093_HB1458enr

 
HB1458 Enrolled                      LRB093 03693 RCE 07393 b

 1        AN ACT concerning agriculture.

 2        Be it enacted by the People of  the  State  of  Illinois,
 3    represented in the General Assembly:

 4        Section   5.  The  Grain  Code  is  amended  by  changing
 5    Sections 1-5, 1-10, 1-15, 1-20, 1-25, 5-5, 5-10, 5-15,  5-20,
 6    5-25,  5-30,  10-5, 10-10, 10-15, 10-20, 15-15, 15-20, 15-30,
 7    15-35, 15-40, 15-45, 20-10, 20-15, 20-20, 25-5, 25-10, 25-20,
 8    30-5, and 30-10 and by adding Section 30-25 and Article 35 as
 9    follows:

10        (240 ILCS 40/1-5)
11        Sec.  1-5.  Purpose.    The   Illinois   grain   industry
12    comprises  a  significant  and  vital  part  of  the  State's
13    economy.    The  grain  industry  can function to its fullest
14    competitive and profitable potential,  thus  contributing  to
15    the  economic  health of this State, when it operates under a
16    coordinated and integrated structure.  The  purpose  of  this
17    Code is to provide a single system of governmental regulation
18    of  the  Illinois  grain  industry.   It  is also the primary
19    purpose of this  Code  to  promote  the  State's  welfare  by
20    improving  the  economic stability of agriculture through the
21    existence of the Illinois Grain Insurance Fund  in  order  to
22    protect  producers  in the event of the failure of a licensed
23    grain dealer or  licensed  warehouseman  and  to  ensure  the
24    existence  of  an  adequate  resource so that persons holding
25    valid claims may be compensated for losses occasioned by  the
26    failure  of a licensed grain dealer or licensed warehouseman.
27    To that end, this  Code  shall  be  liberally  construed  and
28    liberally administered in favor of claimants.
29        In  addition,  the  Illinois  grain  industry comprises a
30    significant and vital part of the State's economy and as such
31    can  function  to  its  fullest  competitive  and  profitable
 
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 1    potential, thus contributing to the economic health  of  this
 2    State,  when  it  operates under a coordinated and integrated
 3    regulatory structure. Thus, a further purpose of this Code is
 4    to provide a single system of governmental regulation of  the
 5    Illinois grain industry.
 6    (Source: P.A. 89-287, eff. 1-1-96.)

 7        (240 ILCS 40/1-10)
 8        Sec. 1-10.  Definitions.  As used in this Act:
 9        "Board"  means  the  governing body of the Illinois Grain
10    Insurance Corporation.
11        "Certificate" means a document, other than  the  license,
12    issued by the Department that certifies that a grain dealer's
13    license has been issued and is in effect.
14        "Claimant" means:
15        (a)  a person, including, without limitation, a lender:
16             (1)  who possesses warehouse receipts issued from an
17        Illinois  location  covering  grain  owned or stored by a
18        failed warehouseman; or
19             (2)  who has other written  evidence  of  a  storage
20        obligation  of  a  failed  warehouseman  issued  from  an
21        Illinois  location in favor of the holder, including, but
22        not limited to, scale  tickets,  settlement  sheets,  and
23        ledger cards; or
24             (3)  who  has loaned money to a warehouseman and was
25        to receive a warehouse receipt issued  from  an  Illinois
26        location  as  security  for  that  loan,  who surrendered
27        warehouse receipts as part of a grain sale at an Illinois
28        location, or who delivered grain out of storage with  the
29        warehouseman  as  part  of  a  grain  sale at an Illinois
30        location; and
31                  (i)  the grain dealer  or  warehouseman  failed
32             within   21  days  after  the  loan  of  money,  the
33             surrender of warehouse receipts, or the delivery  of
 
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 1             grain,  as the case may be, and no warehouse receipt
 2             was issued or payment in full was not  made  on  the
 3             grain sale, as the case may be; or
 4                  (ii)  written notice was given by the person to
 5             the  Department  within  21  days  after the loan of
 6             money, the surrender of warehouse receipts,  or  the
 7             delivery  of grain, as the case may be, stating that
 8             no warehouse receipt was issued or payment  in  full
 9             made on the grain sale, as the case may be; or
10        (b)  a  producer  not  included  in  item  (a)(3)  in the
11    definition of "Claimant" who possesses evidence of  the  sale
12    at  an Illinois location of grain delivered to a failed grain
13    dealer, or its designee in Illinois and who was not  paid  in
14    full.
15        "Class  I  warehouseman"  means  a  warehouseman  who  is
16    authorized  to  issue negotiable and non-negotiable warehouse
17    receipts.
18        "Class II  warehouseman"  means  a  warehouseman  who  is
19    authorized to issue only non-negotiable warehouse receipts.
20        "Code" means this the Grain Code.
21        "Collateral" means:
22        (a)  irrevocable letters of credit;
23        (b)  certificates of deposit;
24        (c)  cash or a cash equivalent; or
25        (d)  any  other  property acceptable to the Department to
26    the extent there exists equity in  that  property.   For  the
27    purposes  of  this  item (d), "equity" is the amount by which
28    the fair market value of the property exceeds the amount owed
29    to a creditor who has  a  valid,  prior,  perfected  security
30    interest  in  or  other  valid,  prior, perfected lien on the
31    property.
32        "Corporation"  means   the   Illinois   Grain   Insurance
33    Corporation.
34        "Daily   position   record"   means   a  grain  inventory
 
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 1    accountability  record  maintained  on  a  daily  basis  that
 2    includes  an  accurate  reflection  of   changes   in   grain
 3    inventory,  storage  obligations,  company-owned inventory by
 4    commodity, and other information  that  is  required  by  the
 5    Department.
 6        "Daily  grain  transaction  report" means a record of the
 7    daily transactions of a grain dealer showing  the  amount  of
 8    all grain received and shipped during each day and the amount
 9    on hand at the end of each day.
10        "Date of delivery of grain" means:
11        (a)  the  date  grain  is delivered to a grain dealer, or
12    its designee in Illinois, for the purpose of sale;
13        (b)  the date grain is delivered to  a  warehouseman,  or
14    its designee in Illinois, for the purpose of storage; or
15        (c)  in   reference   to   grain   in   storage   with  a
16    warehouseman,  the  date  a  warehouse  receipt  representing
17    stored grain is delivered to  the  issuer  of  the  warehouse
18    receipt for the purpose of selling the stored grain or, if no
19    warehouse receipt was issued:
20             (1)  the date the purchase price for stored grain is
21        established; or
22             (2)  if  sold  by  price later contract, the date of
23        the price later contract.
24        "Department"   means   the   Illinois    Department    of
25    Agriculture.
26        "Depositor"  means a person who has evidence of a storage
27    obligation from a warehouseman.
28        "Director", unless otherwise provided, means the Illinois
29    Director of Agriculture, or the Director's designee.
30        "Electronic document" means a document that is generated,
31    sent, received, or stored by electrical,  digital,  magnetic,
32    optical   electromagnetic,   or   any  other  similar  means,
33    including, but not limited to, electronic  data  interchange,
34    electronic mail, telegram, telex, or telecopy.
 
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 1        "Electronic  warehouse receipt" means a warehouse receipt
 2    that is issued or transmitted in the form  of  an  electronic
 3    document.
 4        "Emergency  storage"  means space measured in bushels and
 5    used for a period of time not to exceed 3 months for  storage
 6    of grain as a consequence of an emergency situation.
 7        "Equity assets" means:
 8        (a)  The equity in any property of the licensee or failed
 9    licensee, other than grain assets.  For purposes of this item
10    (a):
11             (1)  "equity" is the amount by which the fair market
12        value  of  the  property  exceeds  the  amount  owed to a
13        creditor who has a valid security interest  in  or  other
14        valid  lien on the property that was perfected before the
15        date of failure of the licensee;
16             (2)  a creditor  is  not  deemed  to  have  a  valid
17        security  interest or other valid lien on property if (i)
18        the property can be directly traced  as  being  from  the
19        sale  of  grain  by the licensee or failed licensee; (ii)
20        the security interest was taken as additional  collateral
21        on  account  of  an antecedent debt owed to the creditor;
22        and  (iii)  the  security  interest  or  other  lien  was
23        perfected (A) on or within 90 days  before  the  date  of
24        failure  of  the  licensee  or (B) when the creditor is a
25        related person, within one year of the date of failure of
26        the licensee.
27        "Failure" means, in reference to a licensee:
28        (a)  a  formal declaration of insolvency;
29        (b)  a revocation of a license;
30        (c)  a failure to  apply  for  license  renewal,  leaving
31    indebtedness to claimants;
32        (d)  a denial of license renewal, leaving indebtedness to
33    claimants; or
34        (e)  a   voluntary   surrender   of  a  license,  leaving
 
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 1    indebtedness to claimants.
 2        "Federal warehouseman" means a warehouseman  licensed  by
 3    the   United   States  government  under  the  United  States
 4    Warehouse Act (7 U.S.C. 241 et seq.).
 5        "Fund" means the Illinois Grain Insurance Fund.
 6        "Grain" means corn, soybeans, wheat, oats,  rye,  barley,
 7    grain  sorghum, canola, buckwheat, flaxseed, edible soybeans,
 8    and  other  like  agricultural  commodities   that   may   be
 9    designated by rule.
10        "Grain assets" means:
11        (a)  all  grain  owned and all grain stored by a licensee
12    or failed licensee, wherever located,  including  redeposited
13    grain of a licensee or failed licensee;
14        (b)  (blank)  redeposited  grain  of a licensee or failed
15    licensee;
16        (c)  identifiable proceeds, including,  but  not  limited
17    to,  insurance  proceeds, received by or due to a licensee or
18    failed  licensee   resulting   from   the   sale,   exchange,
19    destruction, loss, or theft of grain, or other disposition of
20    grain by the licensee or failed licensee; or
21        (d)  assets  in  hedging  or  speculative margin accounts
22    held by commodity  or  security  exchanges  on  behalf  of  a
23    licensee  or  failed licensee and any moneys due or to become
24    due to a  licensee  or  failed  licensee,  less  any  secured
25    financing  directly  associated  with those assets or moneys,
26    from any transactions on those exchanges.
27        For  purposes  of  this  Act,  storage  charges,   drying
28    charges,  price  later  contract  service  charges, and other
29    grain service charges received by or due  to  a  licensee  or
30    failed  licensee  shall not be deemed to be grain assets, nor
31    shall such charges be deemed to be proceeds from the sale  or
32    other  disposition  of  grain  by  a  licensee  or  a  failed
33    licensee,  or  to  have been directly or indirectly traceable
34    from, to have resulted from, or to have been derived in whole
 
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 1    or in part from, or otherwise related to, the sale  or  other
 2    disposition of grain by the licensee or failed licensee.
 3        "Grain  dealer"  means  a  person  who is licensed by the
 4    Department to engage in the business  of  buying  grain  from
 5    producers.
 6        "Grain  Indemnity  Trust  Account"  means a trust account
 7    established by the Director  under  Section  205-410  of  the
 8    Department  of  Agriculture Law (20 ILCS 205/205-410) that is
 9    used for the receipt and disbursement of moneys paid from the
10    Fund and proceeds from the liquidation of and collection upon
11    grain assets, equity assets, collateral, and or guarantees of
12    or relating to failed licensees.  The Grain  Indemnity  Trust
13    Account shall be used to pay valid claims, authorized refunds
14    from   the   Fund,   and  expenses  incurred  in  preserving,
15    liquidating, and collecting upon grain assets, equity assets,
16    collateral, and guarantees relating to failed licensees.
17        "Guarantor" means a person who assumes all or part of the
18    obligations of a licensee to claimants.
19        "Guarantee" means a document executed by a  guarantor  by
20    which the guarantor assumes all or part of the obligations of
21    a licensee to claimants.
22        "Incidental  grain  dealer"  means  a  grain  dealer  who
23    purchases  grain  only  in  connection  with  a  feed milling
24    operation and whose total purchases of grain  from  producers
25    during the grain dealer's fiscal year do not exceed $100,000.
26        "Licensed  storage  capacity"  means  the  maximum  grain
27    storage   capacity   measured  in  bushels  approved  by  the
28    applicable licensing agency for use by a warehouseman.
29        "Licensee" means a grain dealer or  warehouseman  who  is
30    licensed by the Department and a federal warehouseman that is
31    a  participant  in  the Fund, under subsection (c) of Section
32    30-10.
33        "Official  grain  standards"  means  the  official  grade
34    designations as adopted by the United  States  Department  of
 
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 1    Agriculture  under  the United States Grain Standards Act and
 2    regulations adopted under that Act (7 U.S.C. 71 et seq. and 7
 3    CFR 810.201 et seq.).
 4        "Permanent  storage  capacity"  means  the  capacity   of
 5    permanent  structures  available  for  storage  of grain on a
 6    regular and continuous basis, and measured in bushels.
 7        "Person" means any individual or entity,  including,  but
 8    not  limited  to,  a  sole  proprietorship,  a partnership, a
 9    corporation,  a  cooperative,  an  association,   a   limited
10    liability  company,  an estate, or a trust, or a governmental
11    agency.
12        "Price later contract" means a written contract  for  the
13    sale  of  grain whereby any part of the purchase price may be
14    established by the seller after delivery of the  grain  to  a
15    grain  dealer according to a pricing formula contained in the
16    contract.  Title to the grain passes to the grain  dealer  at
17    the time of delivery.  The precise form and the general terms
18    and conditions of the contract shall be established by rule.
19        "Producer"  means  the owner, tenant, or operator of land
20    who has an interest in  and  receives  all  or  part  of  the
21    proceeds from the sale of the grain produced on the land.
22        "Producer protection holding corporation" means a holding
23    corporation  to  receive, hold title to, and liquidate assets
24    of or relating to a  failed  licensee,  including  assets  in
25    reference  to  collateral  or guarantees relating to a failed
26    licensee.
27        "Regulatory Fund" means the fund  created  under  Article
28    35.
29        "Related  persons"  means  affiliates  of a licensee, key
30    persons of a licensee, owners of a licensee, and persons  who
31    have  control  over  a  licensee.   For  the purposes of this
32    definition:
33             (a)  "Affiliate" means a person who  has  direct  or
34        indirect  control  of  a  licensee,  is  controlled  by a
 
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 1        licensee, or is under common control with a licensee.
 2             (b)  "Key person" means an officer,  a  director,  a
 3        trustee,  a  partner, a proprietor, a manager, a managing
 4        agent, or the spouse of a  licensee.   An  officer  or  a
 5        director  of  an  entity  organized  or  operating  as  a
 6        cooperative,  however,  shall  not  be considered to be a
 7        "key person".
 8             (c)  "Owner" means the holder of: over  10%  of  the
 9        total  combined voting power of a corporation or over 10%
10        of the total value of shares of all classes of stock of a
11        corporation; over a 10% interest in a  partnership;  over
12        10% of the value of a trust computed actuarially; or over
13        10%  of  the  legal  or  beneficial interest in any other
14        business, association, endeavor,  or  entity  that  is  a
15        licensee.  For purposes of computing these percentages, a
16        holder  is  deemed  to  own stock or other interests in a
17        business  entity  whether  the  ownership  is  direct  or
18        indirect.
19             (d)  "Control" means the power to exercise authority
20        over or direct the management or policies of  a  business
21        entity.
22             (e)  "Indirect" means an interest in a business held
23        by the holder not through the holder's actual holdings in
24        the  business,  but  through  the  holder's  holdings  in
25        another business or other businesses.
26             (f)  Notwithstanding  any  other  provision  of this
27        Act, the term "related person" does not include a lender,
28        secured party, or other lien holder solely by  reason  of
29        the existence of the loan, security interest, or lien, or
30        solely  by  reason of the lender, secured party, or other
31        lien holder having or  exercising  any  right  or  remedy
32        provided  by  law  or  by  agreement with a licensee or a
33        failed licensee.
34        "Reserve Fund" means a separate and discrete fund  of  up
 
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 1    to $2,000,000 held by the Corporation as set forth in Section
 2    30-25.
 3        "Successor  agreement"  means  an  agreement  by  which a
 4    licensee succeeds  to  the  grain  obligations  of  a  former
 5    licensee.
 6        "Temporary storage space" means space measured in bushels
 7    and  used  for  6  months  or  less for storage of grain on a
 8    temporary basis due to  a  need  for  additional  storage  in
 9    excess of permanent storage capacity.
10        "Trust account" means the Grain Indemnity Trust Account.
11        "Valid  claim"  means  a  request  for  payment under the
12    provisions of this Code claim, submitted by a  claimant,  the
13    whose  amount  and  category of which have been determined by
14    the Department, to  the  extent  that  determination  is  not
15    subject  to  further  administrative  review  or appeal. Each
16    grain sale transaction and each storage obligation  shall  be
17    considered  a  separate and discrete request for payment even
18    though one or more requests are contained on one  claim  form
19    or are filed with the Department in one document.
20        "Warehouse"  means a building, structure, or enclosure in
21    which grain  is  stored  for  the  public  for  compensation,
22    whether  grain  of  different owners is commingled or whether
23    identity of different lots of grain is preserved.
24        "Warehouse receipt" means a receipt for  the  storage  of
25    grain issued by a warehouseman.
26        "Warehouseman" means a person who is licensed:
27             (a)  by  the Department to engage in the business of
28        storing grain for compensation; or
29             (b)  under the United States Warehouse Act  but  who
30        participates  in the Fund under subsection (c) of Section
31        30-10.
32    (Source: P.A. 91-213,  eff.  7-20-99;  91-239,  eff.  1-1-00;
33    92-16, eff. 6-28-01.)
 
