin accounts.
(7) Balances due or to become due to the licensee
on price later contracts.
(8) Marketable securities, including mutual funds.
(9) Irrevocable letters of credit in favor of the
Department and acceptable to the Department.
(10) Price later contract service charges due or to
become due to the licensee.
(11) Other evidence of proceeds from or of grain
that is acceptable to the Department.
(c) For the purpose of computing the dollar value of
grain and the balance due on price later contract
obligations, the value of grain shall be figured at the
current market price.
(d) Title to grain sold by price later contract shall
transfer to a grain dealer at the time on the date of
delivery of the grain. Therefore, no storage charges shall
be made with respect to grain purchased by price later
contract. A service charge for handling the contract,
however, may be made.
(e) Subject to subsection (f) of this Section, if a
price later contract is not signed by all parties within 30
days of the last date of delivery of grain intended to be
sold by price later contract, then the grain intended to be
sold by price later contract shall be priced on the next
business day after 30 days from the last date of delivery of
grain intended to be sold by price later contract at the
market price of the grain at the close of the next business
day after the 29th day. When the grain is priced under this
subsection, the grain dealer shall send notice to the seller
of the grain within 10 days. The notice shall contain the
number of bushels sold, the price per bushel, all applicable
discounts, the net proceeds, and a notice that states that
the Grain Insurance Fund shall provide protection for a
period of only 160 days from the date of pricing of the
grain.
In the event of a failure, if a price later contract is
not signed by all the parties to the transaction, the
Department may consider the grain to be sold by price later
contract if a preponderance of the evidence indicates the
grain was to be sold by price later contract.
(f) If grain is in storage with a warehouseman and is
intended to be sold by price later contract, that grain shall
be considered as remaining in storage and not be deemed sold
by price later contract until the date the price later
contract is signed by all parties.
(g) Scale tickets or other approved documents with
respect to grain purchased by a grain dealer by price later
contract shall contain the following: "Sold Grain; Price
Later".
(h) Price later contracts shall be issued consecutively
and recorded by the grain dealer as established by rule.
(i) A licensee grain dealer shall not issue a collateral
warehouse receipt on grain purchased by a price later
contract to the extent the purchase price has not been paid
by the licensee grain dealer.
(j) Failure to comply with the requirements of this
Section may result in suspension of the privilege to purchase
grain by price later contract for up to one year.
(k) When a producer with a price later contract selects
a price for all or any part of the grain represented by that
contract, then within 5 business days after that price
selection, the licensee shall mail to that producer a
confirmation of the price selection, clearly and succinctly
indicating the price selected.
(Source: P.A. 91-213, eff. 7-20-99.)
(240 ILCS 40/10-20)
Sec. 10-20. Duties and requirements of warehouseman.
(a) It is the duty of every warehouseman to receive for
storage any grain that may be tendered to it in the ordinary
course of business so far as the licensed storage capacity of
the warehouse permits and if the grain is of a kind
customarily stored by the warehouseman and is in suitable
condition for storage.
(1) If the condition of grain offered for storage
might adversely affect the condition of grain in the
warehouse, a warehouseman need not receive the grain for
storage, but if a warehouseman does receive the grain,
then it must be stored in a manner that will not lower
the grade of other grain in the warehouse.
(2) A warehouseman shall provide competent
personnel and equipment to weigh and grade all grain in
and out of storage.
(3) A warehouseman shall maintain all licensed
warehouse facilities in a manner suitable to preserve the
quality and quantity of grain stored.
(b) For the purposes of the Department's examinations, a
warehouseman shall provide and maintain safe and adequate
means of ingress and egress to the various and surrounding
areas of the facilities, storage bins, and compartments of
the warehouse.
(c) Except as provided in this item (c), a warehouseman
shall at all times have a sufficient quantity of grain of
like kind and quality to meet its outstanding storage
obligations. For purposes of this Section, "like kind and
quality" means the type of commodity and a combination of
grade, specialty traits, if any, and class or sub-class as
applicable.
(d) A warehouseman shall not store grain in excess of
the capacity for which it is licensed.
(e) A warehouseman may redeposit grain from its
warehouse with another warehouseman or a federal warehouseman
in an additional quantity not to exceed the licensed storage
capacity of its own warehouse.
(1) If grain is redeposited as provided in this
Section, a warehouseman must retain the receipt it
obtains from the second warehouseman as proof of the
redeposit and retain sufficient control over the
redeposited grain as is necessary to comply with
directions of the original depositor regarding
disposition of the redeposited grain.
(2) While grain is en route from the redepositing
warehouseman to the second warehouseman, a redepositing
warehouseman must retain an original or a duplicate bill
of lading instead of and until such time as it obtains
possession of the warehouse receipt as proof of
disposition of the redeposited grain.
(f) Schedule of rates and licenses.
(1) A warehouseman shall file its schedule of rates
with the Department and shall post its warehouse license
and a copy of the schedule of rates on file with the
Department in a conspicuous place in each location of the
warehouseman where grain is received.
(2) The schedule of rates shall be on a form
prescribed by the Department and shall include the names
and genuine signatures of all persons authorized to sign
warehouse receipts issued by the warehouseman.
(3) To change the schedule of rates or the name of
any person authorized to sign warehouse receipts, a
warehouseman must file with the Department a revised
schedule of rates and, thereafter, post the revised
schedule of rates at each location of the warehouseman
where grain is received. The revised schedule of rates
shall be deemed filed with the Department on the earlier
of the date it is delivered to the Department or mailed
to the Department by certified mail properly addressed
with sufficient postage attached. The revised schedule
of rates shall be effective on the date the schedule of
rates is posted after delivery or mailing to the
Department in accordance with this Section. Revised
schedules of rates shall apply only to grain delivered
for storage after the effective date of the revised
schedule of rates. No grain in storage at the time of
the effective date of a revised schedule of rates shall
be subject to a revised schedule of rates until one year
after the date of delivery of grain, unless otherwise
provided by a written contract.
(4) The schedule of rates may provide for the
negotiation of different rates for large deliveries of
grain if those rates are applied on a uniform basis to
all depositors under the same circumstances.
(g) A warehouseman may refuse to accept grain if the
identity of the grain is to be preserved. If a warehouseman
accepts grain and the identity of the grain is to be
preserved, the evidence of storage shall state on its face
that the grain is stored with its identity preserved and the
location of that grain.
(h) A warehouseman shall at all times maintain an
accurate and current daily position record on a daily basis.
(i) In the case of a change of ownership of a warehouse,
the obligations of a warehouseman do not cease until its
successor is properly licensed under this Code or the United
States Warehouse Act, it has surrendered all unused warehouse
receipts to the Department and has executed a successor's
agreement, or the successor has otherwise provided for the
obligations of its predecessor.