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 1        (240 ILCS 40/1-15)
 2        Sec.  1-15.  Powers  and duties of Director. The Director
 3    has all powers necessary and proper to fully and  effectively
 4    execute  the provisions of this Code and has the general duty
 5    to implement this Code.  The  Director's  powers  and  duties
 6    include, but are not limited to, the following:
 7        (1)  The  Director may, upon application, issue or refuse
 8    to issue licenses under  this  Code,  and  the  Director  may
 9    extend,   renew,   reinstate,   suspend,  revoke,  or  accept
10    voluntary surrender of licenses under this Code.
11        (2)  The Director shall examine and inspect each licensee
12    at least once each calendar year. The examination shall cover
13    all  aspects  of  the  grain  operations  of  the   licensee,
14    including  but  not necessarily limited to options trades and
15    programs and farmer marketing programs.
16        The  Department  shall  perform  one  of   3   types   of
17    examinations of licensees.
18             (A)  Basic  Examination. The basic examination shall
19        be performed when the licensee's merchandising and  trade
20        practices   involve  minimal  market  risk,  which  might
21        include those situations in which the licensee uses  cash
22        back-to-back   contracts,  traditional  hedges  with  the
23        Chicago Board of Trade, and price  later  contracts.  The
24        specific   components   and   guidelines   of  the  basic
25        examination are to be as provided by rule, but shall at a
26        minimum  include  verification  of  grain   quality   and
27        quantity,    reconciliation   of   records   with   grain
28        transactions, computation of current ratios, and checking
29        of posting procedures for accuracy.
30             (B)  Intermediate  Examination.   The   intermediate
31        examination   shall  be  performed  when  the  licensee's
32        merchandising and trade practices  involve  an  increased
33        amount  of  risk, which might include those situations in
34        which  the  licensee  uses   guaranteed   minimum   price
 
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 1        contracts,  purchases  options,  or  writes options. This
 2        examination shall include all those things  performed  as
 3        part  of the basic examination. In addition, the specific
 4        components and guidelines of the intermediate examination
 5        are to be as provided by rule, but  shall  at  a  minimum
 6        include  verification  of  grain  quality  and  quantity,
 7        reconciliation  of  records  with grain transactions, and
 8        checking of posting procedures for accuracy.
 9             (C)  Advanced Examination. The advanced  examination
10        shall  be performed when the licensee's merchandising and
11        grain trading practices  involve  the  most  risk,  which
12        might  include those situations in which the licensee has
13        discretionary  trading  authority  from  producers,  uses
14        premium offer  type  contracts,  or  has  contracts  with
15        producers   that   cover   multiple   crop   years.  This
16        examination shall include all those things  performed  as
17        part  of  the  basic  examination  and  the  intermediate
18        examination.  In  addition,  the  specific components and
19        guidelines of the advanced examination are to be provided
20        by rule, but shall at a minimum include grain market risk
21        evaluation  and  appropriate  levels  thereof   for   the
22        licensee and adequacy of internal controls.
23        Using  these  guidelines,  the Department shall determine
24    the level of examination to be applied to each  licensee.  In
25    addition,  the Department may, in its sole discretion, engage
26    the services of accounting  experts,  grain  risk  management
27    experts,  or  both  as  part  of any intermediate or advanced
28    examination.  The Regulatory Fund may be used as a source  of
29    payment  for  the  services of accounting experts, grain risk
30    management experts, or both.
31        The Director may inspect the premises used by a  licensee
32    at  any  time.  The books, accounts, records, and papers of a
33    licensee are at all times during business  hours  subject  to
34    inspection  by  the  Director.   Each  licensee  may  also be
 
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 1    required to make reports of its activities, obligations,  and
 2    transactions  that  are  deemed  necessary by the Director to
 3    determine whether the interests of producers and the  holders
 4    of   warehouse   receipts   are   adequately   protected  and
 5    safeguarded.  The Director may take action  or  issue  orders
 6    that  in the opinion of the Director are necessary to prevent
 7    fraud upon or discrimination against producers or  depositors
 8    of  grain  by  a  licensee.  The  sole and exclusive means of
 9    halting the warehouse and grain dealer business activities of
10    a licensee, however, are set forth in Section 15-40  relating
11    to suspension and revocation of licenses.
12        (3)  The Director may, upon his or her initiative or upon
13    the  written  verified  complaint of any person setting forth
14    facts that if proved would constitute grounds for  a  refusal
15    to issue or renew a license or for a suspension or revocation
16    of  a license, investigate the actions of any person applying
17    for, holding, or claiming to hold a license  or  any  related
18    party of that person.
19        (4)  The  Director  (but not the Director's designee) may
20    issue subpoenas and bring before the  Department  any  person
21    and  take testimony either at an administrative hearing or by
22    deposition with witness fees and mileage fees and in the same
23    manner as prescribed in the Code  of  Civil  Procedure.   The
24    Director  or  the Director's designee may administer oaths to
25    witnesses at any proceeding that the Department is authorized
26    by law to conduct.  The  Director  (but  not  the  Director's
27    designee)  may  issue  subpoenas  duces  tecum to command the
28    production of records  relating  to  a  licensee,  guarantor,
29    related business, related person, or related party. Subpoenas
30    are subject to the rules of the Department.
31        (5)  Notwithstanding   other   judicial   remedies,   the
32    Director  may  file  a  complaint  and  apply for a temporary
33    restraining order  or  preliminary  or  permanent  injunction
34    restraining   or  enjoining  any  person  from  violating  or
 
HB1458 Enrolled            -14-      LRB093 03693 RCE 07393 b
 1    continuing to violate this Code or its rules.
 2        (6)  The Director shall act  as  Trustee  for  the  Trust
 3    Account,  act  as  Trustee  over  all collateral, guarantees,
 4    grain assets, and equity assets held by  the  Department  for
 5    the  benefit  of  claimants,  and exercise certain powers and
 6    perform related duties under Section 20-5 of  this  Code  and
 7    Section 205-410 of the Department of Agriculture Law (20 ILCS
 8    205/205-410),  except  that  the  provisions of the Trust and
 9    Trustees Act do not apply to the Trust Account or  any  other
10    trust created under this Code.
11        (7)  The  Director shall personally serve as president of
12    the Corporation.
13        (8)  The Director shall collect and deposit all  monetary
14    penalties,  printer registration fees, funds, and assessments
15    authorized under this Code into the Fund.
16        (9)  The Director may initiate any  action  necessary  to
17    pay  refunds from the Fund. The Director may initiate refunds
18    for errors of assessments  that  do  not  exceed  $2,000  per
19    licensee,  lender,  or  grain seller without authorization by
20    the Board.
21        (10)  The Director shall maintain a  holding  corporation
22    to  receive,  hold  title  to,  and  liquidate  assets  of or
23    relating to a failed licensee, including assets in  reference
24    to  collateral  or  guarantees, and deposit the proceeds into
25    the Fund.
26        (11)  The  Director  may  initiate,  participate  in,  or
27    withdraw from any proceedings to liquidate and  collect  upon
28    grain  assets,  equity  assets,  collateral,  and  guarantees
29    relating to a failed licensee, including, but not limited to,
30    all  powers  needed  to  carry  out the provisions of Section
31    20-15.
32        (12)  The Director, as Trustee or otherwise, may take any
33    action that may be reasonable or appropriate to enforce  this
34    Code and its rules.
 
HB1458 Enrolled            -15-      LRB093 03693 RCE 07393 b
 1    (Source:  P.A.  91-213,  eff.  7-20-99;  91-239, eff. 1-1-00;
 2    92-16, eff. 6-28-01.)

 3        (240 ILCS 40/1-20)
 4        Sec.  1-20.  Administrative  review  and  venue.    Final
 5    administrative  decisions  of  the  Department are subject to
 6    judicial review under  Article  III  of  the  Code  of  Civil
 7    Procedure  and its rules.  The term "administrative decision"
 8    is  defined  as  in  Section  3-101  of  the  Code  of  Civil
 9    Procedure.  An  action  to  review  a  final   administrative
10    decision  under  this  Code  may  be commenced in the Circuit
11    Court of any county in which  any  part  of  the  transaction
12    occurred  that gave rise to the claim that was the subject of
13    the proceedings before the Department.
14    (Source: P.A. 89-287, eff. 1-1-96.)

15        (240 ILCS 40/1-25)
16        Sec. 1-25.  Rules.  The Department may  promulgate  rules
17    that  are necessary for the implementation and administration
18    of this Code.
19        The Department shall  adopt  rules  governing  electronic
20    systems  under  which  electronic  warehouse  receipts may be
21    issued and transferred.  Licensees  shall  not  be  required,
22    however, to issue or use electronic warehouse receipts. These
23    rules  shall be adopted after the United States Department of
24    Agriculture  adopts  regulations  concerning  an   electronic
25    receipt transfer system pursuant to 7 U.S.C. 242, 250.
26    (Source: P.A. 89-287, eff. 1-1-96.)

27        (240 ILCS 40/5-5)
28        Sec. 5-5.   Licenses required; applications; exemptions.
29        (a)  Except  as  provided in subsection (e), a person may
30    not engage in the business of buying grain from producers, or
31    storing  grain  for  compensation,  as  a  grain  dealer,  an
 
HB1458 Enrolled            -16-      LRB093 03693 RCE 07393 b
 1    incidental grain dealer, or a warehouseman in  the  State  of
 2    Illinois  without  a  license issued by the Department, or in
 3    the case of a federal  warehouseman,  by  the  United  States
 4    government.
 5        (b)  An application for a license shall be filed with the
 6    Department,  shall be in a form prescribed by the Department,
 7    and shall set forth the name of the applicant, the  directors
 8    and  officers if the applicant is a corporation, the partners
 9    if the  applicant  is  a  partnership,  the  members  of  the
10    governing body and all persons with management or supervisory
11    authority  if  the  applicant  is  an  entity  other  than  a
12    corporation  or  partnership,  the  location of the principal
13    office or place of business of the applicant, the location of
14    the principal office or place of business of the applicant in
15    Illinois, and the location or locations in Illinois at  which
16    the  applicant  proposes to engage in business as a licensee,
17    the fiscal year of the applicant, the kind of grain that  the
18    applicant  proposes  to  buy,  handle,  or store, the type of
19    business  that  the  applicant  proposes  to   conduct,   and
20    additional  information  that  the  Department may require by
21    rule.
22        (c)  The  application  for  a  warehouseman  shall  state
23    whether the applicant proposes to store grain only for others
24    or for the applicant and for others and shall also state  the
25    storage  capacity  for  which  the  applicant  desires  to be
26    licensed.
27        (d)  If an applicant has been engaged in  business  as  a
28    grain  dealer  for  one  year  or more, the application shall
29    state the aggregate dollar amount paid to producers for grain
30    during the applicant's last completed fiscal  year.   If  the
31    applicant has been engaged in business for less than one year
32    or  has  not  engaged  in  the  business of buying grain from
33    producers as a grain dealer, the application shall state  the
34    estimated aggregate dollar amount to be paid by the applicant
 
HB1458 Enrolled            -17-      LRB093 03693 RCE 07393 b
 1    to  producers  for  grain purchased from producers during the
 2    applicant's first fiscal year.
 3        (e)  The following persons are exempt from being licensed
 4    as a grain dealer or incidental grain dealer:
 5             (1)  A person purchasing grain from  producers  only
 6        for resale as agricultural seed.
 7             (2)  A producer purchasing grain from producers only
 8        for its own use as seed or feed.
 9    (Source: P.A. 89-287, eff. 1-1-96.)

10        (240 ILCS 40/5-10)
11        Sec.  5-10.   Financial statement and fee requirements to
12    obtain or amend a license.
13        (a)  Applications for a new license to operate as a Class
14    I warehouseman or grain dealer shall be accompanied  by  each
15    of the following:
16             (1)  A financial statement made within 90 days after
17        the   applicant's   fiscal   year  end  and  prepared  in
18        conformity with generally accepted accounting  principles
19        following  an  examination  conducted  in accordance with
20        generally accepted auditing standards that  has  attached
21        the  unqualified  opinion,  or a qualified opinion if the
22        qualification, in the sole discretion of the  Department,
23        does  not  unduly diminish the financial stability of the
24        licensee or applicant, , or other opinion  acceptable  to
25        the   Department,  of  an  independent  certified  public
26        accountant licensed  under  Illinois  law  or  an  entity
27        permitted  to engage in the practice of public accounting
28        under item (b)(3) of Section 14 of  the  Illinois  Public
29        Accounting Act.
30                  (A)  If  the  applicant  has  been  engaged  in
31             business  prior  to  the  application, the financial
32             statement shall set forth the financial position and
33             results in operations for  the  most  recent  fiscal
 
HB1458 Enrolled            -18-      LRB093 03693 RCE 07393 b
 1             year  of  the  applicant.   The  financial statement
 2             shall consist  of  a  balance  sheet,  statement  of
 3             income, statement of retained earnings, statement of
 4             cash flows, notes to financial statements, and other
 5             information as required by the Department.
 6                  (B)  If  the  applicant has not been engaged in
 7             business prior to  the  application,  the  financial
 8             statement shall consist of a balance sheet, notes to
 9             financial   statements,  and  other  information  as
10             required by the Department.
11             (2)  An  application  fee  of  $200  $100  for  each
12        license, $100  of  which  shall  be  deposited  into  the
13        General  Revenue  Fund  and the balance of which shall be
14        deposited into the Regulatory Fund.
15             (3)  A  fee  for  each  required  certificate.   The
16        amount  of  the  fee  for  each  certificate   shall   be
17        established  by  rule.   Fees shall be deposited into the
18        Regulatory Fund.
19        (b)  Applications for a new license to operate as a Class
20    II  warehouseman  or  incidental  grain   dealer   shall   be
21    accompanied by:
22             (1)  A  financial  statement  prepared in accordance
23        with the requirements of item (a)(1) of Section 5-10  or,
24        instead, a financial statement made within 90 days of the
25        date  of  the  application  prepared  or  certified by an
26        independent accountant and verified  under  oath  by  the
27        applicant.   The  financial statement shall set forth the
28        balance sheet and other information with respect  to  the
29        financial  resources of the applicant that the Department
30        may require.   If  the  applicant  has  been  engaged  in
31        business   prior   to   the  application,  the  financial
32        statement shall also set forth a statement of  income  of
33        the applicant.
34             (2)  An  application  fee  of  $150  $100  for  each
 
HB1458 Enrolled            -19-      LRB093 03693 RCE 07393 b
 1        license,  $100  of  which  shall  be  deposited  into the
 2        General Revenue Fund and the balance of  which  shall  be
 3        deposited into the Regulatory Fund.
 4             (3)  A  fee  for  each  required  certificate.   The
 5        amount   of   the  fee  for  each  certificate  shall  be
 6        established by rule.  Fees shall be  deposited  into  the
 7        Regulatory Fund.
 8        (c)  Applications  to  amend  a  warehouseman's  licensed
 9    storage  capacity,  including  applications  in  reference to
10    temporary storage and emergency storage or to otherwise amend
11    a license, shall be accompanied by a filing fee of $100,  $50
12    of which shall be deposited into the General Revenue Fund and
13    the  balance  of which shall be deposited into the Regulatory
14    Fund $50.
15    (Source: P.A. 89-287, eff. 1-1-96.)

16        (240 ILCS 40/5-15)
17        Sec. 5-15.  Renewal of license.
18        (a)  The application for renewal of a  license  shall  be
19    filed  with  the Department annually within 90 days after the
20    licensee's fiscal year end.  The Department may, upon request
21    of the licensee, payment of an extension fee of $100 $50, $50
22    of which shall be deposited into the General Revenue Fund and
23    the balance of which shall be deposited into  the  Regulatory
24    Fund,  and  delivery  to  the  Department  of  a  preliminary
25    financial  statement  compiled  reviewed  by  an  independent
26    certified public accountant licensed under Illinois law or an
27    entity   permitted  to  engage  in  the  practice  of  public
28    accounting under item (b)(3) of Section 14  of  the  Illinois
29    Public  Accounting  Act  or,  in  the  case  of  a  Class  II
30    warehouseman   or  incidental  grain  dealer,  a  preliminary
31    financial statement reviewed  by  an  independent  accountant
32    that  meets  the  financial requirements of subsection (b) of
33    Section 5-25, extend, for up to but not  exceeding  30  days,
 
HB1458 Enrolled            -20-      LRB093 03693 RCE 07393 b
 1    the  period  of time during which the application for renewal
 2    of a license may  be  filed.  The  Department,  however,  may
 3    provide  by  rule  for  reducing  the  filing  period  for an
 4    application for renewal of a license to no less than 60  days
 5    after  the  licensee's  fiscal  year  end  if  the Department
 6    determines that an applicant has financial  deficiencies,  or
 7    there are other factors, that would create a substantial risk
 8    of  failure loss to potential claimants.  The Department must
 9    give written notice of  the  reduced  filing  period  to  the
10    licensee at least 60 days before the earlier deadline imposed
11    by  the  Department  to file the application for renewal of a
12    license.  Notice is deemed given  when  mailed  by  certified
13    mail,  return  receipt requested, properly addressed and with
14    sufficient postage attached.
15        (b)  The application for renewal shall be accompanied  by
16    the financial statement required by Section 5-20.
17        (c)  Failure  to  meet all of the conditions to renew the
18    license may result in a denial of renewal of the license. The
19    licensee may request an administrative hearing to dispute the
20    denial of renewal, after which the Director  shall  enter  an
21    order either renewing or refusing to renew the license.
22    (Source: P.A. 89-287, eff. 1-1-96.)

23        (240 ILCS 40/5-20)
24        Sec.  5-20.  Financial statement and fee requirements for
25    the renewal of a license.
26        (a)  Applications for a renewal of a license  to  operate
27    as   a   Class  I  warehouseman  or  grain  dealer  shall  be
28    accompanied by each of the following:
29             (1)  A financial statement made within 90 days after
30        the  applicant's  fiscal  year  end   and   prepared   in
31        conformity  with generally accepted accounting principles
32        following an examination  conducted  in  accordance  with
33        generally  accepted  auditing standards that has attached
 
HB1458 Enrolled            -21-      LRB093 03693 RCE 07393 b
 1        the unqualified opinion, or a qualified  opinion  if  the
 2        qualification,  in the sole discretion of the Department,
 3        does not unduly diminish the financial stability  of  the
 4        licensee  or  applicant, , or other opinion acceptable to
 5        the  Department,  of  an  independent  certified   public
 6        accountant  licensed  under  Illinois  law  or  an entity
 7        permitted to engage in the practice of public  accounting
 8        under  item  (b)(3)  of Section 14 of the Illinois Public
 9        Accounting Act.  The financial statement shall consist of
10        a  balance  sheet,  statement  of  income,  statement  of
11        retained earnings, statement  of  cash  flows,  notes  to
12        financial  statements,  and other information as required
13        by the Department.  The  financial  statement  shall  set
14        forth  the  financial  position and results in operations
15        for the most recent fiscal year of the applicant.
16             (2)  A fee of $200 $100 for each  license,  $100  of
17        which  shall  be  deposited into the General Revenue Fund
18        and the balance of which  shall  be  deposited  into  the
19        Regulatory Fund.
20             (3)  A  fee  for  each  required  certificate.   The
21        amount   of   the  fee  for  each  certificate  shall  be
22        established by rule.  Fees shall be  deposited  into  the
23        Regulatory Fund.
24        (b)  Applications  for  a renewal of a license to operate
25    as a Class II warehouseman or incidental grain  dealer  shall
26    be accompanied by each of the following:
27             (1)  A  financial  statement  prepared in accordance
28        with the requirements of item (a)(1) of Section 5-10  or,
29        instead,  a financial statement made within 90 days after
30        the date of the application prepared or certified  by  an
31        independent  accountant  and  verified  under oath by the
32        applicant.  The financial statement shall set  forth  the
33        balance  sheet  and  statement of income of the applicant
34        and other  information  with  respect  to  the  financial
 
HB1458 Enrolled            -22-      LRB093 03693 RCE 07393 b
 1        resources  of  the  applicant  that  the  Department  may
 2        require.
 3             (2)  A  fee  of  $150 $100 for each license, $100 of
 4        which shall be deposited into the  General  Revenue  Fund
 5        and  the  balance  of  which  shall be deposited into the
 6        Regulatory Fund.
 7             (3)  A  fee  for  each  required  certificate.   The
 8        amount  of  the  fee  for  each  certificate   shall   be
 9        established  by  rule.   Fees shall be deposited into the
10        Regulatory Fund.
11    (Source: P.A. 89-287, eff. 1-1-96.)