(j) If a warehouseman proposes to cease doing business
as a warehouseman and there is no successor, it is the duty
of the warehouseman to surrender all unused warehouse
receipts to the Department, together with an affidavit
accounting for all warehouse receipts setting forth the
arrangements made with depositors for final disposition of
the grain in storage and indicating the procedure for payment
in full of all outstanding obligations. After payment in full
of all outstanding obligations, it is the duty of the
warehouseman to surrender its license.
(k) Requests by a warehouseman for special examinations,
grain inventory computation, or verification of grain
quantity or quality shall be accompanied by a fee of $200.
(l) Nothing in this Section is deemed to prohibit a
warehouseman from entering into agreements with depositors of
grain relating to allocation or reservation of storage space.
(Source: P.A. 89-287, eff. 1-1-96.)
(240 ILCS 40/15-15)
Sec. 15-15. Violations of open position limits.
(a) Violations of maximum allowable open position limits
by more than 1,000 bushels but less than twice the maximum
allowable open position limits.
(1) If a licensee violates the maximum allowable
open position limits of item (a)(2) of Section 10-10 and
the open position is more than 1,000 bushels but less
than twice the maximum allowable open position limits,
the licensee shall be required to:
(A) Post collateral with the Department in an
amount equal to $1 per bushel for each bushel of
soybeans in excess of the maximum allowable open
position limits and 50 cents per bushel of each
bushel for all other grain in excess of the maximum
allowable open position limits or $2,500, whichever
is greater; and
(B) Pay a penalty in an amount not to exceed
$250.
(2) If a licensee commits 2 violations as set forth
in item (a) (1) of Section 15-10 within a 2 year period,
the licensee must:
(A) post collateral with the Department in an
amount equal to $1 per bushel for each bushel of
soybeans in excess of the maximum allowable open
position limits and 50 cents per bushel of each
bushel for all other grain in excess of the maximum
allowable open position limits or $5,000, whichever
is greater; and
(B) pay a penalty in the amount of $750 $500.
(3) If a licensee commits 3 or more violations as
set forth in item (a)(1) of Section 15-10 within a 5 year
period, the licensee must:
(A) post collateral with the Department in an
amount equal to $2 per bushel for each bushel of
soybeans in excess of the maximum allowable open
position limits and $1 per bushel of each bushel for
all other grain in excess of the maximum allowable
open position limits or $10,000, whichever is
greater; and
(B) pay a penalty in an amount greater than
$2,000 $1,000 but less than $20,000 $10,000.
(b) Violations of maximum allowable open position limits
that equal or exceed twice the maximum allowable open
position.
(1) If a licensee violates the maximum allowable
open position limits of item (a)(2) of Section 10-10 and
the open position equals or exceeds twice the maximum
allowable open position limits, the licensee must:
(A) post collateral with the Department in an
amount equal to $1 per bushel for each bushel of
soybeans in excess of the maximum allowable open
position and 50 cents per bushel for each bushel of
all other grain in excess of the maximum allowable
open position limits or $5,000, whichever is
greater; and
(B) pay a penalty in the amount of $500.00.
(2) If a licensee commits 2 violations as set forth
in item (b)(1) of Section 15-10 within a 2 year period,
the licensee must:
(A) post collateral with the Department in an
amount equal to $2 per bushel for each bushel of
soybeans in excess of the maximum allowable open
position limits and $1 per bushel for each bushel of
all other grain in excess of the maximum allowable
open position limits or $10,000, whichever is
greater; and
(B) pay a penalty in an amount greater than
$750 $500 but less than $15,000 $10,000.
(3) If a licensee commits 3 or more violations as
set forth in item (b)(1) of Section 15-5 within a 5 year
period, the licensee must:
(A) post collateral with the Department in an
amount equal to $2 per bushel for each bushel of
soybeans in excess of the maximum allowable open
position limits and $1 per bushel for each bushel
for all other grain in excess of the maximum
allowable open position limits or $10,000, whichever
is greater; and
(B) pay a penalty in an amount greater than
$2,000 $1,000 but less than $20,000 $10,000.
(Source: P.A. 89-287, eff. 1-1-96.)
(240 ILCS 40/15-20)
Sec. 15-20. Grain quantity and grain quality violations.
(a) Grain quantity deficiencies of more than $1,000 but
less than $20,000.
(1) If a licensee fails to have a sufficient
quantity of grain in store to meet outstanding storage
obligations and the value of the grain quantity
deficiency as determined by the formula set forth in
subsection (c) of Section 15-20 is more than $1,000 but
less than $20,000, the licensee must:
(A) post collateral with the Department in an
amount equal to the value of the grain quantity
deficiency or $2,500, whichever is greater; and
(B) pay a penalty of $250.
(2) If a licensee commits 2 violations as set forth
in item (a)(1) of Section 15-20 within a 2 year period,
the licensee must:
(A) post collateral with the Department in an
amount equal to the value of the grain quantity
deficiency or $10,000, whichever is greater; and
(B) pay a penalty of $750 $500.
(3) If a licensee commits 3 or more violations as
set forth in item (a)(1) of Section 15-20 within a 5 year
period, the licensee must:
(A) post collateral with the Department in an
amount equal to the value of the grain quantity
deficiency or $20,000, whichever is greater; and
(B) pay a penalty of no less than $2,000
$1,000 and no greater than $20,000 $10,000.
(b) Grain quantity deficiencies of $20,000 or more.
(1) If a licensee fails to have sufficient quantity
of grain in store to meet outstanding storage obligations
and the value of the grain quantity deficiency as
determined by the formula set forth in subsection (c) of
Section 15-20 equals or exceeds $20,000, the licensee
must:
(A) post collateral with the Department in an
amount equal to twice the value of the grain
quantity deficiency; and
(B) pay a penalty of $500.
(2) If a licensee commits 2 violations as set forth
in item (b)(1) of Section 15-20 within a 2 year period,
the licensee must:
(A) post collateral with the Department in an
amount equal to twice the value of the grain
quantity deficiency or $20,000, whichever is
greater; and
(B) pay a penalty of no less than $750 $500
and no greater than $15,000 $10,000.
(3) If a licensee commits 3 or more violations as
set forth in item (b)(1) of Section 15-20 within a 5 year
period, the licensee must:
(A) post collateral with the Department in an
amount equal to twice the value of the grain
quantity deficiency or $40,000, whichever is
greater; and
(B) pay a penalty of no less than $2,000
$1,000 and no greater than $20,000 $10,000.
(c) To determine the value of the grain quantity
deficiency for the purposes of this Section, the rate shall
be $1 per bushel for soybeans and 50 cents per bushel for all
other grains.
(d) If a licensee fails to have sufficient quality of
grain in store to meet outstanding storage obligations when
the value of the grain quality deficiency exceeds $1,000, the
licensee must post collateral with the Department in an
amount equal to the value of the grain quality deficiency.