12        (240 ILCS 40/5-25)
13        Sec. 5-25.  Licensing standards  and  requirements.   The
14    Department  shall  issue,  amend,  or  renew a license if the
15    Department is satisfied that the applicant or licensee  meets
16    the   standards   and  requirements  of  this  Section.   The
17    standards and requirements of subsections (a) and (b) of this
18    Section must be observed  and  complied  with  at  all  times
19    during the term of the license.
20        (a)  General requirements.
21             (1)  The  applicant  or  licensee  must  have a good
22        business reputation, have not been involved  in  improper
23        manipulation  of    books  and  records or other improper
24        business  practices,  and  have  the  qualifications  and
25        background essential for the conduct of the business of a
26        licensee.  The Department must be  satisfied  as  to  the
27        business  reputation,  background,  and qualifications of
28        the management and principal officers of the applicant or
29        licensee.   The Department may obtain criminal  histories
30        of  management and principal officers of the applicant or
31        licensee.
32             (2)  The  applicant  or  licensee  must  maintain  a
33        permanent business location in the State of Illinois.  At
 
HB1458 Enrolled            -23-      LRB093 03693 RCE 07393 b
 1        Each location where the licensee is transacting business,
 2        that place of business shall remain open  from  at  least
 3        one-half  hour  before  the  daily  opening  to  at least
 4        one-half hour after the  daily  closing  of  the  Chicago
 5        Board   of   Trade,  unless  otherwise  approved  by  the
 6        Department.
 7             (3)  The applicant or licensee must  have  insurance
 8        on  all grain in its possession or custody as required in
 9        this Code.
10             (4)  The applicant or licensee shall  at  all  times
11        keep  sufficiently  detailed books and records to reflect
12        compliance with  all   requirements  of  this  Code.  The
13        Department  may  require  that  certain  records  located
14        outside  the  State  of Illinois, if any, be brought to a
15        specified  location  in  Illinois  for  review   by   the
16        Department.
17             (5)  The  applicant  or  licensee  and  each  of its
18        officers, directors, partners, and managers must not have
19        been found guilty of a criminal violation of  this  Code,
20        any  of  its  predecessor  statutes,  or  any  similar or
21        related statute or law of the United States or any  other
22        state  or  jurisdiction  within 10 3 years of the date of
23        application for the issuance or renewal of a license.
24             (6)  The applicant  or  licensee  and  each  of  its
25        officers,  directors, managers, and partners, that at any
26        one time have been a licensee under this Code or  any  of
27        its  predecessor  statutes, or licensed under any similar
28        or related statute or law of the  United  States  or  any
29        other  state  or  jurisdiction,  must  not  have  had its
30        license terminated or revoked by the Department,  by  the
31        United  States,  or  by  any other state or jurisdiction,
32        within 2  years  of  the  date  of  application  for  the
33        issuance  or  renewal  of  a  license leaving unsatisfied
34        indebtedness to claimants.
 
HB1458 Enrolled            -24-      LRB093 03693 RCE 07393 b
 1             (7)  The applicant  or  licensee  and  each  of  its
 2        officers, directors, managers, and partners must not have
 3        been  an  officer,  director,  manager,  or  partner of a
 4        former licensee under this Code or any of its predecessor
 5        statutes, or of a business formerly  licensed  under  any
 6        similar or related statute or law of the United States or
 7        any  other  state  or  jurisdiction, that had its license
 8        terminated or revoked by the Department,  by  the  United
 9        States,  or  by any other state or jurisdiction, within 2
10        years of the date of  application  for  the  issuance  or
11        renewal of a license, leaving unsatisfied indebtedness to
12        claimants,  unless  the  applicant  or  licensee  makes a
13        sufficient showing to the Department that the  applicable
14        person   or   related   party   was  not  materially  and
15        substantially involved as a  principal  in  the  business
16        that  had  its license terminated or revoked.  An interim
17        or temporary manager that is employed by  a  licensee  to
18        reorganize  the  licensee or to manage the licensee until
19        its business is sold, transferred, or liquidated  is  not
20        in  violation  of  this  subsection (7) solely because of
21        that employment as an interim or temporary manager.
22        (b)  Financial requirements.
23             (1)  The applicant or licensee's financial statement
24        must show a current ratio of the total  adjusted  current
25        assets  to  the  total adjusted current liabilities of at
26        least one to one.
27                  (A)  Adjusted   current   assets    shall    be
28             calculated  by  deducting  from  the  stated current
29             assets shown on the balance sheet submitted  by  the
30             applicant   or   licensee   any  current  asset,  as
31             calculated in item  (B)  of  this  subdivision  (1),
32             resulting   from  notes  receivable  from    related
33             persons, accounts receivable from  related  persons,
34             stock   subscriptions   receivable,  and  any  other
 
HB1458 Enrolled            -25-      LRB093 03693 RCE 07393 b
 1             related person receivables.
 2                  (B)  A disallowed current asset shall be netted
 3             against any related liability and the net result, if
 4             an asset,  shall  be  subtracted  from  the  current
 5             assets.
 6             (2)  The applicant or licensee's financial statement
 7        and  balance sheet must show an adjusted debt to adjusted
 8        equity ratio of not more than 3 to one.
 9                  (A)  Adjusted  debt  shall  be  calculated   by
10             totaling   current  and  long-term  liabilities  and
11             reducing the total liabilities, up to the amount  of
12             current  liabilities, by the liquid assets appearing
13             in the current asset section of  the  balance  sheet
14             submitted  by  the  applicant  or licensee.  For the
15             purposes of this Section, liquid assets include  but
16             are not limited to cash, depository accounts, direct
17             obligations   of  the  U.S.  Government,  marketable
18             securities,  grain  assets,   balances   in   margin
19             accounts, and tax refunds.
20                  (B)  Adjusted  equity  shall  be  calculated by
21             deducting from the stated net  worth  shown  on  the
22             balance sheet submitted by the applicant or licensee
23             any  asset,  as  calculated  in  item  (C)  of  this
24             subdivision  (2),  resulting  from  notes receivable
25             from  related  persons,  accounts  receivable   from
26             related  persons, stock subscriptions receivable, or
27             any other related person receivables.
28                  (C)  A disallowed asset shall be netted against
29             any related liability and  the  net  result,  if  an
30             asset,  shall  be  subtracted  from  the  stated net
31             worth,  or  if  a  liability  it  shall   remain   a
32             liability.
33             (3)  An  applicant or licensee must have an adjusted
34        equity of at least $50,000 as determined  by  the  method
 
HB1458 Enrolled            -26-      LRB093 03693 RCE 07393 b
 1        specified  in item (b)(2) of this Section. Beginning with
 2        the first fiscal year of a licensee  ending  after  2004,
 3        the  adjusted  equity, as defined by the method specified
 4        in item (b)(2) of this Section,  shall  be  increased  by
 5        $10,000  per  fiscal year until the adjusted equity of an
 6        applicant or licensee is at least $100,000.
 7             (4)  For  the  purposes  of  this   Section,   notes
 8        receivable from related persons, accounts receivable from
 9        related persons, and any other related person receivables
10        are  not a disallowed asset if the related person is also
11        a licensee and meets all of the financial requirements of
12        this Code.
13             (5)  An applicant for a new  license  shall  not  be
14        permitted  to  collateralize  the  requirements  of items
15        (b)(1) and (b)(3) of this Section in order to satisfy the
16        requirements for a new license.
17    (Source: P.A. 89-287, eff. 1-1-96.)

18        (240 ILCS 40/5-30)
19        Sec.  5-30.    Grain  Insurance  Fund  assessments.   The
20    Illinois  Grain  Insurance   Fund   is   established   as   a
21    continuation  of  the  fund  created under the Illinois Grain
22    Insurance Act, now repealed. Licensees, and applicants for  a
23    new  license,  first  sellers  of  grain  to grain dealers at
24    Illinois  locations,  and  lenders  to  licensees  shall  pay
25    assessments as set forth in this Section.
26        (a)  Subject  to  subsection  (e)  of  this  Section,   a
27    licensee  that  is newly licensed after the effective date of
28    this Code shall  pay  an  assessment  into  the  Fund  for  3
29    consecutive  years.   These  assessments  are known as "newly
30    licensed assessments".  Except as provided  in  item  (6)  of
31    subsection   (b)  of  this  Section,  the  first  installment
32    assessment shall be  paid  at  the  time  of  or  before  the
33    issuance  of a new license, the second installment assessment
 
HB1458 Enrolled            -27-      LRB093 03693 RCE 07393 b
 1    shall be paid on or before the first anniversary date of  the
 2    issuance  of  the  new  license,  and  the  third installment
 3    assessment shall be paid on or before the second  anniversary
 4    date of the issuance of the new license.  For a grain dealer,
 5    the initial payment of each of the 3 installments assessments
 6    shall  be  based  upon  the  total  estimated  value of grain
 7    purchases by the grain dealer for the  applicable  year  with
 8    the  final  installment  assessment  amount determined as set
 9    forth in item (6) of subsection (b) of this  Section.   After
10    the  licensee  has  paid  or  was  required to pay the last 3
11    installments  of  the  newly  licensed  assessments  first  3
12    assessments to the Department for payment into the Fund,  the
13    licensee  shall  be  subject to subsequent assessments as set
14    forth in subsection (d) of this Section.
15        (b)  Grain dealer newly licensed assessments.
16             (1)  The first installment assessment  for  a  grain
17        dealer shall be an amount equal to:
18                  (A)  $0.000145 multiplied by the total value of
19             grain  purchases for the grain dealer's first fiscal
20             year as shown in the final financial  statement  for
21             that  year  provided to the Department under Section
22             5-20; and
23                  (B)  $0.000255 multiplied by  that  portion  of
24             the  value of grain purchases for the grain dealer's
25             first fiscal year that  exceeds the adjusted  equity
26             of  the  licensee  multiplied by 20, as shown on the
27             final financial statement for the  licensee's  first
28             fiscal year provided to the Department under Section
29             5-20.
30             (2)  The  minimum  amount  assessment  for the first
31        installment assessment  shall  be  $500  $1,000  and  the
32        maximum shall be $15,000 $10,000.
33             (3)  The  second  installment assessment for a grain
34        dealer shall be an amount equal to:
 
HB1458 Enrolled            -28-      LRB093 03693 RCE 07393 b
 1                  (A)  $0.0000725 multiplied by the  total  value
 2             of  grain  purchases  for  the grain dealer's second
 3             fiscal  year  as  shown  in  the   final   financial
 4             statement  for  that year provided to the Department
 5             under Section 5-20; and
 6                  (B)  $0.0001275 multiplied by that  portion  of
 7             the  value of grain purchases for the grain dealer's
 8             second fiscal year that exceeds the adjusted  equity
 9             of  the  licensee  multiplied by 20, as shown on the
10             final financial statement for the licensee's  second
11             fiscal year provided to the Department under Section
12             5-20.
13             (4)  The  third  installment  assessment for a grain
14        dealer shall be an amount equal to:
15                  (A)  $0.0000725 multiplied by the  total  value
16             of  grain  purchases  for  the  grain dealer's third
17             fiscal  year  as  shown  in  the   final   financial
18             statement  for  that year provided to the Department
19             under Section 5-20; and
20                  (B)  $0.0001275 multiplied by that  portion  of
21             the  value of grain purchases for the grain dealer's
22             third fiscal year that exceeds the  adjusted  equity
23             of  the  licensee  multiplied by 20, as shown on the
24             final financial statement for the  licensee's  third
25             fiscal year.
26             (5)  The  minimum  amount  of  the  second and third
27        installments assessments shall be $250 $500 per year  and
28        the maximum for each year shall be $7,500 $5,000.
29             (6)  Each  of the newly licensed first 3 assessments
30        shall be adjusted up or down based upon the actual annual
31        grain purchases for each  year  as  shown  in  the  final
32        financial   statement  for  that  year  provided  to  the
33        Department under Section 5-20.  The adjustments shall  be
34        determined  by  the Department within 30 days of the date
 
HB1458 Enrolled            -29-      LRB093 03693 RCE 07393 b
 1        of approval of renewal of a  license.  Refunds  shall  be
 2        paid   out   of   the  Fund  within  60  days  after  the
 3        Department's determination.  Additional amounts owed  for
 4        any  installment assessments shall be paid within 30 days
 5        after notification  by  the  Department  as  provided  in
 6        subsection (f) of this Section.
 7             (7)  For the purposes of grain dealer newly licensed
 8        assessments  under  subsection  (b)  of this Section, the
 9        total value of grain purchases shall be the  total  value
10        of  first time grain purchases by Illinois locations from
11        producers.
12             (8)  The second and third installments shall be paid
13        to the Department within 60 days after the date posted on
14        the written notice of assessment.  The  Department  shall
15        immediately deposit all paid installments into the Fund.
16        (c)  Warehouseman newly licensed assessments.
17             (1)  The  first  assessment for a warehouseman shall
18        be an amount equal to:
19                  (A)  $0.00085 multiplied by the total permanent
20             storage capacity of the warehouseman at the time  of
21             license issuance; and
22                  (B)  $0.00099 multiplied by that portion of the
23             permanent  storage  capacity  of the warehouseman at
24             the  time  of  license  issuance  that  exceeds  the
25             adjusted equity of the licensee multiplied by 5, all
26             as shown on the final financial  statement  for  the
27             licensee  provided  to  the Department under Section
28             5-10.
29             (2)  The minimum amount  assessment  for  the  first
30        installment  assessment  shall  be  $500  $1,000  and the
31        maximum shall be $15,000 $10,000.
32             (3)  The second and third  installments  assessments
33        shall be an amount equal to:
34                  (A)  $0.000425    multiplied   by   the   total
 
HB1458 Enrolled            -30-      LRB093 03693 RCE 07393 b
 1             permanent storage capacity of  the  warehouseman  at
 2             the time of license issuance; and
 3                  (B)  $0.000495  multiplied  by  that portion of
 4             the  permanent  licensed  storage  capacity  of  the
 5             warehouseman at the time of  license  issuance  that
 6             exceeds   the   adjusted   equity  of  the  licensee
 7             multiplied by 5, as shown  on  the  final  financial
 8             statement  for  the licensee's last completed fiscal
 9             year provided to the Department under Section 5-20.
10             (4)  The minimum amount assessment  for  the  second
11        and third installments assessments shall be $250 $500 per
12        installment   assessment   and   the   maximum  for  each
13        installment assessment shall be $7,500 $5,000.
14             (5)  Every warehouseman shall pay an assessment when
15        increasing available permanent  storage  capacity  in  an
16        amount  equal to $0.001 multiplied by the total number of
17        bushels to be added to permanent storage  capacity.   The
18        minimum  assessment  on any increase in permanent storage
19        capacity shall be $50 and the maximum assessment shall be
20        $20,000.  The  assessment  based  upon  an  increase   in
21        permanent storage capacity shall be paid at or before the
22        time  of  approval  of  the increase in permanent storage
23        capacity.  This assessment  on  the  increased  permanent
24        storage capacity does not relieve the warehouseman of any
25        assessments  as  set  forth  in  subsection  (d)  of this
26        Section.
27             (6)  Every warehouseman shall pay an  assessment  of
28        $0.0005  per  bushel  when  increasing  available storage
29        capacity by use of temporary storage space.  The  minimum
30        assessment on temporary storage space shall be $100.  The
31        assessment  based  upon  temporary storage space shall be
32        paid at or before the time of approval of the  amount  of
33        the  temporary  storage  space.    This assessment on the
34        temporary storage space capacity  does  not  relieve  the
 
HB1458 Enrolled            -31-      LRB093 03693 RCE 07393 b
 1        warehouseman   of   any   assessments  as  set  forth  in
 2        subsection (d) of this Section.
 3             (7)  Every warehouseman shall pay an  assessment  of
 4        $0.001  per  bushel  of  emergency    storage space.  The
 5        minimum assessment on any emergency storage  space  shall
 6        be  $100.   The  assessment  based upon emergency storage
 7        space shall be paid at or before the time of approval  of
 8        the   amount   of  the  emergency  storage  space.   This
 9        assessment  on  the  emergency  storage  space  does  not
10        relieve the warehouseman of any assessments as set  forth
11        in subsection (d) of this Section.
12             (8)  The second and third installments shall be paid
13        to the Department within 60 days after the date posted on
14        the  written  notice  of assessment. The Department shall
15        immediately deposit all paid installments into the Fund.
16        (d)  Grain dealer  subsequent  assessments;  warehouseman
17    subsequent assessments Subsequent assessments.
18             (1)  Subject  to  paragraph  (4)  of this subsection
19        (d), if on the first working day of  a  calendar  quarter
20        when  a  licensee is not already subject to an assessment
21        under this subsection (d) (the  assessment  determination
22        date),  if the equity in the Fund is less than $6,000,000
23        below $3,000,000 on September  1st  of  any  year,  every
24        grain  dealer  who  has, or was required to have, already
25        paid  the  newly  licensed  first,  second,   and   third
26        assessments  shall  be  assessed  by  the Department in a
27        total an amount equal to:
28                  (A)  $0.0000725 multiplied by the  total  value
29             of  grain  purchases  for  the  grain  dealer's last
30             completed  fiscal  year  prior  to  the   assessment
31             determination  date  as shown in the final financial
32             statement for that year provided to  the  Department
33             under Section 5-20; and
34                  (B)  $0.0001275  multiplied  by that portion of
 
HB1458 Enrolled            -32-      LRB093 03693 RCE 07393 b
 1             the value of grain purchases for the grain  dealer's
 2             last  completed  fiscal year prior to the assessment
 3             determination date that exceeds the adjusted  equity
 4             of  the  licensee  multiplied by 20, as shown on the
 5             final financial statement for  the  licensee's  last
 6             completed  fiscal  year  provided  to the Department
 7             under Section 5-20.
 8             The minimum total amount for the  grain  dealer's  a
 9        subsequent  assessment  shall  be  $250 $500 per 12-month
10        period year and the maximum amount shall be $7,500 $5,000
11        per 12-month period year.   For  the  purposes  of  grain
12        dealer  assessments under this item (1) of subsection (d)
13        of this Section, the total value of grain purchases shall
14        be the total value  of  first  time  grain  purchases  by
15        Illinois locations from producers.
16             (2)  Subject  to  paragraph  (4)  of this subsection
17        (d), if on the first working day of  a  calendar  quarter
18        when  a  licensee  is  not subject to an assessment under
19        this subsection (d) (the assessment determination  date),
20        if  the  equity in the Fund is less than $6,000,000 below
21        $3,000,000  on  September  1st   of   any   year,   every
22        warehouseman  who  has,  or was required to have, already
23        paid  the  newly  licensed  first,  second,   and   third
24        assessments  shall  be assessed a warehouseman subsequent
25        assessment by the Department in a total an  amount  equal
26        to:
27                  (A)  $0.000425 multiplied by the total licensed
28             storage capacity of the warehouseman as of the first
29             day  of  September  that  immediately  precedes  the
30             assessment determination date 1st of that year; and
31                  (B)  $0.000495  multiplied  by  that portion of
32             the licensed storage capacity of the warehouseman as
33             of the  first  day  of  September  that  immediately
34             precedes  the  assessment  determination date 1st of
 
HB1458 Enrolled            -33-      LRB093 03693 RCE 07393 b
 1             that year that exceeds the adjusted  equity  of  the
 2             licensee  multiplied  by  5,  as  shown on the final
 3             financial  statement   for   the   licensee's   last
 4             completed  fiscal  year  provided  to the Department
 5             under Section 5-20.
 6             The  minimum  total  amount   for   a   warehouseman
 7        subsequent  assessment  shall  be  $250 $500 per 12-month
 8        period year and the maximum amount shall be $7,500 $5,000
 9        per 12-month period year.
10             (3)  Subject to paragraph  (4)  of  this  subsection
11        (d), if the equity in the Fund is below $6,000,000 on the
12        first  working  day of a calendar quarter when a licensee
13        is not  already  subject  to  an  assessment  under  this
14        subsection (d) (the assessment determination date), every
15        incidental grain dealer who has, or was required to have,
16        already  paid  all  3  installments of the newly licensed
17        assessments shall be assessed  by  the  Department  in  a
18        total  amount  equal  to  $100.  It  shall be paid to the
19        Department within 60 days after the date  posted  on  the
20        written  notification  by  the Department, which shall be
21        sent  after  the  first  day  of  the  calendar   quarter
22        immediately following the assessment determination date.
23             (4)  Following  the  payment  of the final quarterly
24        installment by grain dealers and warehousemen,  the  next
25        assessment  determination  date can be no sooner than the
26        first working  day  of  the  sixth  full  calendar  month
27        following the payment.
28             (5)  All assessments under paragraphs (1) and (2) of
29        this  subsection  (d)  shall be effective as of the first
30        day of the calendar  quarter  immediately  following  the
31        assessment  determination  date  and shall be paid to the
32        Department by licensees in 4 equal  installments  by  the
33        twentieth   day  of  each  consecutive  calendar  quarter
34        following notice by the Department of the assessment. The
 
HB1458 Enrolled            -34-      LRB093 03693 RCE 07393 b
 1        Department shall give written notice to all licensees  of
 2        when  the  assessment  is  effective, and the rate of the
 3        assessment, by mail within 20 days after  the  assessment
 4        determination date.
 5             (6)  After an assessment under paragraph (1) and (2)
 6        of  this  subsection (d) is instituted, the amount of any
 7        unpaid installments  for  the  assessment  shall  not  be
 8        adjusted   based   upon   any  change  in  the  financial
 9        statements or licensed storage capacity of a licensee.
10             (7)  If the due date for the payment by  a  licensee
11        of  the third assessment under subsections (b) and (c) of
12        this Section 5-30 is after the  assessment  determination
13        date,  that licensee shall not be subject to any of the 4
14        installments of an assessment under  paragraphs  (1)  and
15        (2) of this subsection (d).
16             (8)  The  Department  shall  immediately deposit all
17        paid assessments into the Fund. If the due date  for  the
18        payment  by  a  licensee of the third assessment is after
19        September 1st in a year when the equity in  the  Fund  is
20        below $3,000,000, that licensee shall not be subject to a
21        subsequent assessment for that year.
22        (e)  Newly licensed; exemptions.
23             (1)  For  the purpose of assessing fees for the Fund
24        under subsection (a) of this Section, and subject to  the
25        provisions of item (e)(2) of this Section, the Department
26        shall consider the following to be newly licensed:
27                  (A)  A  person  that becomes a licensee for the
28             first time after the effective date of this Code.
29                  (B)  A licensee who has a lapse in licensing of
30             more  than  30  days.   A  license  shall   not   be
31             considered  to  be  lapsed  after  its revocation or
32             termination if an administrative or judicial  action
33             is  pending or if an order from an administrative or
34             judicial body continues an existing license.
 
HB1458 Enrolled            -35-      LRB093 03693 RCE 07393 b
 1                  (C)  A  grain  dealer   that   is   a   general
 2             partnership   in   which   there   is  a  change  in
 3             partnership interests and  that  change  is  greater
 4             than 50% during the partnership's fiscal year.
 5                  (D)  A   grain   dealer   that   is  a  limited
 6             partnership in  which  there  is  a  change  in  the
 7             controlling  interest  of a general partner and that
 8             change is greater than 50% of the total  controlling
 9             interest  during  the  limited  partnership's fiscal
10             year.
11                  (E)  A grain dealer that is a limited liability
12             company in which there is  a  change  in  membership
13             interests and that change is greater than 50% during
14             the limited liability company's fiscal year.
15                  (F)  A  grain  dealer  that  is the result of a
16             statutory consolidation if that person has  adjusted
17             equity  of  less  than  90% of the combined adjusted
18             equity of the predecessor persons who  consolidated.
19             For  the  purposes  of  this paragraph, the adjusted
20             equity of the resulting person shall  be  determined
21             from  the  approved or certified financial statement
22             submitted to the Department  for  the  first  fiscal
23             year  of  the  resulting person.  For the purpose of
24             this paragraph, the combined adjusted equity of  the
25             predecessor persons shall be determined by combining
26             the  adjusted  equity  of each predecessor person as
27             set forth in the most recent approved  or  certified
28             financial   statement  of  each  predecessor  person
29             submitted to the Department.
30                  (G)  A grain dealer that is  the  result  of  a
31             statutory  merger if that person has adjusted equity
32             of less than 90% of the combined adjusted equity  of
33             the   predecessor   persons  who  merged.   For  the
34             purposes of this paragraph, the adjusted  equity  of
 
HB1458 Enrolled            -36-      LRB093 03693 RCE 07393 b
 1             the  resulting  person  shall be determined from the
 2             approved or certified financial statement  submitted
 3             to  the  Department for the first fiscal year of the
 4             resulting person ending after the merger.   For  the
 5             purposes  of  this  paragraph, the combined adjusted
 6             equity  of  the   predecessor   persons   shall   be
 7             determined  by combining the adjusted equity of each
 8             predecessor person as set forth in the  most  recent
 9             approved  or certified financial statement submitted
10             to the Department for the last fiscal year  of  each
11             predecessor  person  ending on the date of or before
12             the merger.
13                  (H)  A  grain  dealer   that   is   a   general
14             partnership   in   which   there   is  a  change  in
15             partnership interests and that change is 50% or less
16             during the partnership's fiscal year if the adjusted
17             equity of the partnership after the change  is  less
18             than  90%  of the adjusted equity of the partnership
19             before  the  change.   For  the  purpose   of   this
20             paragraph,  the  adjusted  equity of the partnership
21             after  the  change  shall  be  determined  from  the
22             approved or certified financial statement  submitted
23             to  the  Department for the first fiscal year ending
24             after  the  change.   For  the  purposes   of   this
25             paragraph,  the  adjusted  equity of the partnership
26             before the  change  shall  be  determined  from  the
27             approved  or certified financial statement submitted
28             to the Department for the last fiscal  year  of  the
29             partnership  ending  on  the  date  of or before the
30             change.
31                  (I)  A  grain  dealer   that   is   a   limited
32             partnership  in  which  there  is  a  change  in the
33             controlling interest of a general partner  and  that
34             change  is  50%  or  less  of  the total controlling
 
HB1458 Enrolled            -37-      LRB093 03693 RCE 07393 b
 1             interest during the partnership's fiscal year if the
 2             adjusted equity of the partnership after the  change
 3             is  less  than  90%  of  the  adjusted equity of the
 4             partnership before the change.  For the purposes  of
 5             this   paragraph,   the   adjusted   equity  of  the
 6             partnership after the  change  shall  be  determined
 7             from  the  approved or certified financial statement
 8             submitted to the Department  for  the  first  fiscal
 9             year  ending  after the change.  For the purposes of
10             this  paragraph,  the   adjusted   equity   of   the
11             partnership  before  the  change shall be determined
12             from the approved or certified  financial  statement
13             submitted to the Department for the last fiscal year
14             of  the  partnership ending on the date of or before
15             the change.
16                  (J)  A grain dealer that is a limited liability
17             company in which there is  a  change  in  membership
18             interests  and  that  change  is  50% or less of the
19             total  membership  interests  during   the   limited
20             liability  company's  fiscal  year  if  the adjusted
21             equity of the limited liability  company  after  the
22             change  is  less  than 90% of the adjusted equity of
23             the limited liability  company  before  the  change.
24             For  the  purposes  of  this paragraph, the adjusted
25             equity of the limited liability  company  after  the
26             change  shall  be  determined  from  the approved or
27             certified  financial  statement  submitted  to   the
28             Department  for  the  first fiscal year ending after
29             the change.  For the purposes of this paragraph, the
30             adjusted equity of  the  limited  liability  company
31             before  the  change  shall  be  determined  from the
32             approved or certified financial statement  submitted
33             to  the  Department  for the last fiscal year of the
34             limited liability company ending on the date  of  or
 
HB1458 Enrolled            -38-      LRB093 03693 RCE 07393 b
 1             before the change.
 2                  (K)  A  grain  dealer  that  is the result of a
 3             statutory consolidation or merger if one or more  of
 4             the predecessor  persons that consolidated or merged
 5             into  the resulting  grain dealer was not a licensee
 6             under this Code at the time of the consolidation  or
 7             merger.
 8             (2)  For  the purpose of assessing fees for the Fund
 9        as set forth in  subsection  (a)  of  this  Section,  the
10        Department  shall  consider  the  following  as not being
11        newly  licensed  and,  therefore,  exempt  from   further
12        assessment unless an assessment is required by subsection
13        (d) of this Section:
14                  (A)  A  person  resulting  solely  from  a name
15             change of a licensee.
16                  (B)  A warehouseman changing  from  a  Class  I
17             warehouseman  to  a  Class II warehouseman or from a
18             Class II warehouseman  to  a  Class  I  warehouseman
19             under this Code.
20                  (C)  A  licensee  that  becomes  a wholly owned
21             subsidiary of another licensee.
22                  (D)  Subject to item (e)(1)(K) of this Section,
23             a  person  that  is  the  result  of   a   statutory
24             consolidation  if  that  person  has adjusted equity
25             greater  than  or  equal  to  90%  of  the  combined
26             adjusted  equity  of  the  predecessor  persons  who
27             consolidated.  For the purposes of  this  paragraph,
28             the adjusted equity of the resulting person shall be
29             determined  from the approved or certified financial
30             statement submitted to the Department for the  first
31             fiscal year of the resulting person. For the purpose
32             of  this  paragraph, the combined adjusted equity of
33             the  predecessor  persons  shall  be  determined  by
34             combining the adjusted  equity  net  worth  of  each
 
HB1458 Enrolled            -39-      LRB093 03693 RCE 07393 b
 1             predecessor  person as set forth in the  most recent
 2             approved or certified financial  statement  of  each
 3             predecessor person submitted to the Department.
 4                  (E)  Subject to item (e)(1)(K) of this Section,
 5             a person that is the result of a statutory merger if
 6             that  person  has  adjusted  equity  greater than or
 7             equal to 90% of the combined adjusted equity of  the
 8             predecessor persons who merged.  For the purposes of
 9             this paragraph, the adjusted equity of the resulting
10             person  shall  be  determined  from  the approved or
11             certified  financial  statement  submitted  to   the
12             Department   for   the  first  fiscal  year  of  the
13             resulting person ending after the merger.   For  the
14             purposes  of  this  paragraph, the combined adjusted
15             equity  of  the   predecessor   persons   shall   be
16             determined  by combining the adjusted equity of each
17             predecessor person as set forth in the  most  recent
18             approved or certified financial statement, submitted
19             to  the  Department for the last fiscal year of each
20             predecessor person ending on the date of  or  before
21             the merger.
22                  (F)  A  general partnership in which there is a
23             change in partnership interests and that  change  is
24             50% or less during the partnership's fiscal year and
25             the  adjusted  equity  of  the partnership after the
26             change is greater  than  or  equal  to  90%  of  the
27             adjusted   equity  of  the  partnership  before  the
28             change.  For the purposes  of  this  paragraph,  the
29             adjusted  equity of the partnership after the change
30             shall be determined from the approved  or  certified
31             financial  statement submitted to the Department for
32             the first fiscal year ending after the change.   For
33             the  purposes of this paragraph, the adjusted equity
34             of  the  partnership  before  the  change  shall  be
 
HB1458 Enrolled            -40-      LRB093 03693 RCE 07393 b
 1             determined from the approved or certified  financial
 2             statement  submitted  to the Department for the last
 3             fiscal year of the partnership ending on the date of
 4             or before the change.
 5                  (G)  A limited partnership in which there is  a
 6             change  in  the  controlling  interest  of a general
 7             partner and that change is 50% or less of the  total
 8             controlling interest during the partnership's fiscal
 9             year  and  the  adjusted  equity  of the partnership
10             after the change is greater than or equal to 90%  of
11             the  adjusted  equity  of the partnership before the
12             change.  For the purposes  of  this  paragraph,  the
13             adjusted  equity of the partnership after the change
14             shall be determined from the approved  or  certified
15             financial  statement submitted to the Department for
16             the first fiscal year ending after the change.   For
17             the  purposes of this paragraph, the adjusted equity
18             of  the  partnership  before  the  change  shall  be
19             determined from the approved or certified  financial
20             statement  submitted  to the Department for the last
21             fiscal year of the partnership ending on the date of
22             or before the change.
23                  (H)  A limited liability company in which there
24             is a change in membership interests and that  change
25             is  50%  or  less  of the total membership interests
26             during the limited liability company's  fiscal  year
27             if  the  adjusted  equity  of  the limited liability
28             company after the change is greater than or equal to
29             90% of the adjusted equity of the limited  liability
30             company before the change.  For the purposes of this
31             paragraph,   the  adjusted  equity  of  the  limited
32             liability  company  after  the   change   shall   be
33             determined  from the approved or certified financial
34             statement submitted to the Department for the  first
 
HB1458 Enrolled            -41-      LRB093 03693 RCE 07393 b
 1             fiscal  year  ending  after  the  change.   For  the
 2             purposes  of  this paragraph, the adjusted equity of
 3             the limited  liability  company  before  the  change
 4             shall  be  determined from the approved or certified
 5             financial statement submitted to the Department  for
 6             the  last  fiscal  year  of  the  limited  liability
 7             company  ending on the date of or before the change.
 8                  (I)  A licensed warehouseman that is the result
 9             of a statutory merger or consolidation to the extent
10             the  combined  storage  capacity  of  the  resulting
11             warehouseman  has  been  assessed  under  this  Code
12             before the statutory merger or consolidation, except
13             that  any  storage   capacity   of   the   resulting
14             warehouseman  that  has not previously been assessed
15             under this Code shall be  assessed  as  provided  in
16             items (c)(5), (c)(6), and (c)(7) of this Section.
17                  (J)  A federal warehouseman who participated in
18             the  Fund  under  Section 30-10 and who subsequently
19             received an  Illinois  license  to  the  extent  the
20             storage  capacity  of  the warehouseman was assessed
21             under this Code prior to Illinois licensing.
22        (f)  Grain  seller  initial   assessments   and   regular
23    assessments. Assessments under this subsection (f) apply only
24    to  the  first sale of grain to a grain dealer at an Illinois
25    location.
26             (1) The grain seller initial  assessment  period  is
27        that  period  of  time beginning on the effective date of
28        this amendatory Act of  the  93rd  General  Assembly  and
29        ending   on   the  first  assessment  determination  date
30        thereafter when the  equity  in  the  fund  is  at  least
31        $6,000,000.
32             (2)  Subject to paragraph (3) of this subsection (f)
33        (i)  if during the grain seller initial assessment period
34        the equity in the Fund is less than $3,000,000 or (ii) if
 
HB1458 Enrolled            -42-      LRB093 03693 RCE 07393 b
 1        at any time after the  grain  seller  initial  assessment
 2        period the equity in the Fund is less than $2,000,000, on
 3        the  first working day of a calendar quarter when a grain
 4        seller is not already subject to an assessment under this
 5        subsection (f) (the assessment determination date),  each
 6        person  who  settles for grain (sold to a grain dealer at
 7        an  Illinois  location)  during   the   12-month   period
 8        commencing  on  the  first day of the succeeding calendar
 9        quarter (the assessment period) shall pay  an  assessment
10        equal  to  $0.0004  multiplied by the net market value of
11        grain settled for (payment received for grain sold).
12             (3)  The next assessment determination date  can  be
13        no  sooner  than the first working day of the fourth full
14        calendar  month  following  the  end  of  the  assessment
15        period.
16             (4)  "Net market value" of  grain  means  the  gross
17        sales  price of that grain adjusted by application of the
18        grain dealer's discount schedule in effect at the time of
19        sale and  after  deduction  of  any  statutory  commodity
20        check-offs. Other charges such as storage charges, drying
21        charges,  and  transportation costs shall not be deducted
22        in arriving at the net market value of grain  sold  to  a
23        grain  dealer.  The  net  market  value of grain shall be
24        determined from the settlement sheet or other  applicable
25        written  evidence  of  the  sale  of  grain  to the grain
26        dealer.
27             (5)  All assessments under this subsection (f) shall
28        commence  on  the  first  day  of  the  calendar  quarter
29        immediately following the assessment  determination  date
30        and  shall  continue  for  a  period  of  12  consecutive
31        calendar  months.  The  assessments shall be collected by
32        licensees at the time of settlement during the assessment
33        period,  and  shall  be  remitted  by  licensees  to  the
34        Department by the twentieth day of each calendar quarter,
 
HB1458 Enrolled            -43-      LRB093 03693 RCE 07393 b
 1        commencing with the second calendar quarter following the
 2        assessment determination date. The Department shall  give
 3        written  notice  to  all  licensees of when an assessment
 4        under this subsection (f) is to begin and  end,  and  the
 5        appropriate  level  of  the assessment, by mail within 20
 6        days after the assessment determination date.
 7             (6)  Assessments under  this  subsection  (f)  apply
 8        only  to  grain  for  which settlement is made during the
 9        assessment period, without regard to the date  the  grain
10        was sold to the licensee.
11             (7)  The  collection  and  remittance of assessments
12        from first sellers of grain under this subsection (f)  is
13        the  sole  responsibility  of  the  licensees to whom the
14        grain is sold. Sellers of grain shall not be penalized by
15        reason of any licensee's  failure  to  comply  with  this
16        subsection  (f).  Failure  of  a  licensee to collect any
17        assessment shall not relieve the grain seller from paying
18        the assessment, and the grain seller shall promptly remit
19        the uncollected assessments upon demand by the  licensee,
20        which  may  be  accounted  for  in  settlement  of  grain
21        subsequently  sold to that licensee. Licensees who do not
22        collect assessments as required by this  subsection  (f),
23        or  who  do not remit those assessments to the Department
24        within the time deadlines  required  by  this  subsection
25        (f),  shall  remit  the  amount  of  the assessments that
26        should have  been  remitted  to  the  Department  and  in
27        addition  shall  be  subject  to a monetary penalty in an
28        amount not to exceed $1,000.
29             (8)  Notwithstanding the other  provisions  of  this
30        subsection  (f),  no  assessment  shall be levied against
31        grain sold by the Department as a result of a failure.
32        (g) Lender assessments.
33             (1) Subject to the  provisions  of  this  subsection
34        (g),  if  on  the first working day of a calendar quarter
 
HB1458 Enrolled            -44-      LRB093 03693 RCE 07393 b
 1        when a person is not already  subject  to  an  assessment
 2        under  this subsection (g) the equity in the Fund is less
 3        than $6,000,000, each person holding  warehouse  receipts
 4        issued from an Illinois location on grain owned or stored
 5        by  a licensee to secure a loan to that licensee shall be
 6        assessed a quarterly lender  assessment  for  each  of  4
 7        consecutive calendar quarters beginning with the calendar
 8        quarter  next  succeeding  the  assessment  determination
 9        date.
10             (2) Each quarterly lender assessment shall be at the
11        rate  of  $0.00000055  per  bushel  per  day  for bushels
12        covered by a warehouse receipt held as security  for  the
13        loan  during  that  calendar quarter times the applicable
14        commodity price times the lender  assessment  multiplier,
15        if  any,  determined by the Department in accordance with
16        paragraph (3) of this subsection  (g).  With  respect  to
17        each  calendar  quarter within the assessment period, the
18        "applicable commodity price" shall be the  closing  price
19        paid  by  the  licensee  on  the last working day of that
20        calendar quarter for the base  commodity  for  which  the
21        warehouse receipt was issued.
22             (3)  With  respect  to  the second assessment period
23        beginning after  June  30,  2003,  the  Department  shall
24        determine  and apply a lender assessment multiplier equal
25        to 250,000 divided by  the  aggregate  dollar  amount  of
26        lender  assessments  imposed  under  this  subsection (g)
27        under the first assessment period  beginning  after  June
28        30,  2003.  With  respect  to the third assessment period
29        beginning after  June  30,  2003,  the  Department  shall
30        determine  and apply a lender assessment multiplier equal
31        to 250,000 divided by the  average  of  aggregate  dollar
32        amounts   of   lender   assessments  imposed  under  this
33        subsection (g)  under  the  first  2  assessment  periods
34        beginning after June 30, 2003. With respect to assessment
 