For the purposes of this Section, the value of the grain
quality deficiency shall be determined by applying prevailing
market discount factors to all grain quality factors.
(Source: P.A. 89-287, eff. 1-1-96; 89-463, eff. 5-31-96.)
(240 ILCS 40/15-30)
Sec. 15-30. Financial and record keeping deficiencies;
collateral and guarantees.
(a) An applicant or a licensee has a financial
deficiency if it does not meet the minimum financial
requirements of Section 5-25 and subsection (b) of Section
10-15 of this Code.
(b) A licensee must collateralize all financial
deficiencies at the rate of one dollar's worth of collateral
for each dollar of the aggregate sum of the individual ratio
deficiencies, the net worth deficiencies, and 90% asset
requirement deficiencies.
(c) A licensee who is found to have record keeping
deficiencies, other than in reference to violations as set
forth in subsection (b) of Section 10-15 and in Sections
15-15 and 15-20, may be required by the Department to post
collateral up to the amount of $10,000.
(d) If an applicant for a new license or a renewal of a
license has financial deficiencies or the Department has
reason to believe that the financial stability of an
applicant or a licensee is in question, the Department may
require the applicant or licensee to provide the Department,
in addition to collateral, personal, corporate, or other
related person guarantees in a form and in an amount
satisfactory to the Department.
(e) Subject to subsection (c) of Section 5-15, the
posting of collateral and the delivery of guarantees does not
relieve a licensee of the continuing obligation to otherwise
comply with the requirements imposed by the Code.
(Source: P.A. 89-287, eff. 1-1-96.)
(240 ILCS 40/15-35)
Sec. 15-35. Return of collateral and guarantees. If the
next fiscal year's financial statement of a licensee received
by the Department and an examination performed by the
Department after delivery or posting of any required
collateral or the guarantee indicates compliance by the
licensee with all statutory requirements of this Code for
which the collateral and guarantees were required, the
collateral and guarantee shall be returned within 90 days a
reasonable period of time to the licensee and the guarantor
following a written request for the return. The financial
statement must comply with the requirements of Section 5-20.
(Source: P.A. 89-287, eff. 1-1-96.)
(240 ILCS 40/15-40)
Sec. 15-40. Suspension and revocation of license.
(a) The Director may suspend a license and take
possession and control of all grain assets and equity assets
(except that the Department may not take possession and
control of any equity asset on which there is a valid prior
perfected security interest or other valid prior perfected
lien without the prior, written permission of the secured
party or lien holder) of the suspended licensee if the
Department has reason to believe that any of the following
has occurred:
(1) A licensee has made a formal declaration of
insolvency; failed to apply for license renewal, leaving
indebtedness to claimants; or been denied a license
renewal, leaving indebtedness to claimants experienced a
failure or is unable to financially satisfy claimants in
accordance with applicable statute, rule, or agreement if
a bona fide dispute does not exist between the licensee
and a claimant.
(2) A licensee has failed to pay a producer, on
demand, for grain purchased from that producer, assuming
no bona fide dispute exists with regard to the payment.
(3) A licensee is otherwise unable to financially
satisfy claimants in accordance with any applicable
statute, rule, or agreement, assuming a bona fide dispute
does not exist between the licensee and the claimant.
(4) A licensee has violated any of the other
provisions of this Code and the violation, or the pattern
of the violations, would create a substantial risk of
failure violated any of the provisions of this Code and
the violation or the pattern of the violations indicates
an immediate danger of loss to potential claimants.
(5) (3) A licensee has failed fails to pay a
penalty or post collateral or guarantees by the date
ordered by the Director.
(6) (4) A licensee has failed fails to pay an
assessment as required by Section 5-30.
(b) The Director may revoke a license if any of the
following occurs: (1) the Director finds, after an
administrative hearing, that any of the grounds for
suspension under item (a)(1), (a)(2), (a)(3), or (a)(4),
(a)(5), or (a)(6) of Section 15-40 have occurred.
(c) (2) When a licensee voluntarily files for bankruptcy
under the federal bankruptcy laws, that filing constitutes a
revocation of the license of the licensee on the day that the
filing occurs.
(d) (3) When an order for relief is entered in reference
to a licensee as a consequence of a petition for involuntary
bankruptcy filed under the federal bankruptcy laws, that
order constitutes a revocation of the license on the date of
that order.
(e) (c) Within 10 days after suspension of a license,
an administrative hearing shall be commenced to determine
whether the license shall be reinstated or revoked. Whenever
an administrative hearing is scheduled, the licensee shall be
served with written notice of the date, place, and time of
the hearing at least 5 days before the hearing date. The
notice may be served by personal service on the licensee or
by mailing it by registered or certified mail, return receipt
requested, to the licensee's place of business. The Director
may, after a hearing, issue an order either revoking or
reinstating the license.
(Source: P.A. 89-287, eff. 1-1-96.)
(240 ILCS 40/15-45)
Sec. 15-45. Criminal offenses.
(a) A person who causes a warehouse receipt for grain to
be issued knowing that the grain for which that warehouse
receipt is issued is not under the licensee's control at the
time of issuing that warehouse receipt, or who causes a
licensee to issue a warehouse receipt for grain knowing that
the warehouse receipt contains any false representation, is
guilty of a Class 2 3 felony.
(b) A person who, knowingly and without lawful
authority, disposes of grain represented by outstanding
warehouse receipts or covered by unreceipted storage
obligations is guilty of a Class 2 3 felony.
(c) A person who, knowingly and without lawful
authority:
(1) withholds records from the Department;
(2) keeps, creates, or files with the Department
false, misleading, or inaccurate records;
(3) alters records without permission of the
Department; or
(4) presents to the Department any materially false
or misleading records;
is guilty of a Class 2 3 felony.
(d) A licensee who, after suspension or revocation of
its license, knowingly and without legal authority refuses to
surrender to the Department all books, accounts, and records
relating to the licensee that are in its possession or
control is guilty of a Class 2 3 felony.
(e) A licensee who knowingly impedes, obstructs,
hinders, or otherwise prevents or attempts to prevent the
Director from performing his or her duties under this Code,
or who knowingly refuses to permit inspection of its
premises, books, accounts, or records by the Department, is
guilty of a Class A misdemeanor.
(f) A person who, knowingly and without a license,
engages in the business of a grain dealer or a warehouseman
for which a license is required under the Code is guilty of a
Class A misdemeanor.
(g) A person who, intentionally, knowingly and without
lawful authority:
(1) fails to maintain sufficient assets as required
by subsection (b) of Section 10-15; or
(2) issues a collateral warehouse receipt covering
grain purchased by a price later contract to the extent
the purchase price has not been paid by the grain dealer;
is guilty of a Class 3 4 felony.
(h) In case of a continuing violation, each day a
violation occurs constitutes a separate and distinct offense.
(Source: P.A. 89-287, eff. 1-1-96.)