HB1458 Enrolled            -45-      LRB093 03693 RCE 07393 b
 1        periods  thereafter,  the  Department shall determine and
 2        apply a lender assessment  multiplier  equal  to  250,000
 3        divided  by  the  average  of the 3 most recent aggregate
 4        dollar amounts of lender assessments imposed  under  this
 5        subsection (g).
 6             (4) The next assessment determination date can be no
 7        sooner  than  the  first  working  day of the fourth full
 8        calendar  month  following  the  end  of  the  assessment
 9        period.
10             (5) The Department shall give written notice by mail
11        within 20 days after the assessment determination date to
12        all licensees of when assessments under  this  subsection
13        (g)  are  to  begin  and  end,  the  rate  of  the lender
14        assessment, and the lender assessment multiplier, if any,
15        that shall apply.
16             (6) It is the responsibility of a licensee to inform
17        each of its lenders and other persons by virtue of  whose
18        relationship  with  the licensee this subsection (g) will
19        apply as to the onset of an  assessment  for  which  that
20        person   might   be  liable  and  the  applicable  lender
21        assessment multiplier, if any. The notification  must  be
22        in writing and, as to persons subject to assessment under
23        this subsection (g) on the assessment determination date,
24        must  be  sent  no  later than 20 days after the licensee
25        receives notice of an assessment from the Department.  As
26        to   persons   not   subject  to  assessment  under  this
27        subsection (g) as of the assessment  determination  date,
28        the  notice  shall  be  sent  or  given no later than the
29        closing of any transaction subsequent to  the  assessment
30        determination  date  involving the licensee and by virtue
31        of which  transaction  the  person  is  made  subject  to
32        assessment under this subsection (g).
33             (7)  Within  20  days after the end of each calendar
34        quarter within the assessment period, each licensee shall
 
HB1458 Enrolled            -46-      LRB093 03693 RCE 07393 b
 1        send to each lender with which  it  has  been  associated
 2        during  that  calendar  quarter  and  to the Department a
 3        written notice of quarterly assessment together with  the
 4        information   needed  to  determine  the  amount  of  the
 5        quarterly assessment owing with  respect  to  loans  from
 6        that lender. This information shall include the number of
 7        bushels  covered  by each warehouse receipt, organized by
 8        commodity, held as security for the loan  owing  to  that
 9        lender,  the  number  of  days  each  of  those warehouse
10        receipts was outstanding during  that  calendar  quarter,
11        the  applicable  commodity  price,  the applicable lender
12        assessment  multiplier,  the  amount  of  the   resulting
13        quarterly  lender  assessment,  and  the  due date of the
14        quarterly assessment.
15             (8) Each quarterly assessment shall be due and  paid
16        by the lender or its designee to the Department within 20
17        days  after  the end of the calendar quarter to which the
18        assessment pertains.
19             (9) Lenders shall not be penalized by reason of  any
20        licensee's  failure  to  comply with this subsection (g).
21        Failure of a licensee to comply with this subsection  (g)
22        shall  not relieve the lender from paying the assessment,
23        and the  lender  shall  promptly  remit  the  uncollected
24        assessments  by  the  due date as set forth in the notice
25        from the licensee.
26             (10) This subsection (g) applies to any  person  who
27        holds a grain warehouse receipt issued by a licensee from
28        an   Illinois   location  pursuant  to  any  transaction,
29        regardless of its form, that creates a security  interest
30        in the grain including, without limitation, the advancing
31        of  money  or  other  value  to  or  for the benefit of a
32        licensee upon the licensee's issuance or negotiation of a
33        grain warehouse receipt and pursuant to or in  connection
34        with   an   agreement   between   the   licensee   and  a
 
HB1458 Enrolled            -47-      LRB093 03693 RCE 07393 b
 1        counter-party for the repurchase  of  the  grain  by  the
 2        licensee  or  designee  of  the licensee. For purposes of
 3        this  subsection  (g),  any  such  transaction  shall  be
 4        treated as one in which grain is held as security  for  a
 5        loan outstanding to a licensee within the meaning of this
 6        subsection  (g),  and such a person shall be treated as a
 7        lender.
 8             (11)  The Department shall immediately  deposit  all
 9        paid assessments under this subsection (g) into the Fund.
10        (h)  Equity in the Fund shall exclude moneys owing to the
11    State or the Reserve Fund as a result  of  transfers  to  the
12    Fund  from the General Revenue Fund or the Reserve Fund under
13    subsection  (h)  of  Section   25-20.   Notwithstanding   the
14    foregoing,  for  purposes  of  calculating equity in the Fund
15    during  the  grain  seller  initial  assessment  period   and
16    assessing  grain sellers, it shall be presumed that the State
17    is owed, prior to repayment, only $2,000,000 and the  Reserve
18    Fund   contains   a   balance   of   $2,000,000.    Under  no
19    circumstances,  however,  shall  there   be   more   than   2
20    consecutive  grain  seller  assessments  during  the  initial
21    assessment period, unless there is a failure that reduces the
22    equity  in the Fund to below $3,000,000. Except for the first
23    assessment made under this  Section,  and  assessments  under
24    items  (c)(5),  (c)(6),  and  (c)(7)  of  this  Section,  all
25    assessments  shall  be  paid to the Department within 60 days
26    after the date posted on the written  notice  of  assessment.
27    The  Department  shall  forward  all  paid assessments to the
28    Fund.
29    (Source: P.A. 91-213, eff. 7-20-99.)

30        (240 ILCS 40/10-5)
31        Sec. 10-5.  Duties and requirements of licensees.
32        (a)  Each licensee shall have adequate property insurance
33    covering grain in its  possession  or  custody  and  adequate
 
HB1458 Enrolled            -48-      LRB093 03693 RCE 07393 b
 1    liability, property, theft, hazard, and workers' compensation
 2    insurance.
 3             (1)  Every   insurance   policy   shall   contain  a
 4        provision that it will not be cancelled by the  principal
 5        or  the insurance company except on 60 days prior written
 6        notice  to  the  Director  and  the  principal   insured.
 7        Cancellation  of the policy does not affect the liability
 8        accrued or that may accrue under the  policy  before  the
 9        expiration  of the 60 days.  The notice shall contain the
10        termination date.
11             (2)  Each licensee shall keep  a  general  insurance
12        account  showing  the  policy  number,  issuing  company,
13        amount,  binding  date,  and expiration date of insurance
14        coverage and the property covered by insurance.
15             (3)  In reference to a warehouseman, notwithstanding
16        any provision to the contrary contained in the  warehouse
17        receipts  involved,  a  warehouseman  is not obligated to
18        provide   property   insurance   on   Commodity    Credit
19        Corporation  grain ("CCC-owned grain"). The warehouseman,
20        however, shall continue to carry the  insurance  required
21        on loan grain that becomes CCC-owned grain until the date
22        stated  in  a  written  notice  from  CCC  or  its  agent
23        instructing  the  warehouseman to cancel the insurance on
24        the grain as of that date.  If  CCC-owned  grain  is  not
25        covered  by property insurance, recovery by the Commodity
26        Credit Corporation from the Fund shall be reduced by  the
27        amount  of  property  insurance  proceeds that would have
28        been available to cover any loss to CCC-owned  grain  had
29        the CCC-owned grain been covered by property insurance.
30        (b)  A  licensee  shall immediately notify the Department
31    when  there  is  a  change  of  management  or  cessation  of
32    operations or change in fiscal year end.
33        (c)  All grain trades, grain merchandising  transactions,
34    grain  origination  plans  and  programs, and transactions or
 
HB1458 Enrolled            -49-      LRB093 03693 RCE 07393 b
 1    arrangements that represent or reflect rights and obligations
 2    in grain must be clearly  identified  and  disclosed  in  the
 3    books  and records of the licensee, for audit and examination
 4    purposes.
 5    (Source: P.A. 89-287, eff. 1-1-96.)

 6        (240 ILCS 40/10-10)
 7        Sec. 10-10.  Duties and requirements of grain dealers.
 8        (a)  Long and short market position.
 9             (1)  Grain dealers shall at all  times  maintain  an
10        accurate  and  current  long  and  short  market position
11        record for each grain  commodity.   The  position  record
12        shall  at a minimum contain the net position of all grain
13        owned, wherever located, grain purchased  and  sold,  and
14        any grain option contract purchased or sold.
15             (2)  Grain  dealers,  except grain dealers regularly
16        and  continuously  reporting  to  the  Commodity  Futures
17        Trading Commission or grain dealers who have obtained the
18        permission of the Department to have different open  long
19        or  short market positions, may maintain an open position
20        in the grain commodity of which the grain dealer buys the
21        greatest number of bushels per fiscal year not to  exceed
22        one bushel for each $10 of adjusted equity at fiscal year
23        end  up  to a maximum open position of 50,000 bushels and
24        one-half that number of bushels up to 25,000 bushels  for
25        all other grain commodities that the grain dealer buys. A
26        grain  dealer,  however, may maintain an open position of
27        up to  5,000 bushels for each grain commodity  the  grain
28        dealer buys.
29        (b)  The  license  issued  by  the  Department to a grain
30    dealer shall  be  posted  in  the  principal  office  of  the
31    licensee  in  this  State.   A certificate shall be posted in
32    each location where the licensee engages  in  business  as  a
33    grain dealer.  In the case of a licensee operating a truck or
 
HB1458 Enrolled            -50-      LRB093 03693 RCE 07393 b
 1    tractor trailer unit for the purpose of purchasing grain, the
 2    licensee  shall  have  a certificate carried in each truck or
 3    tractor trailer unit used in connection with  the  licensee's
 4    grain dealer business.
 5        (c)  The  licensee  must  have  at  all  times sufficient
 6    financial resources to pay  producers  on  demand  for  grain
 7    purchased from them.
 8        (d)  A  licensee that is solely a grain dealer shall on a
 9    daily basis maintain an  accurate  and  current  daily  grain
10    transaction report.
11        (e)  A  licensee  that  is  both  a  grain  dealer  and a
12    warehouseman shall at all  times  maintain  an  accurate  and
13    current daily position record.
14        (f)  In  the  case  of  a  change of ownership of a grain
15    dealer, the obligations of a grain dealer do not cease  until
16    the  grain  dealer  has  surrendered  all  unused price later
17    contracts to the Department and the successor has executed  a
18    successor's  agreement  that is acceptable to the Department,
19    or  the  successor  has  otherwise  provided  for  the  grain
20    obligations of its predecessor in a manner that is acceptable
21    to the Department.
22        (g)  If a grain dealer proposes to cease  doing  business
23    as  a  grain dealer and there is no successor, it is the duty
24    of the grain dealer  to  surrender  all  unused  price  later
25    contracts  to  the  Department,  together  with  an affidavit
26    accounting for all grain dealer obligations setting forth the
27    arrangements made with producers for final disposition of the
28    grain dealer obligations and  indicating  the  procedure  for
29    payment  in full of all outstanding grain obligations.  It is
30    the duty of the Department to give notice by publication that
31    a grain dealer has ceased doing business without a successor.
32    After payment in full of all outstanding  grain  obligations,
33    it is the duty of the grain dealer to surrender its license.
34    (Source: P.A. 91-213, eff. 7-20-99.)
 
HB1458 Enrolled            -51-      LRB093 03693 RCE 07393 b
 1        (240 ILCS 40/10-15)
 2        Sec. 10-15.  Price later contracts.
 3        (a)  Price  later  contracts  shall  be  written on forms
 4    prescribed or authorized  by  the  Department.   Price  later
 5    contract  forms  shall  be  printed by a person authorized to
 6    print those contracts by the Department after that person has
 7    agreed to comply with each of the following:
 8             (1)  That all price later contracts shall be printed
 9        as  prescribed by the Department  and  shall  be  printed
10        only for a licensed grain dealer.
11             (2)  That   all   price  later  contracts  shall  be
12        numbered consecutively and a  complete  record  of  these
13        contracts  shall be retained showing for whom printed and
14        the consecutive numbers printed on the contracts.
15             (3)  That a duplicate copy of all invoices  rendered
16        for  printing  price  later  contracts that will show the
17        consecutive numbers printed on  the  contracts,  and  the
18        number  of contracts printed, shall be promptly forwarded
19        to the Department.
20             (4)  that  the  person  shall  register   with   the
21        Department  and pay an annual registration fee of $100 to
22        print price later contracts.
23        (b)  A grain  dealer  purchasing  grain  by  price  later
24    contract  shall  at  all  times  own  grain, rights in grain,
25    proceeds from the sale of grain, and other assets  acceptable
26    to  the  Department as set forth in this Code totaling 90% of
27    the unpaid balance of  the  grain  dealer's  obligations  for
28    grain  purchased  by price later contract.  That amount shall
29    at all times remain unencumbered and shall be represented  by
30    the aggregate of the following:
31             (1)  Grain owned by the grain dealer valued by means
32        of  the  hedging  procedures method that includes marking
33        open contracts to market.
34             (2)  Cash on hand.
 
HB1458 Enrolled            -52-      LRB093 03693 RCE 07393 b
 1             (3)  Cash held on  account  in  federally  or  State
 2        licensed financial institutions.
 3             (4)  Investments   held   in   time   accounts  with
 4        federally or State licensed financial institutions.
 5             (5)  Direct obligations of the U.S. government.
 6             (6)  Funds on deposit in grain margin accounts.
 7             (7)  Balances due or to become due to  the  licensee
 8        on price later contracts.
 9             (8)  Marketable securities, including mutual funds.
10             (9)  Irrevocable  letters  of credit in favor of the
11        Department and acceptable to the Department.
12             (10)  Price later contract service charges due or to
13        become due to the licensee.
14             (11)  Other evidence of proceeds from  or  of  grain
15        that is acceptable to the Department.
16        (c)  For  the  purpose  of  computing the dollar value of
17    grain  and  the  balance  due   on   price   later   contract
18    obligations,  the  value  of  grain  shall  be figured at the
19    current market price.
20        (d)  Title to grain sold by price  later  contract  shall
21    transfer  to  a  grain  dealer  at  the  time  on the date of
22    delivery of the grain.  Therefore, no storage  charges  shall
23    be  made  with  respect  to  grain  purchased  by price later
24    contract.   A  service  charge  for  handling  the  contract,
25    however, may be made.
26        (e)  Subject to subsection (f)  of  this  Section,  if  a
27    price  later  contract is not signed by all parties within 30
28    days of the last date of delivery of  grain  intended  to  be
29    sold  by  price later contract, then the grain intended to be
30    sold by price later contract shall  be  priced  on  the  next
31    business  day after 30 days from the last date of delivery of
32    grain intended to be sold by  price  later  contract  at  the
33    market  price  of the grain at the close of the next business
34    day after the 29th day. When the grain is priced  under  this
 
HB1458 Enrolled            -53-      LRB093 03693 RCE 07393 b
 1    subsection,  the grain dealer shall send notice to the seller
 2    of the grain within 10 days. The  notice  shall  contain  the
 3    number  of bushels sold, the price per bushel, all applicable
 4    discounts, the net proceeds, and a notice  that  states  that
 5    the  Grain  Insurance  Fund  shall  provide  protection for a
 6    period of only 160 days from  the  date  of  pricing  of  the
 7    grain.
 8        In  the  event of a failure, if a price later contract is
 9    not signed  by  all  the  parties  to  the  transaction,  the
10    Department  may  consider the grain to be sold by price later
11    contract if a preponderance of  the  evidence  indicates  the
12    grain was to be sold by price later contract.
13        (f)  If  grain  is  in storage with a warehouseman and is
14    intended to be sold by price later contract, that grain shall
15    be considered as remaining in storage and not be deemed  sold
16    by  price  later  contract  until  the  date  the price later
17    contract is signed by all parties.
18        (g)  Scale  tickets  or  other  approved  documents  with
19    respect to grain purchased by a grain dealer by  price  later
20    contract  shall  contain  the  following:  "Sold Grain; Price
21    Later".
22        (h)  Price later contracts shall be issued  consecutively
23    and recorded by the grain dealer as established by rule.
24        (i)  A licensee grain dealer shall not issue a collateral
25    warehouse  receipt  on  grain  purchased  by  a  price  later
26    contract  to  the extent the purchase price has not been paid
27    by the licensee grain dealer.
28        (j)  Failure to comply  with  the  requirements  of  this
29    Section may result in suspension of the privilege to purchase
30    grain by price later contract for up to one year.
31        (k)  When  a producer with a price later contract selects
32    a price for all or any part of the grain represented by  that
33    contract,  then  within  5  business  days  after  that price
34    selection,  the  licensee  shall  mail  to  that  producer  a
 
HB1458 Enrolled            -54-      LRB093 03693 RCE 07393 b
 1    confirmation of the price selection, clearly  and  succinctly
 2    indicating the price selected.
 3    (Source: P.A. 91-213, eff. 7-20-99.)

 4        (240 ILCS 40/10-20)
 5        Sec. 10-20.  Duties and requirements of warehouseman.
 6        (a)  It  is the duty of every warehouseman to receive for
 7    storage any grain that may be tendered to it in the  ordinary
 8    course of business so far as the licensed storage capacity of
 9    the  warehouse  permits  and  if  the  grain  is  of  a  kind
10    customarily  stored  by  the  warehouseman and is in suitable
11    condition for storage.
12             (1)  If the condition of grain offered  for  storage
13        might  adversely  affect  the  condition  of grain in the
14        warehouse, a warehouseman need not receive the grain  for
15        storage,  but  if  a warehouseman does receive the grain,
16        then it must be stored in a manner that  will  not  lower
17        the grade of other grain in the warehouse.
18             (2)  A    warehouseman   shall   provide   competent
19        personnel and equipment to weigh and grade all  grain  in
20        and out of storage.
21             (3)  A  warehouseman  shall  maintain  all  licensed
22        warehouse facilities in a manner suitable to preserve the
23        quality and quantity of grain stored.
24        (b)  For the purposes of the Department's examinations, a
25    warehouseman  shall  provide  and  maintain safe and adequate
26    means of ingress and egress to the  various  and  surrounding
27    areas  of  the  facilities, storage bins, and compartments of
28    the warehouse.
29        (c)  Except as provided in this item (c), a  warehouseman
30    shall  at  all  times  have a sufficient quantity of grain of
31    like  kind  and  quality  to  meet  its  outstanding  storage
32    obligations. For purposes of this  Section,  "like  kind  and
33    quality"  means  the  type  of commodity and a combination of
 
HB1458 Enrolled            -55-      LRB093 03693 RCE 07393 b
 1    grade, specialty traits, if any, and class  or  sub-class  as
 2    applicable.
 3        (d)  A  warehouseman  shall  not store grain in excess of
 4    the capacity for which it is licensed.
 5        (e)  A  warehouseman  may  redeposit   grain   from   its
 6    warehouse with another warehouseman or a federal warehouseman
 7    in an  additional quantity not to exceed the licensed storage
 8    capacity of its own warehouse.
 9             (1)  If  grain  is  redeposited  as provided in this
10        Section,  a  warehouseman  must  retain  the  receipt  it
11        obtains from the second  warehouseman  as  proof  of  the
12        redeposit   and   retain   sufficient  control  over  the
13        redeposited  grain  as  is  necessary  to   comply   with
14        directions    of   the   original   depositor   regarding
15        disposition of the redeposited grain.
16             (2)  While grain is en route from  the  redepositing
17        warehouseman  to  the second warehouseman, a redepositing
18        warehouseman must retain an original or a duplicate  bill
19        of  lading  instead  of and until such time as it obtains
20        possession  of  the  warehouse  receipt   as   proof   of
21        disposition of the redeposited grain.
22        (f)  Schedule of rates and licenses.
23             (1)  A warehouseman shall file its schedule of rates
24        with  the Department and shall post its warehouse license
25        and a copy of the schedule of  rates  on  file  with  the
26        Department in a conspicuous place in each location of the
27        warehouseman where grain is received.
28             (2)  The  schedule  of  rates  shall  be  on  a form
29        prescribed by the Department and shall include the  names
30        and  genuine signatures of all persons authorized to sign
31        warehouse receipts issued by the warehouseman.
32             (3)  To change the schedule of rates or the name  of
33        any  person  authorized  to  sign  warehouse  receipts, a
34        warehouseman must file  with  the  Department  a  revised
 
HB1458 Enrolled            -56-      LRB093 03693 RCE 07393 b
 1        schedule  of  rates  and,  thereafter,  post  the revised
 2        schedule of rates at each location  of  the  warehouseman
 3        where  grain  is received.  The revised schedule of rates
 4        shall be deemed filed with the Department on the  earlier
 5        of  the  date it is delivered to the Department or mailed
 6        to the Department by certified  mail  properly  addressed
 7        with  sufficient  postage attached.  The revised schedule
 8        of rates shall be effective on the date the  schedule  of
 9        rates   is  posted  after  delivery  or  mailing  to  the
10        Department in  accordance  with  this  Section.   Revised
11        schedules  of  rates  shall apply only to grain delivered
12        for storage after  the  effective  date  of  the  revised
13        schedule  of  rates.   No grain in storage at the time of
14        the effective date of a revised schedule of  rates  shall
15        be  subject to a revised schedule of rates until one year
16        after the date of delivery  of  grain,  unless  otherwise
17        provided by a written contract.
18             (4)  The  schedule  of  rates  may  provide  for the
19        negotiation of different rates for  large  deliveries  of
20        grain  if  those  rates are applied on a uniform basis to
21        all depositors under the same circumstances.
22        (g)  A warehouseman may refuse to  accept  grain  if  the
23    identity  of the grain is to be preserved.  If a warehouseman
24    accepts grain  and  the  identity  of  the  grain  is  to  be
25    preserved,  the  evidence  of storage shall state on its face
26    that the grain is stored with its identity preserved and  the
27    location of that grain.
28        (h)  A  warehouseman  shall  at  all  times  maintain  an
29    accurate and current daily position record on a daily basis.
30        (i)  In the case of a change of ownership of a warehouse,
31    the  obligations  of  a  warehouseman  do not cease until its
32    successor is properly licensed under this Code or the  United
33    States Warehouse Act, it has surrendered all unused warehouse
34    receipts  to  the  Department  and has executed a successor's
 
HB1458 Enrolled            -57-      LRB093 03693 RCE 07393 b
 1    agreement, or the successor has otherwise  provided  for  the
 2    obligations of its predecessor.
 3        (j)  If  a  warehouseman proposes to cease doing business
 4    as a warehouseman and there is no successor, it is  the  duty
 5    of   the  warehouseman  to  surrender  all  unused  warehouse
 6    receipts  to  the  Department,  together  with  an  affidavit
 7    accounting for  all  warehouse  receipts  setting  forth  the
 8    arrangements  made  with  depositors for final disposition of
 9    the grain in storage and indicating the procedure for payment
10    in full of all outstanding obligations. After payment in full
11    of all  outstanding  obligations,  it  is  the  duty  of  the
12    warehouseman to surrender its license.
13        (k)  Requests by a warehouseman for special examinations,
14    grain   inventory   computation,  or  verification  of  grain
15    quantity or quality shall be accompanied by a fee of $200.
16        (l)  Nothing in this Section  is  deemed  to  prohibit  a
17    warehouseman from entering into agreements with depositors of
18    grain relating to allocation or reservation of storage space.
19    (Source: P.A. 89-287, eff. 1-1-96.)

20        (240 ILCS 40/15-15)
21        Sec. 15-15.  Violations of open position limits.
22        (a)  Violations of maximum allowable open position limits
23    by  more  than  1,000 bushels but less than twice the maximum
24    allowable open position limits.
25             (1)  If a licensee violates  the  maximum  allowable
26        open  position limits of item (a)(2) of Section 10-10 and
27        the open position is more than  1,000  bushels  but  less
28        than  twice  the  maximum allowable open position limits,
29        the licensee shall be required to:
30                  (A)  Post collateral with the Department in  an
31             amount   equal  to  $1 per bushel for each bushel of
32             soybeans in excess of  the  maximum  allowable  open
33             position  limits  and  50  cents  per bushel of each
 
HB1458 Enrolled            -58-      LRB093 03693 RCE 07393 b
 1             bushel for all other grain in excess of the  maximum
 2             allowable  open position limits or $2,500, whichever
 3             is greater; and
 4                  (B)   Pay a penalty in an amount not to  exceed
 5             $250.
 6             (2)  If a licensee commits 2 violations as set forth
 7        in  item (a) (1) of Section 15-10 within a 2 year period,
 8        the licensee must:
 9                  (A)  post collateral with the Department in  an
10             amount  equal  to  $1  per bushel for each bushel of
11             soybeans in excess of  the  maximum  allowable  open
12             position  limits  and  50  cents  per bushel of each
13             bushel for all other grain in excess of the  maximum
14             allowable  open position limits or $5,000, whichever
15             is greater; and
16                  (B)  pay a penalty in the amount of $750 $500.
17             (3)  If a licensee commits 3 or more  violations  as
18        set forth in item (a)(1) of Section 15-10 within a 5 year
19        period, the licensee must:
20                  (A)  post  collateral with the Department in an
21             amount equal to $2 per bushel  for  each  bushel  of
22             soybeans  in  excess  of  the maximum allowable open
23             position limits and $1 per bushel of each bushel for
24             all other grain in excess of the  maximum  allowable
25             open   position  limits  or  $10,000,  whichever  is
26             greater; and
27                  (B)  pay a penalty in an  amount  greater  than
28             $2,000 $1,000 but less than $20,000 $10,000.
29        (b)  Violations of maximum allowable open position limits
30    that  equal  or  exceed  twice  the  maximum  allowable  open
31    position.
32             (1)  If  a  licensee  violates the maximum allowable
33        open position limits of item (a)(2) of Section 10-10  and
34        the  open  position  equals  or exceeds twice the maximum
 
HB1458 Enrolled            -59-      LRB093 03693 RCE 07393 b
 1        allowable open position limits, the licensee must:
 2                  (A)  post collateral with the Department in  an
 3             amount  equal  to  $1  per bushel for each bushel of
 4             soybeans in excess of  the  maximum  allowable  open
 5             position  and 50 cents per bushel for each bushel of
 6             all other grain in excess of the  maximum  allowable
 7             open   position   limits  or  $5,000,  whichever  is
 8             greater; and
 9                  (B)  pay a penalty in the amount of $500.00.
10             (2)  If a licensee commits 2 violations as set forth
11        in item (b)(1) of Section 15-10 within a 2  year  period,
12        the licensee must:
13                  (A)  post  collateral with the Department in an
14             amount equal to $2 per bushel  for  each  bushel  of
15             soybeans  in  excess  of  the maximum allowable open
16             position limits and $1 per bushel for each bushel of
17             all other grain in excess of the  maximum  allowable
18             open  position  limits  or    $10,000,  whichever is
19             greater; and
20                  (B)  pay a penalty in an  amount  greater  than
21             $750 $500 but less than $15,000 $10,000.
22             (3)  If  a  licensee commits 3 or more violations as
23        set forth in item (b)(1) of Section 15-5 within a 5  year
24        period, the licensee must:
25                  (A)  post  collateral with the Department in an
26             amount equal to $2 per bushel  for  each  bushel  of
27             soybeans  in  excess  of  the maximum allowable open
28             position limits and $1 per bushel  for  each  bushel
29             for  all  other  grain  in  excess  of  the  maximum
30             allowable open position limits or $10,000, whichever
31             is greater; and
32                  (B)  pay  a  penalty  in an amount greater than
33             $2,000 $1,000 but less than $20,000 $10,000.
34    (Source: P.A. 89-287, eff. 1-1-96.)
 
HB1458 Enrolled            -60-      LRB093 03693 RCE 07393 b
 1        (240 ILCS 40/15-20)
 2        Sec. 15-20.  Grain quantity and grain quality violations.
 3        (a)  Grain quantity deficiencies of more than $1,000  but
 4    less than $20,000.
 5             (1)  If  a  licensee  fails  to  have  a  sufficient
 6        quantity  of  grain  in store to meet outstanding storage
 7        obligations  and  the  value  of   the   grain   quantity
 8        deficiency  as  determined  by  the  formula set forth in
 9        subsection (c) of Section 15-20 is more than  $1,000  but
10        less than $20,000, the licensee must:
11                  (A)  post  collateral with the Department in an
12             amount equal to the  value  of  the  grain  quantity
13             deficiency or $2,500, whichever is greater; and
14                  (B)  pay a penalty of $250.
15             (2)  If a licensee commits 2 violations as set forth
16        in  item  (a)(1) of Section 15-20 within a 2 year period,
17        the licensee must:
18                  (A)  post collateral with the Department in  an
19             amount  equal  to  the  value  of the grain quantity
20             deficiency or $10,000, whichever is greater; and
21                  (B)  pay a penalty of $750 $500.
22             (3)  If a licensee commits 3 or more  violations  as
23        set forth in item (a)(1) of Section 15-20 within a 5 year
24        period, the licensee must:
25                  (A)  post  collateral with the Department in an
26             amount equal to the  value  of  the  grain  quantity
27             deficiency or $20,000, whichever is greater; and
28                  (B)  pay  a  penalty  of  no  less  than $2,000
29             $1,000 and no greater than $20,000 $10,000.
30        (b)  Grain quantity deficiencies of $20,000 or more.
31             (1)  If a licensee fails to have sufficient quantity
32        of grain in store to meet outstanding storage obligations
33        and  the  value  of  the  grain  quantity  deficiency  as
34        determined by the formula set forth in subsection (c)  of
 
HB1458 Enrolled            -61-      LRB093 03693 RCE 07393 b
 1        Section  15-20  equals  or  exceeds $20,000, the licensee
 2        must:
 3                  (A)  post collateral with the Department in  an
 4             amount  equal  to  twice  the  value  of  the  grain
 5             quantity deficiency; and
 6                  (B)  pay a penalty of $500.
 7             (2)  If a licensee commits 2 violations as set forth
 8        in  item  (b)(1) of Section 15-20 within a 2 year period,
 9        the licensee must:
10                  (A)  post collateral with the Department in  an
11             amount  equal  to  twice  the  value  of  the  grain
12             quantity   deficiency   or   $20,000,  whichever  is
13             greater; and
14                  (B)  pay a penalty of no less  than  $750  $500
15             and no greater than $15,000 $10,000.
16             (3)  If  a  licensee commits 3 or more violations as
17        set forth in item (b)(1) of Section 15-20 within a 5 year
18        period, the licensee must:
19                  (A)  post collateral with the Department in  an
20             amount  equal  to  twice  the  value  of  the  grain
21             quantity   deficiency   or   $40,000,  whichever  is
22             greater; and
23                  (B)  pay a  penalty  of  no  less  than  $2,000
24             $1,000 and no greater than $20,000 $10,000.
25        (c)  To   determine  the  value  of  the  grain  quantity
26    deficiency for the purposes of this Section, the  rate  shall
27    be $1 per bushel for soybeans and 50 cents per bushel for all
28    other grains.
29        (d)  If  a  licensee  fails to have sufficient quality of
30    grain in store to meet outstanding storage  obligations  when
31    the value of the grain quality deficiency exceeds $1,000, the
32    licensee  must  post  collateral  with  the  Department in an
33    amount equal to the value of the  grain  quality  deficiency.
34    For  the  purposes  of  this  Section, the value of the grain
 
HB1458 Enrolled            -62-      LRB093 03693 RCE 07393 b
 1    quality deficiency shall be determined by applying prevailing
 2    market discount factors to all grain quality factors.
 3    (Source: P.A. 89-287, eff. 1-1-96; 89-463, eff. 5-31-96.)

 4        (240 ILCS 40/15-30)
 5        Sec. 15-30.  Financial and record  keeping  deficiencies;
 6    collateral and guarantees.
 7        (a)  An   applicant   or   a  licensee  has  a  financial
 8    deficiency  if  it  does  not  meet  the  minimum   financial
 9    requirements  of  Section  5-25 and subsection (b) of Section
10    10-15 of this Code.
11        (b)  A  licensee   must   collateralize   all   financial
12    deficiencies  at the rate of one dollar's worth of collateral
13    for each dollar of the aggregate sum of the individual  ratio
14    deficiencies,  the  net  worth  deficiencies,  and  90% asset
15    requirement deficiencies.
16        (c)  A licensee who  is  found  to  have  record  keeping
17    deficiencies,  other  than  in reference to violations as set
18    forth in subsection (b) of  Section  10-15  and  in  Sections
19    15-15  and  15-20,  may be required by the Department to post
20    collateral up to the amount of $10,000.
21        (d)  If an applicant for a new license or a renewal of  a
22    license  has  financial  deficiencies  or  the Department has
23    reason  to  believe  that  the  financial  stability  of   an
24    applicant  or  a  licensee is in question, the Department may
25    require the applicant or licensee to provide the  Department,
26    in  addition  to  collateral,  personal,  corporate, or other
27    related  person  guarantees  in  a  form  and  in  an  amount
28    satisfactory to the Department.
29        (e)  Subject to  subsection  (c)  of  Section  5-15,  the
30    posting of collateral and the delivery of guarantees does not
31    relieve  a licensee of the continuing obligation to otherwise
32    comply with the requirements imposed by the Code.
33    (Source: P.A. 89-287, eff. 1-1-96.)
 
HB1458 Enrolled            -63-      LRB093 03693 RCE 07393 b
 1        (240 ILCS 40/15-35)
 2        Sec. 15-35.  Return of collateral and guarantees.  If the
 3    next fiscal year's financial statement of a licensee received
 4    by  the  Department  and  an  examination  performed  by  the
 5    Department  after  delivery  or  posting  of   any   required
 6    collateral  or  the  guarantee  indicates  compliance  by the
 7    licensee with all statutory requirements  of  this  Code  for
 8    which  the  collateral  and  guarantees  were  required,  the
 9    collateral  and  guarantee shall be returned within 90 days a
10    reasonable period of time to the licensee and  the  guarantor
11    following  a  written  request for the return.  The financial
12    statement must comply with the requirements of Section 5-20.
13    (Source: P.A. 89-287, eff. 1-1-96.)

14        (240 ILCS 40/15-40)
15        Sec. 15-40.  Suspension and revocation of license.
16        (a)  The  Director  may  suspend  a  license   and   take
17    possession  and control of all grain assets and equity assets
18    (except that the  Department  may  not  take  possession  and
19    control  of  any equity asset on which there is a valid prior
20    perfected security interest or other  valid  prior  perfected
21    lien  without  the  prior,  written permission of the secured
22    party or lien  holder)  of  the  suspended  licensee  if  the
23    Department  has  reason  to believe that any of the following
24    has occurred:
25             (1)  A licensee has made  a  formal  declaration  of
26        insolvency;  failed to apply for license renewal, leaving
27        indebtedness to  claimants;  or  been  denied  a  license
28        renewal,  leaving indebtedness to claimants experienced a
29        failure or is unable to financially satisfy claimants  in
30        accordance with applicable statute, rule, or agreement if
31        a  bona  fide dispute does not exist between the licensee
32        and a claimant.
33             (2)  A licensee has failed to  pay  a  producer,  on
 
HB1458 Enrolled            -64-      LRB093 03693 RCE 07393 b
 1        demand,  for grain purchased from that producer, assuming
 2        no bona fide dispute exists with regard to the payment.
 3             (3)  A licensee is otherwise unable  to  financially
 4        satisfy  claimants  in  accordance  with  any  applicable
 5        statute, rule, or agreement, assuming a bona fide dispute
 6        does not exist between the licensee and the claimant.
 7             (4)  A  licensee  has  violated  any  of  the  other
 8        provisions of this Code and the violation, or the pattern
 9        of  the  violations,  would  create a substantial risk of
10        failure violated any of the provisions of this  Code  and
11        the  violation or the pattern of the violations indicates
12        an immediate danger of loss to potential claimants.
13             (5) (3)  A  licensee  has  failed  fails  to  pay  a
14        penalty or post  collateral or  guarantees  by  the  date
15        ordered by the Director.
16             (6) (4)  A  licensee  has  failed  fails  to  pay an
17        assessment as required by Section 5-30.
18        (b)  The Director may revoke a  license  if  any  of  the
19    following   occurs:   (1)  the   Director   finds,  after  an
20    administrative  hearing,  that  any  of   the   grounds   for
21    suspension  under  item  (a)(1),  (a)(2),  (a)(3), or (a)(4),
22    (a)(5), or (a)(6) of Section 15-40 have occurred.
23        (c) (2)  When a licensee voluntarily files for bankruptcy
24    under the federal bankruptcy laws, that filing constitutes  a
25    revocation of the license of the licensee on the day that the
26    filing occurs.
27        (d) (3)  When an order for relief is entered in reference
28    to  a licensee as a consequence of a petition for involuntary
29    bankruptcy filed under  the  federal  bankruptcy  laws,  that
30    order  constitutes a revocation of the license on the date of
31    that order.
32        (e) (c)   Within 10 days after suspension of  a  license,
33    an  administrative  hearing  shall  be commenced to determine
34    whether the license shall be reinstated or revoked.  Whenever
 
HB1458 Enrolled            -65-      LRB093 03693 RCE 07393 b
 1    an administrative hearing is scheduled, the licensee shall be
 2    served with written notice of the date, place,  and  time  of
 3    the  hearing  at  least  5 days before the hearing date.  The
 4    notice may be served by personal service on the  licensee  or
 5    by mailing it by registered or certified mail, return receipt
 6    requested, to the licensee's place of business.  The Director
 7    may,  after  a  hearing,  issue  an  order either revoking or
 8    reinstating the license.
 9    (Source: P.A. 89-287, eff. 1-1-96.)

10        (240 ILCS 40/15-45)
11        Sec. 15-45.  Criminal offenses.
12        (a)  A person who causes a warehouse receipt for grain to
13    be issued knowing that the grain  for  which  that  warehouse
14    receipt  is issued is not under the licensee's control at the
15    time of issuing that  warehouse  receipt,  or  who  causes  a
16    licensee  to issue a warehouse receipt for grain knowing that
17    the warehouse receipt contains any false  representation,  is
18    guilty of a Class 2 3 felony.
19        (b)  A   person   who,   knowingly   and  without  lawful
20    authority,  disposes  of  grain  represented  by  outstanding
21    warehouse  receipts  or  covered   by   unreceipted   storage
22    obligations is guilty of a Class 2 3 felony.
23        (c)  A   person   who,   knowingly   and  without  lawful
24    authority:
25             (1)  withholds records from the Department;
26             (2)  keeps, creates, or files  with  the  Department
27        false, misleading, or inaccurate records;
28             (3)  alters   records   without  permission  of  the
29        Department; or
30             (4)  presents to the Department any materially false
31        or misleading records;
32    is guilty of a Class 2 3 felony.
33        (d)  A licensee who, after suspension  or  revocation  of
 
HB1458 Enrolled            -66-      LRB093 03693 RCE 07393 b
 1    its license, knowingly and without legal authority refuses to
 2    surrender  to the Department all books, accounts, and records
 3    relating to the  licensee  that  are  in  its  possession  or
 4    control is guilty of a Class 2 3 felony.
 5        (e)  A   licensee   who   knowingly  impedes,  obstructs,
 6    hinders, or otherwise prevents or  attempts  to  prevent  the
 7    Director  from  performing his or her duties under this Code,
 8    or  who  knowingly  refuses  to  permit  inspection  of   its
 9    premises,  books,  accounts, or records by the Department, is
10    guilty of a Class A misdemeanor.
11        (f)  A person  who,  knowingly  and  without  a  license,
12    engages  in  the business of a grain dealer or a warehouseman
13    for which a license is required under the Code is guilty of a
14    Class A misdemeanor.
15        (g)  A person who, intentionally, knowingly  and  without
16    lawful authority:
17             (1)  fails to maintain sufficient assets as required
18        by subsection (b) of Section 10-15; or
19             (2)  issues  a collateral warehouse receipt covering
20        grain purchased by a price later contract to  the  extent
21        the purchase price has not been paid by the grain dealer;
22    is guilty of a Class 3 4 felony.
23        (h)  In  case  of  a  continuing  violation,  each  day a
24    violation occurs constitutes a separate and distinct offense.
25    (Source: P.A. 89-287, eff. 1-1-96.)