(240 ILCS 40/20-10)
Sec. 20-10. Lien on grain assets and equity assets.
(a) A statutory lien shall be imposed on all grain
assets and equity assets in favor of and to secure payment of
obligations of the licensee to:
(1) A person, including, without limitation, a
lender:
(A) who possesses warehouse receipts issued
from an Illinois warehouse location covering grain
owned or stored by a warehouseman;
(B) who has other written evidence of a
storage obligation of a warehouseman issued from an
Illinois warehouse location in favor of the holder,
including, but not limited to, scale tickets,
settlement sheets, and ledger cards; or
(C) who has loaned money to a warehouseman and
was to receive a warehouse receipt from an Illinois
location as security for that loan, who surrendered
warehouse receipts as a part of a grain sale at an
Illinois location, or who has delivered grain out of
storage with the warehouseman as a part of a grain
sale at an Illinois location and:
(i) the grain dealer or warehouseman
experienced a failure within 21 days
thereafter, a warehouse receipt was not issued,
and payment in full was not made; or
(ii) written notice was given by the
person to the Department within 21 days
thereafter stating that a warehouse receipt was
not issued and payment in full was not made.
(2) A producer who possesses evidence of the sale
at an Illinois location of grain delivered to that failed
a grain dealer, or its designee, and who was not fully
paid in full.
This statutory lien arises, attaches, and is perfected at
the date of delivery of grain, and is at that time deemed
assigned by the operation of this Code to the Department.
(b) The lien on grain assets created under this Section
shall be preferred and prior to any other lien, encumbrance,
or security interest relating to those assets described in
the definition of "grain assets" in Section 1-10, regardless
of the time the other lien, encumbrance, or security
interest attached or became perfected. The lien on equity
assets created under this Section shall also be preferred and
prior to any other lien, encumbrance, or security interest
relating to "equity assets" as defined in Section 1-10 to the
extent a creditor does not have a valid security interest in,
or other lien on, the property that was perfected prior to
the date of failure of the licensee. The lien on equity
assets created under this Section, however, shall be
subordinate and subject to any other lien, encumbrance, or
security interest relating to "equity assets" as defined in
Section 1-10 to the extent a creditor has a valid security
interest in or other valid lien on the property that was
perfected prior to the date of failure of the licensee;
provided, however, that a creditor is not deemed to have a
valid security interest or other valid lien on property if
(i) the property can be directly traced as being from the
sale of grain by the licensee or failed licensee; (ii) the
security interest was taken as additional collateral on
account of an antecedent debt owed to the creditor; and (iii)
the security interest or other lien was perfected (A) on or
within 90 days before the date of failure of the licensee or
(B) when the creditor is a related person, within one year of
the date of failure of the licensee.
(c) To the extent any portion of this Code conflicts
with any portion of the Uniform Commercial Code, the
provisions of this Code control.
(d) If an adversarial proceeding is commenced to recover
"grain assets" or "equity assets" upon which a lien created
under this Section is imposed and if the Department declines
to take part in that adversarial proceeding, the Department,
upon application to the Director by any claimant, shall
assign to the claimant the statutory lien to permit the
claimant to pursue the lien in the adversarial proceeding,
but only if the assignment and adversarial proceeding will
not delay the Department's liquidation and distribution of
grain assets, equity assets, collateral, and guarantees,
including proceeds thereof, to all claimants holding valid
claims.
(Source: P.A. 89-287, eff. 1-1-96.)
(240 ILCS 40/20-15)
Sec. 20-15. Liquidation procedures. When a licensee
experiences a failure, the Department has the authority to
and shall:
(a) Immediately post notice at all locations of the
failed licensee stating that the licensee has experienced a
failure and that the license has been terminated and is no
longer effective.
(b) Immediately take physical control and possession of
the failed licensee's facility, including but not limited to
all offices and grain storage facilities, books, records, and
any other property necessary or desirable to liquidate grain
assets and equity assets.
(c) Give public notice and notify all known potential
claimants by certified mail of the licensee's failure and the
processes necessary to file grain claims with the Department
as set forth in Section 25-5.
(d) Perform an examination of the failed licensee.
(e) Seize and take possession of, protect, liquidate,
and collect upon all grain assets, collateral, and guarantees
of or relating to the failed licensee and deposit the
proceeds into the Trust Account. If at any time it appears,
however, in the judgment of the Department that the costs of
seizing and taking possession of, protecting, liquidating,
and collecting upon any or all of the grain assets,
collateral, and guarantees equals or exceeds the expected
recovery to the Department, the Department may elect not to
pursue seizing and taking possession of, protecting,
liquidating, and collecting upon any or all of the assets.
(f) Seize, take possession of, protect, liquidate, and
collect upon the equity assets of the failed licensee and
deposit the proceeds into the Trust account if the Department
has first obtained the written consent of all applicable
secured parties or lien holders, if any. If at any time it
appears, however, in the judgment of the Department that the
costs of seizing and taking possession of, protecting,
liquidating, and collecting upon any or all of the equity
assets equals or exceeds the expected recovery to the
Department, the Department may elect not to pursue seizing
and taking possession of, protecting, liquidating, and
collecting upon any or all of the equity assets. If the
Department does not otherwise pursue seizing and taking
possession of, protecting, liquidating, and collecting upon
any of the equity assets, the Department may bring or
participate in any liquidation or collection proceedings
involving the applicable secured parties or other interested
party, if any, and shall have the rights and remedies
provided by law, including the right to enforce its lien by
any available judicial procedure.
If an applicable secured party or lien holder does not
consent to the Department seizing, taking possession of,
liquidating, or collecting upon the equity assets, the
secured party or lien holder shall have the rights and
remedies provided by law or by agreement with the licensee or
failed licensee, including the right to enforce its security
interest or lien by any available judicial procedure.
(g) Make available on demand to an applicable secured
party or lien holder the equity asset, to the extent the
Department seized or otherwise gained possession or control
of the equity asset, but the secured party or lien holder
does not consent to the Department liquidating and collecting
upon the equity asset.
(Source: P.A. 89-287, eff. 1-1-96.)
(240 ILCS 40/20-20)
Sec. 20-20. Liquidation expenses.
(a) The Trustee shall pay from the Trust Account all
reasonable expenses incurred by the trustee on or after the
date of failure in reference to seizing, preserving, and
liquidating the grain assets, equity assets, collateral, and
guarantees of or relating to a failed licensee, including,
but not limited to, the hiring of temporary field personnel,
equipment rental, auction expenses, mandatory commodity
check-offs, and clerical expenses.
(b) Except as to claimants holding valid claims, any
outstanding indebtedness of a failed licensee that has
accrued before the date of failure shall not be paid by the
Trustee and shall represent a separate cause of action of the
creditor against the failed licensee.