26        (240 ILCS 40/20-10)
27        Sec. 20-10.  Lien on grain assets and equity assets.
28        (a)  A statutory lien  shall  be  imposed  on  all  grain
29    assets and equity assets in favor of and to secure payment of
30    obligations of the licensee to:
31             (1)  A  person,  including,  without  limitation,  a
32        lender:
33                  (A)  who  possesses  warehouse  receipts issued
 
HB1458 Enrolled            -67-      LRB093 03693 RCE 07393 b
 1             from an Illinois warehouse location  covering  grain
 2             owned or stored by a warehouseman;
 3                  (B)  who   has  other  written  evidence  of  a
 4             storage obligation of a warehouseman issued from  an
 5             Illinois  warehouse location in favor of the holder,
 6             including,  but  not  limited  to,  scale   tickets,
 7             settlement sheets, and ledger cards; or
 8                  (C)  who has loaned money to a warehouseman and
 9             was  to receive a warehouse receipt from an Illinois
10             location as security for that loan,  who surrendered
11             warehouse receipts as a part of a grain sale  at  an
12             Illinois location, or who has delivered grain out of
13             storage  with  the warehouseman as a part of a grain
14             sale at an Illinois location and:
15                       (i)  the  grain  dealer  or   warehouseman
16                  experienced    a   failure   within   21   days
17                  thereafter, a warehouse receipt was not issued,
18                  and payment in full was not made; or
19                       (ii)  written  notice  was  given  by  the
20                  person  to  the  Department  within   21   days
21                  thereafter stating that a warehouse receipt was
22                  not issued and payment in full was not made.
23             (2)  A  producer  who possesses evidence of the sale
24        at an Illinois location of grain delivered to that failed
25        a grain dealer, or its designee, and who  was  not  fully
26        paid in full.
27        This statutory lien arises, attaches, and is perfected at
28    the  date  of  delivery  of grain, and is at that time deemed
29    assigned by the operation of this Code to the Department.
30        (b)  The lien on grain assets created under this  Section
31    shall  be preferred and prior to any other lien, encumbrance,
32    or security interest relating to those  assets  described  in
33    the  definition of "grain assets" in Section 1-10, regardless
34    of  the  time  the  other  lien,  encumbrance,   or  security
 
HB1458 Enrolled            -68-      LRB093 03693 RCE 07393 b
 1    interest attached or became perfected.  The  lien  on  equity
 2    assets created under this Section shall also be preferred and
 3    prior  to  any  other lien, encumbrance, or security interest
 4    relating to "equity assets" as defined in Section 1-10 to the
 5    extent a creditor does not have a valid security interest in,
 6    or other lien on, the property that was  perfected  prior  to
 7    the  date  of  failure  of  the  licensee. The lien on equity
 8    assets  created  under  this  Section,  however,   shall   be
 9    subordinate  and  subject  to any other lien, encumbrance, or
10    security interest relating to "equity assets" as  defined  in
11    Section  1-10  to  the extent a creditor has a valid security
12    interest in or other valid lien  on  the  property  that  was
13    perfected  prior  to  the  date  of  failure of the licensee;
14    provided, however, that a creditor is not deemed  to  have  a
15    valid  security  interest  or other valid lien on property if
16    (i) the property can be directly traced  as  being  from  the
17    sale  of  grain  by the licensee or failed licensee; (ii) the
18    security interest  was  taken  as  additional  collateral  on
19    account of an antecedent debt owed to the creditor; and (iii)
20    the  security  interest or other lien was perfected (A) on or
21    within 90 days before the date of failure of the licensee  or
22    (B) when the creditor is a related person, within one year of
23    the date of failure of the licensee.
24        (c)  To  the  extent  any  portion of this Code conflicts
25    with  any  portion  of  the  Uniform  Commercial  Code,   the
26    provisions of this Code control.
27        (d)  If an adversarial proceeding is commenced to recover
28    "grain  assets"  or "equity assets" upon which a lien created
29    under this Section is imposed and if the Department  declines
30    to  take part in that adversarial proceeding, the Department,
31    upon application to  the  Director  by  any  claimant,  shall
32    assign  to  the  claimant  the  statutory  lien to permit the
33    claimant to pursue the lien in  the  adversarial  proceeding,
34    but  only  if  the assignment and adversarial proceeding will
 
HB1458 Enrolled            -69-      LRB093 03693 RCE 07393 b
 1    not delay the Department's liquidation  and  distribution  of
 2    grain  assets,  equity  assets,  collateral,  and guarantees,
 3    including proceeds thereof, to all  claimants  holding  valid
 4    claims.
 5    (Source: P.A. 89-287, eff. 1-1-96.)

 6        (240 ILCS 40/20-15)
 7        Sec.  20-15.   Liquidation  procedures.   When a licensee
 8    experiences a failure, the Department has  the  authority  to
 9    and shall:
10        (a)  Immediately  post  notice  at  all  locations of the
11    failed licensee stating that the licensee has  experienced  a
12    failure  and  that  the license has been terminated and is no
13    longer effective.
14        (b)  Immediately take physical control and possession  of
15    the  failed licensee's facility, including but not limited to
16    all offices and grain storage facilities, books, records, and
17    any other property necessary or desirable to liquidate  grain
18    assets and equity assets.
19        (c)  Give  public  notice  and notify all known potential
20    claimants by certified mail of the licensee's failure and the
21    processes necessary to file grain claims with the  Department
22    as set forth in Section 25-5.
23        (d)  Perform an examination of the failed licensee.
24        (e)  Seize  and  take  possession of, protect, liquidate,
25    and collect upon all grain assets, collateral, and guarantees
26    of or  relating  to  the  failed  licensee  and  deposit  the
27    proceeds  into  the Trust Account. If at any time it appears,
28    however, in the judgment of the Department that the costs  of
29    seizing  and  taking  possession of, protecting, liquidating,
30    and  collecting  upon  any  or  all  of  the  grain   assets,
31    collateral,  and  guarantees  equals  or exceeds the expected
32    recovery to the Department, the Department may elect  not  to
33    pursue   seizing   and   taking  possession  of,  protecting,
 
HB1458 Enrolled            -70-      LRB093 03693 RCE 07393 b
 1    liquidating, and collecting upon any or all of the assets.
 2        (f)  Seize, take possession of, protect,  liquidate,  and
 3    collect  upon  the  equity  assets of the failed licensee and
 4    deposit the proceeds into the Trust account if the Department
 5    has first obtained the  written  consent  of  all  applicable
 6    secured  parties  or lien holders, if any.  If at any time it
 7    appears, however, in the judgment of the Department that  the
 8    costs  of  seizing  and  taking  possession  of,  protecting,
 9    liquidating,  and  collecting  upon  any or all of the equity
10    assets  equals  or  exceeds  the  expected  recovery  to  the
11    Department, the Department may elect not  to  pursue  seizing
12    and   taking  possession  of,  protecting,  liquidating,  and
13    collecting upon any or all of  the  equity  assets.   If  the
14    Department  does  not  otherwise  pursue  seizing  and taking
15    possession of, protecting, liquidating, and  collecting  upon
16    any  of  the  equity  assets,  the  Department  may  bring or
17    participate in  any  liquidation  or  collection  proceedings
18    involving  the applicable secured parties or other interested
19    party, if  any,  and  shall  have  the  rights  and  remedies
20    provided  by  law, including the right to enforce its lien by
21    any available judicial procedure.
22        If an applicable secured party or lien  holder  does  not
23    consent  to  the  Department  seizing,  taking possession of,
24    liquidating,  or  collecting  upon  the  equity  assets,  the
25    secured party or  lien  holder  shall  have  the  rights  and
26    remedies provided by law or by agreement with the licensee or
27    failed  licensee, including the right to enforce its security
28    interest or lien by any available judicial procedure.
29        (g)  Make available on demand to  an  applicable  secured
30    party  or  lien  holder  the  equity asset, to the extent the
31    Department seized or otherwise gained possession  or  control
32    of  the  equity  asset,  but the secured party or lien holder
33    does not consent to the Department liquidating and collecting
34    upon the equity asset.
 
HB1458 Enrolled            -71-      LRB093 03693 RCE 07393 b
 1    (Source: P.A. 89-287, eff. 1-1-96.)

 2        (240 ILCS 40/20-20)
 3        Sec. 20-20.  Liquidation expenses.
 4        (a)  The Trustee shall pay from  the  Trust  Account  all
 5    reasonable  expenses  incurred by the trustee on or after the
 6    date of failure in  reference  to  seizing,  preserving,  and
 7    liquidating  the grain assets, equity assets, collateral, and
 8    guarantees of or relating to a  failed  licensee,  including,
 9    but  not limited to, the hiring of temporary field personnel,
10    equipment  rental,  auction  expenses,  mandatory   commodity
11    check-offs, and clerical expenses.
12        (b)  Except  as  to  claimants  holding valid claims, any
13    outstanding  indebtedness  of  a  failed  licensee  that  has
14    accrued before the date of failure shall not be paid  by  the
15    Trustee and shall represent a separate cause of action of the
16    creditor against the failed licensee.
17        (c)  The  Trustee shall report all expenditures paid from
18    the Trust Account to the Corporation at least  annually.
19        (d)  To the extent assets are available under  subsection
20    (g)  of  Section 25-20 and upon presentation of documentation
21    satisfactory to the Trustee, the Trustee shall transfer  from
22    the  Trust  Account  to  the Regulatory Fund an amount not to
23    exceed the expenses incurred by the Department in performance
24    of its duties under Article 20 of this Code, in reference  to
25    the failed licensee.
26    (Source: P.A. 89-287, eff. 1-1-96.)

27        (240 ILCS 40/25-5)
28        Sec. 25-5.   Adjudication of claims.  When a licensee has
29    experienced  a  failure,  the  Department  shall  process the
30    claims in the following manner:
31        (a)  The Department shall publish once each  week  for  3
32    successive   weeks  in  at  least  3  newspapers  of  general
 
HB1458 Enrolled            -72-      LRB093 03693 RCE 07393 b
 1    circulation within the county of the licensee, and shall mail
 2    or deliver to  each  claimant  whose  name  and  post  office
 3    address  are  known  or  are  reasonably ascertainable by the
 4    Department, a notice stating:
 5             (1)  That the licensee has experienced a failure and
 6        the date of that failure.
 7             (2)  The place and post office address where  claims
 8        may be filed.
 9             (3)  The  procedure for filing claims, as determined
10        by rule.
11             (4)  That a claimant's claims shall be barred if not
12        filed with the Department on or before the later of:
13                  (A)  the claim date, which  shall  be  90  days
14             after the date of failure of the licensee; or
15                  (B)  7  days from the date notice was mailed to
16             a claimant if the date notice  was  mailed  to  that
17             claimant is on or before the claim date.
18        (b)  Time of notice.
19             (1)  The  first date of publication of the notice as
20        provided for in subsection (a) of this Section  shall  be
21        within 30 days after the date of failure.
22             (2)  The   published   notice  as  provided  for  in
23        subsection (a) of this Section shall be published  in  at
24        least  3  newspapers  of  general circulation in the area
25        formerly served by the failed licensee.
26             (3)  The notice as provided for in subsection (a) of
27        this Section shall be mailed by  certified  mail,  return
28        receipt  requested,  within  60  days  after  the date of
29        failure to each  claimant  whose  name  and  post  office
30        address  are known by the Department within 60 days after
31        the date of failure.
32        (c)  Every claim filed must be in writing, and  verified,
33    and  signed by a person who has the legal authority to file a
34    claim on behalf of the claimant and  must  state  information
 
HB1458 Enrolled            -73-      LRB093 03693 RCE 07393 b
 1    sufficient  to  notify  the  Department  of the nature of the
 2    claim and the amount sought.
 3        (d)  A claim  shall  be  barred  and  disallowed  in  its
 4    entirety if:
 5             (1)  notice  is  published and given to the claimant
 6        as provided for  in  subsections  (a)  and  (b)  of  this
 7        Section  and  the claimant does not file a claim with the
 8        Department on or before the claim date; or
 9             (2)  the claimant's name or post office  address  is
10        not  known  by  the  Department or cannot, within 60 days
11        after the date of failure, be reasonably  ascertained  by
12        the  Department  and  the  claimant does not file a claim
13        with the Department on or before the later of  the  claim
14        date  or  7 days after the date notice was mailed to that
15        claimant if the date notice was mailed to  that  claimant
16        is on or before the claim date.
17        (e)  Subsequent notice.
18             (1)  If, more than 60 days after the date of failure
19        but  before  the claim date, the Department learns of the
20        name and post  office  address  of  a  claimant  who  was
21        previously  not  notified  by the Department by mail, the
22        Department shall mail by certified mail,  return  receipt
23        requested,  the notice to the claimant as provided for in
24        subsection (a) of this Section.
25             (2)  The notice  mailed  as  provided  for  in  item
26        (e)(1)  of  this  Section  shall not extend the period of
27        time in which a claimant may file its  claim  beyond  the
28        claim  date.  A  claimant  to whom notice is mailed under
29        item (e)(1) of this  Section,  however,  shall  have  the
30        later  of  the claim date or 7 days after the date notice
31        was mailed to file a claim with the Department.
32        (f)  The  Department  shall   determine   the   validity,
33    category,  and amount of each claim within 120 days after the
34    date of failure of  the  licensee  and.  (g)  The  Department
 
HB1458 Enrolled            -74-      LRB093 03693 RCE 07393 b
 1    shall  give  written  notice  within that time period to each
 2    claimant and to  the  failed  licensee  of  the  Department's
 3    determination  as  to  the  validity, category, and amount of
 4    each claim.
 5        (g) (h)  A claimant or the failed licensee may request  a
 6    hearing  on  the  Department's  determination  within 30 days
 7    after receipt of the written notice and the hearing shall  be
 8    held  in  the  county  of  residence  of  the claimant and in
 9    accordance with rules. Under no circumstances  shall  payment
10    to  claimants  who have not requested a hearing be delayed by
11    reason  of  the  request  for  a  hearing  by  any  unrelated
12    claimant.
13        (h)  Within 30 days after a failure of  a  licensee,  the
14    Director  shall  appoint  an Administrative Law Judge for the
15    hearings.  The Director shall appoint a  person  licensed  to
16    practice   law   in   this  State;  who  is  believed  to  be
17    knowledgeable  with  regard  to  agriculture  and  the  grain
18    industry in Illinois; who has no conflict  of  interest;  and
19    who  at the time of his or her appointment is not working for
20    or employed by the Department in any capacity whatsoever.
21        (i)  For the purposes of this  Article,  the  "reasonably
22    ascertainable"   standard   shall   be   satisfied  when  the
23    Department conducts a review of the failed  licensee's  books
24    and records and an interview of office and clerical personnel
25    of the failed licensee.
26        (j)  It  is  the intent of this Act that the time periods
27    and deadlines in this Section 25-5 are absolute, and are  not
28    to  be  tolled,  or their operation halted or delayed. In the
29    event of a bankruptcy by a licensee, the Director shall  seek
30    to  have  commenced  any  proceedings  that are necessary and
31    appropriate to lift the automatic stay or make  it  otherwise
32    inapplicable  to the actions of the Department with regard to
33    the claims determination process. In  all  other  cases,  the
34    Department  shall  seek  to  have  commenced  the proceedings
 
HB1458 Enrolled            -75-      LRB093 03693 RCE 07393 b
 1    necessary to expeditiously remove or lift any  order  of  any
 2    court  or  administrative  agency that might attempt to delay
 3    the time periods and  deadlines  contained  in  this  Section
 4    25-5.
 5    (Source: P.A. 89-287, eff. 1-1-96.)

 6        (240 ILCS 40/25-10)
 7        Sec. 25-10.  Claimant compensation.  Within 30 days after
 8    the  day  on  which a claim becomes a valid claim, a claimant
 9    shall be compensated to the extent  of  its  valid  claim  as
10    provided in this Section.
11        It  is  the  express intent of this legislation that each
12    undisputed portion of a claim shall  be  paid  in  accordance
13    with  the  deadlines of this Code, even if there are disputed
14    portions of the claim. For example, the  amount  of  a  valid
15    claim  calculated  for an "unpriced obligation" shall be paid
16    to the claimant despite the fact that  claimant  additionally
17    seeks the amount for a "priced obligation".
18        Each claimant shall be compensated in accordance with the
19    following provisions:
20        (a)  Valid  claims  filed by warehouse claimants shall be
21    paid 100% of the amount determined by the Department  out  of
22    the  net  proceeds  of the liquidation of grain assets as set
23    forth in this subsection (a).  To the extent the net proceeds
24    are insufficient, warehouse claimants shall be paid their pro
25    rata share of the net proceeds of the  liquidation  of  grain
26    assets  and,  subject  to  subsection (j) of this Section, an
27    additional amount per claimant not to exceed the  balance  of
28    their respective claims out of the Fund.
29        (b)  Subject  to  subsection  (j) of this Section, if the
30    net proceeds as set forth in subsection (a) of  this  Section
31    are  insufficient  to  pay  in full all valid claims filed by
32    warehouse claimants as payment becomes due, the balance shall
33    be paid out of the Fund in accordance with subsection (b)  of
 
HB1458 Enrolled            -76-      LRB093 03693 RCE 07393 b
 1    Section 25-20.
 2        (c)  Valid claims filed by producers who:
 3             (1)  have  delivered grain within 21 days before the
 4        date of  failure,  or  the  date  of  suspension  if  the
 5        suspension  results  in  a  failure, for which pricing of
 6        that grain has been completed before date of failure; or
 7             (2)  gave written notice to the Department within 21
 8        days of the date of delivery of grain, if the pricing  of
 9        that  grain  has been completed, that payment in full for
10        that grain has not been made;
11    shall be paid, subject to subsection  (j)  of  this  Section,
12    100%  of  the  amount  of  the  valid claim determined by the
13    Department.  Valid claims that are included in subsection (c)
14    of this Section shall receive no payment under subsection (d)
15    of this Section, and any claimant having a valid claim  under
16    this  subsection  (c)  determined  by the Department to be in
17    excess of the limits, if any, imposed under subsection (j) of
18    this Section shall be paid  only  sums  in  excess  of  those
19    limits  to  the  extent  additional  money is available under
20    subsection (d)(2) of Section 25-20.
21        (d)  Valid claims that are not included in subsection (c)
22    of this Section that are filed by producers where  the  later
23    date  of  completion of who completed delivery or and pricing
24    of the grain in reference to the valid  claim,  whichever  is
25    later,  within  160  days before the date of failure shall be
26    paid 85% of the amount of the valid claim determined  by  the
27    Department  or  $250,000  $100,000,  whichever  is  less, per
28    claimant. In computing the 160-day period, the  phrase  "date
29    of  completion  of  delivery"  means  the  date  of  the last
30    delivery of grain to be applied to the  quantity  requirement
31    of  the  contract,  and the phrase "the later date" means the
32    date closest to the date of failure.  In addition, for claims
33    filed by producers for grain sold on a contract, however, the
34    later of the date of execution of the contract or the date of
 