(c) The Trustee shall report all expenditures paid from
the Trust Account to the Corporation at least annually.
(d) To the extent assets are available under subsection
(g) of Section 25-20 and upon presentation of documentation
satisfactory to the Trustee, the Trustee shall transfer from
the Trust Account to the Regulatory Fund an amount not to
exceed the expenses incurred by the Department in performance
of its duties under Article 20 of this Code, in reference to
the failed licensee.
(Source: P.A. 89-287, eff. 1-1-96.)
(240 ILCS 40/25-5)
Sec. 25-5. Adjudication of claims. When a licensee has
experienced a failure, the Department shall process the
claims in the following manner:
(a) The Department shall publish once each week for 3
successive weeks in at least 3 newspapers of general
circulation within the county of the licensee, and shall mail
or deliver to each claimant whose name and post office
address are known or are reasonably ascertainable by the
Department, a notice stating:
(1) That the licensee has experienced a failure and
the date of that failure.
(2) The place and post office address where claims
may be filed.
(3) The procedure for filing claims, as determined
by rule.
(4) That a claimant's claims shall be barred if not
filed with the Department on or before the later of:
(A) the claim date, which shall be 90 days
after the date of failure of the licensee; or
(B) 7 days from the date notice was mailed to
a claimant if the date notice was mailed to that
claimant is on or before the claim date.
(b) Time of notice.
(1) The first date of publication of the notice as
provided for in subsection (a) of this Section shall be
within 30 days after the date of failure.
(2) The published notice as provided for in
subsection (a) of this Section shall be published in at
least 3 newspapers of general circulation in the area
formerly served by the failed licensee.
(3) The notice as provided for in subsection (a) of
this Section shall be mailed by certified mail, return
receipt requested, within 60 days after the date of
failure to each claimant whose name and post office
address are known by the Department within 60 days after
the date of failure.
(c) Every claim filed must be in writing, and verified,
and signed by a person who has the legal authority to file a
claim on behalf of the claimant and must state information
sufficient to notify the Department of the nature of the
claim and the amount sought.
(d) A claim shall be barred and disallowed in its
entirety if:
(1) notice is published and given to the claimant
as provided for in subsections (a) and (b) of this
Section and the claimant does not file a claim with the
Department on or before the claim date; or
(2) the claimant's name or post office address is
not known by the Department or cannot, within 60 days
after the date of failure, be reasonably ascertained by
the Department and the claimant does not file a claim
with the Department on or before the later of the claim
date or 7 days after the date notice was mailed to that
claimant if the date notice was mailed to that claimant
is on or before the claim date.
(e) Subsequent notice.
(1) If, more than 60 days after the date of failure
but before the claim date, the Department learns of the
name and post office address of a claimant who was
previously not notified by the Department by mail, the
Department shall mail by certified mail, return receipt
requested, the notice to the claimant as provided for in
subsection (a) of this Section.
(2) The notice mailed as provided for in item
(e)(1) of this Section shall not extend the period of
time in which a claimant may file its claim beyond the
claim date. A claimant to whom notice is mailed under
item (e)(1) of this Section, however, shall have the
later of the claim date or 7 days after the date notice
was mailed to file a claim with the Department.
(f) The Department shall determine the validity,
category, and amount of each claim within 120 days after the
date of failure of the licensee and. (g) The Department
shall give written notice within that time period to each
claimant and to the failed licensee of the Department's
determination as to the validity, category, and amount of
each claim.
(g) (h) A claimant or the failed licensee may request a
hearing on the Department's determination within 30 days
after receipt of the written notice and the hearing shall be
held in the county of residence of the claimant and in
accordance with rules. Under no circumstances shall payment
to claimants who have not requested a hearing be delayed by
reason of the request for a hearing by any unrelated
claimant.
(h) Within 30 days after a failure of a licensee, the
Director shall appoint an Administrative Law Judge for the
hearings. The Director shall appoint a person licensed to
practice law in this State; who is believed to be
knowledgeable with regard to agriculture and the grain
industry in Illinois; who has no conflict of interest; and
who at the time of his or her appointment is not working for
or employed by the Department in any capacity whatsoever.
(i) For the purposes of this Article, the "reasonably
ascertainable" standard shall be satisfied when the
Department conducts a review of the failed licensee's books
and records and an interview of office and clerical personnel
of the failed licensee.
(j) It is the intent of this Act that the time periods
and deadlines in this Section 25-5 are absolute, and are not
to be tolled, or their operation halted or delayed. In the
event of a bankruptcy by a licensee, the Director shall seek
to have commenced any proceedings that are necessary and
appropriate to lift the automatic stay or make it otherwise
inapplicable to the actions of the Department with regard to
the claims determination process. In all other cases, the
Department shall seek to have commenced the proceedings
necessary to expeditiously remove or lift any order of any
court or administrative agency that might attempt to delay
the time periods and deadlines contained in this Section
25-5.
(Source: P.A. 89-287, eff. 1-1-96.)
(240 ILCS 40/25-10)
Sec. 25-10. Claimant compensation. Within 30 days after
the day on which a claim becomes a valid claim, a claimant
shall be compensated to the extent of its valid claim as
provided in this Section.
It is the express intent of this legislation that each
undisputed portion of a claim shall be paid in accordance
with the deadlines of this Code, even if there are disputed
portions of the claim. For example, the amount of a valid
claim calculated for an "unpriced obligation" shall be paid
to the claimant despite the fact that claimant additionally
seeks the amount for a "priced obligation".
Each claimant shall be compensated in accordance with the
following provisions:
(a) Valid claims filed by warehouse claimants shall be
paid 100% of the amount determined by the Department out of
the net proceeds of the liquidation of grain assets as set
forth in this subsection (a). To the extent the net proceeds
are insufficient, warehouse claimants shall be paid their pro
rata share of the net proceeds of the liquidation of grain
assets and, subject to subsection (j) of this Section, an
additional amount per claimant not to exceed the balance of
their respective claims out of the Fund.
(b) Subject to subsection (j) of this Section, if the
net proceeds as set forth in subsection (a) of this Section
are insufficient to pay in full all valid claims filed by
warehouse claimants as payment becomes due, the balance shall
be paid out of the Fund in accordance with subsection (b) of
Section 25-20.
(c) Valid claims filed by producers who:
(1) have delivered grain within 21 days before the
date of failure, or the date of suspension if the
suspension results in a failure, for which pricing of
that grain has been completed before date of failure; or
(2) gave written notice to the Department within 21
days of the date of delivery of grain, if the pricing of
that grain has been completed, that payment in full for
that grain has not been made;
shall be paid, subject to subsection (j) of this Section,
100% of the amount of the valid claim determined by the
Department. Valid claims that are included in subsection (c)
of this Section shall receive no payment under subsection (d)
of this Section, and any claimant having a valid claim under
this subsection (c) determined by the Department to be in
excess of the limits, if any, imposed under subsection (j) of
this Section shall be paid only sums in excess of those
limits to the extent additional money is available under
subsection (d)(2) of Section 25-20.
(d) Valid claims that are not included in subsection (c)
of this Section that are filed by producers where the later
date of completion of who completed delivery or and pricing
of the grain in reference to the valid claim, whichever is
later, within 160 days before the date of failure shall be
paid 85% of the amount of the valid claim determined by the
Department or $250,000 $100,000, whichever is less, per
claimant. In computing the 160-day period, the phrase "date
of completion of delivery" means the date of the last
delivery of grain to be applied to the quantity requirement
of the contract, and the phrase "the later date" means the
date closest to the date of failure. In addition, for claims
filed by producers for grain sold on a contract, however, the
later of the date of execution of the contract or the date of
delivery of grain in reference to the grain covered by the
price later contract must not be more than 365 270 days
before the date of failure in order for the claimant to
receive any compensation. In computing the 365-day period,
the phrase "the later of the date" means the date closest to
the date of failure, and the phrase "date of delivery" means
the date of the last delivery of grain to be applied to the
quantity requirement of the price later contract.
(e) Valid claims filed by producers for grain sold on a
price later contract, for which the final price has not been
established, shall be paid 85% of the amount of the valid
claims determined by the Department or $250,000 $100,000,
whichever is less, per claimant, if the later of the date of
execution of the contract or the date of delivery of grain in
reference to the grain covered by the price later contract
occurred not no more than 365 270 days before the date of
failure. In computing the 365-day period, the phrase "the
later of the date" means the date closest to the date of
failure, and the phrase "date of delivery" means the date of
the last delivery of grain to be applied to the quantity
requirement of the price later contract.
The execution of subsequent price later contracts by the
producer and the licensee for grain previously covered by a
price later contract shall not extend the coverage of a claim
beyond the original 365 270 days.
(f) The maximum payment to producers under subsections
(d) and (e) of this Section, combined, shall be $250,000
$100,000 per claimant.
(g) The following claims shall be barred and disallowed
in their entirety and shall not be entitled to any recovery
from the Fund or the Trust Account:
(1) Claims filed by producers where both the date
of completion of delivery and the date of pricing of the
grain are who completed pricing of the grain in reference
to their claim in excess of 160 days before the date of
failure.
(2) Claims filed by producers for grain sold on a
price later contract if the later of the date of
execution of the contract or the date of delivery of
grain in reference to the grain covered by the price
later contract occurred more than 365 270 days before the
date of failure. In computing the 365-day period, the
phrase "the later of the date" means the date closest to
the date of failure, and the phrase "date of delivery"
means the date of the last delivery of grain to be
applied to the quantity requirement of the price later
contract.
(3) Claims filed by any claimant that are based
upon or acquired by fraudulent or illegal acts of the
claimant.
(h) To the extent moneys are available, additional pro
rata payments may be made to claimants under subsection (d)
of Section 25-20.
(i) For purposes of this Section, a claim filed in
connection with warehouse receipts that are possessed under a
collateral pledge of a producer, or that are subject to a
perfected security interest, or that were acquired by a
secured party or lien holder under an obligation of a
producer, shall be deemed to be a claim filed by the producer
and not a claim filed by the secured party or the lien
holder, regardless of whether the producer is in default
under that collateral pledge, security agreement, or other
obligation.
(j) With respect to any failure occurring on or after
July 1, 1998, The maximum payment out of the Fund for
claimants under subsection (a), (b) of this Section shall be
$1,000,000 per claimant and the maximum payment out of the
Fund for claimants under subsections (c), (d), and (e) of
this Section, combined, shall be $1,000,000 per claimant.
(k) The amounts to be paid to warehouse valid claimants
and grain dealer valid claimants shall be calculated
according to the following:
(1) Valid claimants who have warehouse claims, or
who have grain dealer claims for grain sold, delivered
but unpriced as of the date of failure, shall have
"unpriced obligations", and to determine the per bushel
value of these valid claims the Department shall use an
average of the cash bid prices on the date of failure
from grain dealers located within the market area of the
failed licensee, and the cash bid price offered by the
failed licensee on the date of failure, less
transportation, handling costs, and discounts applicable
as of that date.
(2) Valid claimants who have grain dealer claims
for grain sold, delivered, and priced as of the date of
failure shall have "priced obligations", and the price
per bushel to be used in calculating the compensation due
these valid claimants shall be that which has been agreed
upon by the failed licensee and the claimant, less
applicable discounts. For purposes of this item (2), a
person has "priced" his or her grain if he or she has
done those things necessary under the agreement to set,
choose, or select a price for any portion of the grain
under the agreement, without regard to whether he or she
has received a check in payment for the grain, or could
have received a check in payment for the grain, prior to
the failure.
(l) Arrangements whereby a producer agrees with a
licensee to defer receipt of payment of amounts due from the
sale of grain are covered by this Code and are not to be
considered loans by the producer to the licensee, despite
payments to the producer as an inducement for the leaving of
moneys with the licensee, unless the licensee has executed
and delivered to the producer a promissory note covering
those amounts.
(Source: P.A. 91-213, eff. 7-20-99.)
(240 ILCS 40/25-20)
Sec. 25-20. Priorities and repayments.
(a) All valid claims shall be paid from the Trust
Account, as provided in Section 25-10, first from the
proceeds realized from liquidation of and collection upon the
grain assets relating to the failed licensee, as to warehouse
claimants, and the equity assets as to a secured party or
lien holder who has consented to the Department liquidating
and collecting upon the equity asset as set forth in
subsection (f) of Section 20-15, and the remaining equity
assets, collateral, and guarantees relating to the failed
licensee, as to grain dealer claimants.
(b) If the proceeds realized from liquidation of and
collection upon the grain assets, equity assets, collateral,
and guarantees relating to the failed licensee are
insufficient to pay all valid claims as provided in Section
25-10 and subsection (a) of this Section as payment on those
claims becomes due, the Director shall request from the Board
sufficient funds to be transferred from the Fund to the Trust
Account to pay the balance owed to claimants as determined
under Section 25-10. If a request is made by the Director
for a transfer of funds to the Trust Account from the Fund,
the Board shall act on that request within 25 days after the
date of that request. Once moneys are transferred from the
Fund to the Trust Account, the Director shall pay the balance
owed to claimants in accordance with Section 25-10.
(c) Net proceeds from liquidation of grain assets as set
forth in subsection (a) of Section 25-10 received by the
Department, to the extent not already paid to warehouse
claimants, shall be prorated among the fund and all warehouse
claimants who have not had their valid claims paid in full.
(1) The pro rata distribution to the Fund shall be
based upon the total amount of valid claims of all
warehouse claimants who have had their valid claims paid
in full. The pro rata distribution to each warehouse
claimant who has not had his or her valid claims paid in
full shall be based upon the total amount of that
claimant's original valid claims.
(2) If the net proceeds from the liquidation of
grain assets as set forth in subsection (a) of Section
25-10 exceed all amounts needed to satisfy all valid
claims filed by warehouse claimants, the balance
remaining shall be paid into the Trust Account or as set
forth in subsection (h).
(d) Subject to subsections (c) and (h):
(1) The proceeds realized from liquidation of and
collection upon the grain assets, equity assets,
collateral, and guarantees relating to the failed
licensee or any other assets relating to the failed
licensee that are received by the Department, to the
extent not already paid to claimants, shall be first used
to repay the Fund for moneys transferred to the Trust
Account.
(2) After the Fund is repaid in full for the moneys
transferred from it to pay the valid claims in reference
to a failed licensee, any remaining proceeds realized
from liquidation of and collection upon the grain assets,
equity assets, collateral, and guarantees relating to the
failed licensee thereafter received by the Department
shall be prorated to the claimants holding valid claims
who have not received 100% of the amount of their valid
claims based upon the unpaid amount of their valid
claims.
(e) After all claimants have received 100% of the amount
of their valid claims, to the extent moneys are available
interest at the rate of 6% per annum shall be assessed and
paid to the Fund on all moneys transferred from the Fund to
the Trust Account.
(f) After the Fund is paid the interest as provided in
subsection (e) of this Section, then those claims barred and
disallowed under subsection (g) of Section 25-10 shall be
paid on a pro rata basis only to the extent that moneys are
available.
(g) Once all claims become valid claims and have been
paid in full and all interest as provided in subsection (e)
of this Section is paid in full, and all claims are paid in
full under subsection (f), any remaining grain assets, equity
assets, collateral, and guarantees, and the proceeds realized
from liquidation of and collection upon the grain assets,
equity assets, collateral, and guarantees relating to the
failed licensee, shall be returned to the failed licensee or
its assignee, or as otherwise directed by a court of
competent jurisdiction.
(h) If amounts in the Fund are insufficient to pay all
valid claims, the Corporation shall transfer from the Reserve
Fund to the Fund amounts sufficient to satisfy the valid
claims, and to the extent the amounts thus transferred are
insufficient to pay all valid claims, the General Assembly
shall appropriate to the Corporation amounts sufficient to
satisfy the valid claims. If for any reason the General
Assembly fails to make an appropriation to satisfy
outstanding valid claims, this Code constitutes an
irrevocable and continuing appropriation of all amounts
necessary for that purpose and the irrevocable and continuing
authority for and direction to the State Comptroller and to
the State Treasurer to make the necessary transfers and
disbursements from the revenues and funds of the State for
that purpose. Subject to payments to warehouse claimants as
set forth in subsection (c) of Section 25-20, the State shall
be first reimbursed, and the Reserve Fund shall thereafter be
reimbursed to the extent needed to restore the Reserve Fund
to a level of $2,000,000 of principal (not including income
on the assets in the Reserve Fund) as soon as funds become
available for any amounts paid under subsection (g) of this
Section upon replenishment of the Fund from assessments under
subsections subsection (d), (f), and (g) of Section 5-30 and
collection upon grain assets, equity assets, collateral, and
guarantees relating to the failed licensee.
(i) The Department shall have those rights of equitable
subrogation which may result from a claimant receiving from
the Fund payment in full of the obligations of the failed
licensee to the claimant.
(Source: P.A. 91-213, eff. 7-20-99.)
(240 ILCS 40/30-5)
Sec. 30-5. Illinois Grain Insurance Corporation.
(a) The Corporation is a political subdivision, body
politic, and public corporation. The governing powers of the
Corporation are vested in the Board of Directors composed of
the Director, who shall personally serve as president; the
Attorney General or his or her designee, who shall serve as
secretary; the State Treasurer or his or her designee, who
shall serve as treasurer; the Director of the Department of
Insurance or his or her designee; and the chief fiscal
officer of the Department. Three members of the Board
constitute a quorum at any meeting of the Board, and the
affirmative vote of 3 members is necessary for any action
taken by the Board at a meeting, except that a lesser number
may adjourn a meeting from time to time. A vacancy in the
membership of the Board does not impair the right of a quorum
to exercise all the rights and perform all the duties of the
Board and Corporation.
(b) The Corporation has the following powers, together
with all powers incidental or necessary to the discharge of
those powers in corporate form:
(1) To have perpetual succession by its corporate
name as a corporate body.
(2) To adopt, alter, and repeal bylaws, not
inconsistent with the provisions of this Code, for the
regulation and conduct of its affairs and business.
(3) To adopt and make use of a corporate seal and
to alter the seal at pleasure.
(4) To avail itself of the use of information,
services, facilities, and employees of the State of
Illinois in carrying out the provisions of this Code.
(5) To receive funds, printer registration fees,
and penalties assessed by the Department under this Code.
(6) To administer the Fund by investing funds of
the Corporation that the Board may determine are not
presently needed for its corporate purposes.
(7) To receive funds from the Trust Account for
deposit into the Fund.
(8) Upon the request of the Director, to make
payment from the Fund and the Reserve Fund to the Trust
Account when payment is necessary to compensate claimants
in accordance with the provisions of Section 25-20 or for
payment of refunds to licensees in accordance with the
provisions of this Code.
(9) To authorize, receive, and disburse funds by
electronic means.
(10) To make any inquiry and investigation deemed
appropriate with regard to the failure of any licensee,
including but not limited to analyzing the causes of and
reasons for the failure; determining the adequacy and
accuracy of Department examinations and other regulatory
measures with regard to the failed licensee; and
analyzing whether the handling of the liquidation and
payment process by the Department was done in a manner
that served the interests of those persons whose
interests this Code was designed to protect.
(11) (9) To have those powers that are necessary or
appropriate for the exercise of the powers specifically
conferred upon the Corporation and all incidental powers
that are customary in corporations.
(c) A committee of advisors shall be created to provide
technical assistance and advice and make recommendations to
the Board. The advisory committee shall assist the board in
understanding pertinent developments in grain production and
marketing and the grain industry. The advisory committee
shall be composed of one grain producer designated by the
Illinois Farm Bureau; one grain producer designated by the
Illinois Farmers Union; one grain producer designated by the
Illinois Corn Growers Association; one grain producer
designated by the Illinois Soybean Association; 2
representatives of the grain industry, designated by the
Grain and Feed Association of Illinois; and 2 representatives
of the lending industry, one each designated by the Illinois
Bankers Association and the Community Bankers of Illinois.
Members of the advisory committee shall serve terms of 2
years from the date of their designation. Members of the
advisory committee shall have the right to attend all
meetings of the Board and participate in Board discussions,
but shall not have a vote.
(Source: P.A. 91-213, eff. 7-20-99.)
(240 ILCS 40/30-10)
Sec. 30-10. Participants in the Fund.
(a) A licensee under this Code is subject to this
Article and shall collect and pay assessments into the Fund
as provided in Section 5-30.
(b) Except as provided in subsection (c) of this
Section, a person engaged in the business of a grain dealer
or warehouseman but not licensed under this Code shall not
participate in or benefit from the Fund and its claimants
shall not receive proceeds from the Fund.
(c) Participation of federal warehousemen.
(1) A federal warehouseman may participate in the
Fund. If a federal warehouseman chooses to participate
in the Fund, it shall to the extent permitted by federal
law:
(A) pay assessments into the Fund;
(B) be deemed a licensee and a warehouseman
under this Code;
(C) be subject to this Code; and
(D) execute a cooperative agreement between
itself and the Department.
(2) The cooperative agreement shall, at a minimum,
provide each of the following to the extent permitted by
federal law:
(A) Authorization for the Department to obtain
information about the federal warehouseman
including, but not limited to, bushel capacity of
storage space, financial stability, and examinations
performed by employees of the United States
Department of Agriculture.
(B) That the federal warehouseman submits
itself to the jurisdiction of the Department and
that it agrees to be subject to and bound by this
Code and deemed a licensee under this Code.
(C) That in the event of a failure of the
federal warehouseman, the Department shall have
authority to seize, liquidate, and collect upon all
grain assets, collateral, and guarantees relating to
the federal warehouseman as in the case of any other
licensee.
(D) Such other requirements as established by
rule.
(3) A federal warehouseman that participates in the
Fund shall at a minimum meet the licensing requirements
of this Code and shall comply with all requirements of a
licensee and a warehouseman under this Code to the extent
permitted by federal law.
(d) A federal warehouseman that participates in the Fund
or a warehouseman that desires to or has become a federal
warehouseman cannot withdraw from participation in the Fund
for the benefit of existing depositors until the occurrence
of all of the following:
(1) Payment in full by the federal warehouseman or
withdrawing warehouseman of all assessments under
subsection (a) of Section 5-30.
(2) Payment in full by the federal warehouseman or
withdrawing warehouseman of all assessments instituted
under subsection (d) of Section 5-30 on or after an
assessment determination date that occurs before if the
Fund is under $3,000,000 at any time after the federal
warehouseman or withdrawing warehouseman notifies the
Department that it desires to withdraw from participation
in the Fund and before the issuance by the Department of
a certificate of withdrawal from the Fund.
(3) The expiration of 30 days following the later
of:
(A) the date the federal warehouseman or
withdrawing warehouseman has ceased providing its
depositors with coverage under the Fund;
(B) the date the federal warehouseman or
withdrawing warehouseman has posted at each of its
locations a notice stating when it will cease
providing its depositors with coverage under the
Fund;
(C) notification of all potential claimants by
the federal warehouseman or withdrawing warehouseman
of the date on which it will cease providing its
depositors with coverage under the Fund; and
(D) Completion of an audit and examination
satisfactory to the Department as provided for in
this Code and by rule, which is to be the
Department's final examination.
(4) Obtaining releases of liability from all
existing depositors or posting collateral with the
Department for 270 days after withdrawing from the Fund
in an amount equal to the liability to existing
depositors who have not executed releases before the
completion of the Department's final examination.
(5) Compliance with all notification requirements
as provided for in this Code and by rule.
(6) Issuance by the Department of a certificate of
withdrawal from the Fund when the federal warehouseman or
withdrawing warehouseman has met all requirements for
withdrawal from participation in the Fund.
(e) Before a federal warehouseman or a warehouseman that
desires to or has become a federal warehouseman may withdraw
from participation in the Fund, it must pay for an audit and
examination and must provide to the Department all names and
addresses of potential claimants for the purposes of
notification of withdrawal of participation in the Fund.
(Source: P.A. 89-287, eff. 1-1-96.)
(240 ILCS 40/30-25 new)
Sec. 30-25. Grain Insurance Reserve Fund. Upon payment
in full of all money that has been transferred to the Fund
prior to June 30, 2003 from the General Revenue Fund as
provided for under subsection (h) of Section 25-20, the State
of Illinois shall remit $2,000,000 to the Corporation to be
held in a separate and discrete account to be used to the
extent the assets in the Fund are insufficient to satisfy
claimants as payment of their claims become due as set forth
in subsection (h) of Section 25-20. The remittance of the
$2,000,000 reserve shall be made to the Corporation within 60
days of payment in full of all money transferred to the Fund
as set forth above in this Section 30-25. All income received
by the Reserve Fund shall be deposited in the Fund within 35
days of the end of each calendar quarter.
(240 ILCS 40/Art. 35 heading new)
ARTICLE 35. REGULATORY FUND
(240 ILCS 40/35-5 new)
Sec. 35-5. Regulatory Fund.
(a) The Regulatory Fund is created as a trust fund in
the State Treasury. The Regulatory Fund shall receive
license, certificate, and extension fees under Sections 5-10,
5-15, and 5-20 and funds under subsection (g) of Section
25-20 and shall pay expenses as set forth in this Article 35.
(b) Any funds received by the Director under Sections
5-10, 5-15, and 5-20 and funds disbursed for deposit to the
Regulatory Fund under subsection (g) of Section 25-20 shall
be deposited with the Treasurer as ex officio custodian and
held separate and apart from any public money of this State,
with interest accruing on moneys in the Regulatory Fund
deposited into the Regulatory Fund. Disbursement from the
Fund for expenses as set forth in this Article 35 shall be by
voucher ordered by the Director, accompanied by documentation
satisfactory to the Treasurer and the Comptroller supporting
the payment warrant drawn by the Comptroller and
countersigned by the Treasurer. Moneys in the Regulatory Fund
shall not be subject to appropriation by the General Assembly
but shall be subject to audit by the Auditor General.
Interest earned on moneys deposited into the Regulatory Fund
shall be deposited into the Regulatory Fund.
(c) Fees deposited into the Regulatory Fund under
Sections 5-10, 5-15, and 5-20 shall be expended only for the
following program expenses of the Department;
(1) Implementation and monitoring of programs of
the Department solely under this Code, including an
electronic warehouse receipt program.
(2) Employment or engagement of certified public
accountants to assist in oversight and regulation of
licensees in the course of an intermediate or advanced
examination under Section 1-15.
(3) Training and education of examiners and other
Department employees in reference to Department programs
established to implement the Department's duties solely
under the Code.
(d) Any expenses incurred by the Department in
performance of its duties under Article 20 of the Code shall
be reimbursed to the Department out of the net assets of a
liquidation to the extent available under subsection (q) of
Section 25-20 and shall be deposited into the Regulatory Fund
and shall be expended solely for program expenses under the
Code.
Section 99. Effective date. This Act takes effect upon
becoming law.