HB1458 Enrolled            -77-      LRB093 03693 RCE 07393 b
 1    delivery of grain in reference to the grain  covered  by  the
 2    price  later  contract  must  not  be  more than 365 270 days
 3    before the date of failure  in  order  for  the  claimant  to
 4    receive  any  compensation.  In computing the 365-day period,
 5    the phrase "the later of the date" means the date closest  to
 6    the  date of failure, and the phrase "date of delivery" means
 7    the date of the last delivery of grain to be applied  to  the
 8    quantity requirement of the price later contract.
 9        (e)  Valid  claims filed by producers for grain sold on a
10    price later contract, for which the final price has not  been
11    established,  shall  be  paid  85% of the amount of the valid
12    claims determined by the  Department  or  $250,000  $100,000,
13    whichever  is less, per claimant, if the later of the date of
14    execution of the contract or the date of delivery of grain in
15    reference to the grain covered by the  price  later  contract
16    occurred  not  no  more  than 365 270 days before the date of
17    failure. In computing the 365-day  period,  the  phrase  "the
18    later  of  the  date"  means  the date closest to the date of
19    failure, and the phrase "date of delivery" means the date  of
20    the  last  delivery  of  grain  to be applied to the quantity
21    requirement of the price later contract.
22        The execution of subsequent price later contracts by  the
23    producer  and  the licensee for grain previously covered by a
24    price later contract shall not extend the coverage of a claim
25    beyond the original 365 270 days.
26        (f)  The maximum payment to producers  under  subsections
27    (d)  and  (e)  of  this  Section, combined, shall be $250,000
28    $100,000 per claimant.
29        (g)  The following claims shall be barred and  disallowed
30    in  their  entirety and shall not be entitled to any recovery
31    from the Fund or the Trust Account:
32             (1)  Claims filed by producers where both  the  date
33        of  completion of delivery and the date of pricing of the
34        grain are who completed pricing of the grain in reference
 
HB1458 Enrolled            -78-      LRB093 03693 RCE 07393 b
 1        to their claim in excess of 160 days before the  date  of
 2        failure.
 3             (2)  Claims  filed  by producers for grain sold on a
 4        price  later  contract  if  the  later  of  the  date  of
 5        execution of the contract or  the  date  of  delivery  of
 6        grain  in  reference  to  the  grain covered by the price
 7        later contract occurred more than 365 270 days before the
 8        date of failure.  In computing the  365-day  period,  the
 9        phrase  "the later of the date" means the date closest to
10        the date of failure, and the phrase  "date  of  delivery"
11        means  the  date  of  the  last  delivery  of grain to be
12        applied to the quantity requirement of  the  price  later
13        contract.
14             (3)  Claims  filed  by  any  claimant that are based
15        upon or acquired by fraudulent or  illegal  acts  of  the
16        claimant.
17        (h)  To  the  extent moneys are available, additional pro
18    rata payments may be made to claimants under  subsection  (d)
19    of Section 25-20.
20        (i)  For  purposes  of  this  Section,  a  claim filed in
21    connection with warehouse receipts that are possessed under a
22    collateral pledge of a producer, or that  are  subject  to  a
23    perfected  security  interest,  or  that  were  acquired by a
24    secured party  or  lien  holder  under  an  obligation  of  a
25    producer, shall be deemed to be a claim filed by the producer
26    and  not  a  claim  filed  by  the  secured party or the lien
27    holder, regardless of whether  the  producer  is  in  default
28    under  that  collateral  pledge, security agreement, or other
29    obligation.
30        (j)  With respect to any failure occurring  on  or  after
31    July  1,  1998,  The  maximum  payment  out  of  the Fund for
32    claimants under subsection (a), (b) of this Section shall  be
33    $1,000,000  per  claimant  and the maximum payment out of the
34    Fund for claimants under subsections (c),  (d),  and  (e)  of
 
HB1458 Enrolled            -79-      LRB093 03693 RCE 07393 b
 1    this Section, combined, shall be $1,000,000 per claimant.
 2        (k)  The  amounts to be paid to warehouse valid claimants
 3    and  grain  dealer  valid  claimants  shall   be   calculated
 4    according to the following:
 5             (1)  Valid  claimants  who have warehouse claims, or
 6        who have grain dealer claims for  grain  sold,  delivered
 7        but  unpriced  as  of  the  date  of  failure, shall have
 8        "unpriced obligations", and to determine the  per  bushel
 9        value  of  these valid claims the Department shall use an
10        average of the cash bid prices on  the  date  of  failure
11        from  grain dealers located within the market area of the
12        failed licensee, and the cash bid price  offered  by  the
13        failed   licensee   on   the   date   of   failure,  less
14        transportation, handling costs, and discounts  applicable
15        as of that date.
16             (2)  Valid  claimants  who  have grain dealer claims
17        for grain sold, delivered, and priced as of the  date  of
18        failure  shall  have  "priced obligations", and the price
19        per bushel to be used in calculating the compensation due
20        these valid claimants shall be that which has been agreed
21        upon by  the  failed  licensee  and  the  claimant,  less
22        applicable  discounts.  For  purposes of this item (2), a
23        person has "priced" his or her grain if  he  or  she  has
24        done  those  things necessary under the agreement to set,
25        choose, or select a price for any portion  of  the  grain
26        under  the agreement, without regard to whether he or she
27        has received a check in payment for the grain,  or  could
28        have  received a check in payment for the grain, prior to
29        the failure.
30        (l)  Arrangements  whereby  a  producer  agrees  with   a
31    licensee  to defer receipt of payment of amounts due from the
32    sale of grain are covered by this Code  and  are  not  to  be
33    considered  loans  by  the  producer to the licensee, despite
34    payments to the producer as an inducement for the leaving  of
 
HB1458 Enrolled            -80-      LRB093 03693 RCE 07393 b
 1    moneys  with  the  licensee, unless the licensee has executed
 2    and delivered to the  producer  a  promissory  note  covering
 3    those amounts.
 4    (Source: P.A. 91-213, eff. 7-20-99.)

 5        (240 ILCS 40/25-20)
 6        Sec. 25-20.  Priorities and repayments.
 7        (a)  All  valid  claims  shall  be  paid  from  the Trust
 8    Account,  as  provided  in  Section  25-10,  first  from  the
 9    proceeds realized from liquidation of and collection upon the
10    grain assets relating to the failed licensee, as to warehouse
11    claimants, and the equity assets as to  a  secured  party  or
12    lien  holder  who has consented to the Department liquidating
13    and  collecting  upon  the  equity  asset  as  set  forth  in
14    subsection (f) of Section 20-15,  and  the  remaining  equity
15    assets,  collateral,  and  guarantees  relating to the failed
16    licensee, as to grain dealer claimants.
17        (b)  If the proceeds realized  from  liquidation  of  and
18    collection  upon the grain assets, equity assets, collateral,
19    and  guarantees  relating  to   the   failed   licensee   are
20    insufficient  to  pay all valid claims as provided in Section
21    25-10 and subsection (a) of this Section as payment on  those
22    claims becomes due, the Director shall request from the Board
23    sufficient funds to be transferred from the Fund to the Trust
24    Account  to  pay  the balance owed to claimants as determined
25    under Section 25-10.  If a request is made  by  the  Director
26    for  a  transfer of funds to the Trust Account from the Fund,
27    the Board shall act on that request within 25 days after  the
28    date  of  that request.  Once moneys are transferred from the
29    Fund to the Trust Account, the Director shall pay the balance
30    owed to claimants in accordance with Section 25-10.
31        (c)  Net proceeds from liquidation of grain assets as set
32    forth in subsection (a) of  Section  25-10  received  by  the
33    Department,  to  the  extent  not  already  paid to warehouse
 
HB1458 Enrolled            -81-      LRB093 03693 RCE 07393 b
 1    claimants, shall be prorated among the fund and all warehouse
 2    claimants who have not had their valid claims paid in full.
 3             (1)  The pro rata distribution to the Fund shall  be
 4        based  upon  the  total  amount  of  valid  claims of all
 5        warehouse claimants who have had their valid claims  paid
 6        in  full.   The  pro  rata distribution to each warehouse
 7        claimant who has not had his or her valid claims paid  in
 8        full  shall  be  based  upon  the  total  amount  of that
 9        claimant's original valid claims.
10             (2)  If the net proceeds  from  the  liquidation  of
11        grain  assets  as  set forth in subsection (a) of Section
12        25-10 exceed all amounts  needed  to  satisfy  all  valid
13        claims   filed   by   warehouse  claimants,  the  balance
14        remaining shall be paid into the Trust Account or as  set
15        forth in subsection (h).
16        (d)  Subject to subsections (c) and (h):
17             (1)  The  proceeds  realized from liquidation of and
18        collection  upon  the  grain   assets,   equity   assets,
19        collateral,   and   guarantees  relating  to  the  failed
20        licensee or any  other  assets  relating  to  the  failed
21        licensee  that  are  received  by  the Department, to the
22        extent not already paid to claimants, shall be first used
23        to repay the Fund for moneys  transferred  to  the  Trust
24        Account.
25             (2)  After the Fund is repaid in full for the moneys
26        transferred  from it to pay the valid claims in reference
27        to a failed licensee,  any  remaining  proceeds  realized
28        from liquidation of and collection upon the grain assets,
29        equity assets, collateral, and guarantees relating to the
30        failed  licensee  thereafter  received  by the Department
31        shall be prorated to the claimants holding  valid  claims
32        who  have  not received 100% of the amount of their valid
33        claims based  upon  the  unpaid  amount  of  their  valid
34        claims.
 
HB1458 Enrolled            -82-      LRB093 03693 RCE 07393 b
 1        (e)  After all claimants have received 100% of the amount
 2    of  their  valid  claims,  to the extent moneys are available
 3    interest at the rate of 6% per annum shall  be  assessed  and
 4    paid  to  the Fund on all moneys transferred from the Fund to
 5    the Trust Account.
 6        (f)  After the Fund is paid the interest as  provided  in
 7    subsection  (e) of this Section, then those claims barred and
 8    disallowed under subsection (g) of  Section  25-10  shall  be
 9    paid  on  a pro rata basis only to the extent that moneys are
10    available.
11        (g)  Once all claims become valid claims  and  have  been
12    paid  in  full and all interest as provided in subsection (e)
13    of this Section is paid in full, and all claims are  paid  in
14    full under subsection (f), any remaining grain assets, equity
15    assets, collateral, and guarantees, and the proceeds realized
16    from  liquidation  of  and  collection upon the grain assets,
17    equity assets, collateral, and  guarantees  relating  to  the
18    failed  licensee, shall be returned to the failed licensee or
19    its  assignee,  or  as  otherwise  directed  by  a  court  of
20    competent jurisdiction.
21        (h)  If amounts in the Fund are insufficient to  pay  all
22    valid claims, the Corporation shall transfer from the Reserve
23    Fund  to  the  Fund  amounts  sufficient to satisfy the valid
24    claims, and to the extent the amounts  thus  transferred  are
25    insufficient  to  pay  all valid claims, the General Assembly
26    shall appropriate to the Corporation  amounts  sufficient  to
27    satisfy  the  valid  claims.   If  for any reason the General
28    Assembly  fails  to  make   an   appropriation   to   satisfy
29    outstanding   valid   claims,   this   Code   constitutes  an
30    irrevocable  and  continuing  appropriation  of  all  amounts
31    necessary for that purpose and the irrevocable and continuing
32    authority for and direction to the State Comptroller  and  to
33    the  State  Treasurer  to  make  the  necessary transfers and
34    disbursements from the revenues and funds of  the  State  for
 
HB1458 Enrolled            -83-      LRB093 03693 RCE 07393 b
 1    that  purpose.  Subject to payments to warehouse claimants as
 2    set forth in subsection (c) of Section 25-20, the State shall
 3    be first reimbursed, and the Reserve Fund shall thereafter be
 4    reimbursed to the extent needed to restore the  Reserve  Fund
 5    to  a  level of $2,000,000 of principal (not including income
 6    on the assets in the Reserve Fund) as soon  as  funds  become
 7    available  for  any amounts paid under subsection (g) of this
 8    Section upon replenishment of the Fund from assessments under
 9    subsections subsection (d), (f), and (g) of Section 5-30  and
10    collection  upon grain assets, equity assets, collateral, and
11    guarantees relating to the failed licensee.
12        (i)  The Department shall have those rights of  equitable
13    subrogation  which  may result from a claimant receiving from
14    the Fund payment in full of the  obligations  of  the  failed
15    licensee to the claimant.
16    (Source: P.A. 91-213, eff. 7-20-99.)

17        (240 ILCS 40/30-5)
18        Sec. 30-5.  Illinois Grain Insurance Corporation.
19        (a)  The  Corporation  is  a  political subdivision, body
20    politic, and public corporation. The governing powers of  the
21    Corporation  are vested in the Board of Directors composed of
22    the Director, who shall personally serve  as  president;  the
23    Attorney  General  or his or her designee, who shall serve as
24    secretary; the State Treasurer or his or  her  designee,  who
25    shall  serve  as treasurer; the Director of the Department of
26    Insurance or his  or  her  designee;  and  the  chief  fiscal
27    officer  of  the  Department.  Three  members  of  the  Board
28    constitute  a  quorum  at  any  meeting of the Board, and the
29    affirmative vote of 3 members is  necessary  for  any  action
30    taken  by the Board at a meeting, except that a lesser number
31    may adjourn a meeting from time to time.  A  vacancy  in  the
32    membership of the Board does not impair the right of a quorum
33    to  exercise all the rights and perform all the duties of the
 
HB1458 Enrolled            -84-      LRB093 03693 RCE 07393 b
 1    Board and Corporation.
 2        (b)  The Corporation has the following  powers,  together
 3    with  all  powers incidental or necessary to the discharge of
 4    those powers in corporate form:
 5             (1)  To have perpetual succession by  its  corporate
 6        name as a corporate body.
 7             (2)  To   adopt,   alter,  and  repeal  bylaws,  not
 8        inconsistent with the provisions of this  Code,  for  the
 9        regulation and conduct of its affairs and business.
10             (3)  To  adopt  and make use of a corporate seal and
11        to alter the seal at pleasure.
12             (4)  To avail itself  of  the  use  of  information,
13        services,  facilities,  and  employees  of  the  State of
14        Illinois in carrying out the provisions of this Code.
15             (5)  To receive funds,  printer  registration  fees,
16        and penalties assessed by the Department under this Code.
17             (6)  To  administer  the  Fund by investing funds of
18        the Corporation that the  Board  may  determine  are  not
19        presently needed for its corporate purposes.
20             (7)  To  receive  funds  from the Trust  Account for
21        deposit into the  Fund.
22             (8)  Upon the  request  of  the  Director,  to  make
23        payment  from  the Fund and the Reserve Fund to the Trust
24        Account when payment is necessary to compensate claimants
25        in accordance with the provisions of Section 25-20 or for
26        payment of refunds to licensees in  accordance  with  the
27        provisions of this Code.
28             (9)  To  authorize,  receive,  and disburse funds by
29        electronic means.
30             (10)  To make any inquiry and  investigation  deemed
31        appropriate  with  regard to the failure of any licensee,
32        including but not limited to analyzing the causes of  and
33        reasons  for  the  failure;  determining the adequacy and
34        accuracy of Department examinations and other  regulatory
 
HB1458 Enrolled            -85-      LRB093 03693 RCE 07393 b
 1        measures   with   regard  to  the  failed  licensee;  and
 2        analyzing whether the handling  of  the  liquidation  and
 3        payment  process  by  the Department was done in a manner
 4        that  served  the  interests  of  those   persons   whose
 5        interests this Code was designed to protect.
 6             (11) (9)  To have those powers that are necessary or
 7        appropriate  for  the exercise of the powers specifically
 8        conferred upon the Corporation and all incidental  powers
 9        that are customary in corporations.
10        (c)  A  committee of advisors shall be created to provide
11    technical assistance and advice and make  recommendations  to
12    the  Board.  The advisory committee shall assist the board in
13    understanding pertinent developments in grain production  and
14    marketing  and  the  grain  industry.  The advisory committee
15    shall be composed of one grain  producer  designated  by  the
16    Illinois  Farm  Bureau;  one grain producer designated by the
17    Illinois Farmers Union; one grain producer designated by  the
18    Illinois   Corn   Growers  Association;  one  grain  producer
19    designated   by   the   Illinois   Soybean   Association;   2
20    representatives of the  grain  industry,  designated  by  the
21    Grain and Feed Association of Illinois; and 2 representatives
22    of  the lending industry, one each designated by the Illinois
23    Bankers Association and the Community  Bankers  of  Illinois.
24    Members  of  the  advisory  committee  shall serve terms of 2
25    years from the date of their  designation.   Members  of  the
26    advisory  committee  shall  have  the  right  to  attend  all
27    meetings  of  the Board and participate in Board discussions,
28    but shall not have a vote.
29    (Source: P.A. 91-213, eff. 7-20-99.)

30        (240 ILCS 40/30-10)
31        Sec. 30-10.  Participants in the Fund.
32        (a)  A licensee  under  this  Code  is  subject  to  this
33    Article  and  shall collect and pay assessments into the Fund
 
HB1458 Enrolled            -86-      LRB093 03693 RCE 07393 b
 1    as provided in Section 5-30.
 2        (b)  Except  as  provided  in  subsection  (c)  of   this
 3    Section,  a  person engaged in the business of a grain dealer
 4    or warehouseman but not licensed under this  Code  shall  not
 5    participate  in  or  benefit  from the Fund and its claimants
 6    shall not receive proceeds from the Fund.
 7        (c)  Participation of federal warehousemen.
 8             (1)  A federal warehouseman may participate  in  the
 9        Fund.   If  a federal warehouseman chooses to participate
10        in the Fund, it shall to the extent permitted by  federal
11        law:
12                  (A)  pay assessments into the Fund;
13                  (B)  be  deemed  a  licensee and a warehouseman
14             under this Code;
15                  (C)  be subject to this Code; and
16                  (D)  execute a  cooperative  agreement  between
17             itself and the Department.
18             (2)  The  cooperative agreement shall, at a minimum,
19        provide each of the following to the extent permitted  by
20        federal law:
21                  (A)  Authorization for the Department to obtain
22             information    about    the   federal   warehouseman
23             including, but not limited to,  bushel  capacity  of
24             storage space, financial stability, and examinations
25             performed   by   employees   of  the  United  States
26             Department of Agriculture.
27                  (B)  That  the  federal  warehouseman   submits
28             itself  to  the  jurisdiction  of the Department and
29             that it agrees to be subject to and  bound  by  this
30             Code and deemed a licensee under this Code.
31                  (C)  That  in  the  event  of  a failure of the
32             federal  warehouseman,  the  Department  shall  have
33             authority to seize, liquidate, and collect upon  all
34             grain assets, collateral, and guarantees relating to
 
HB1458 Enrolled            -87-      LRB093 03693 RCE 07393 b
 1             the federal warehouseman as in the case of any other
 2             licensee.
 3                  (D)  Such  other requirements as established by
 4             rule.
 5             (3)  A federal warehouseman that participates in the
 6        Fund shall at a minimum meet the  licensing  requirements
 7        of  this Code and shall comply with all requirements of a
 8        licensee and a warehouseman under this Code to the extent
 9        permitted by federal law.
10        (d)  A federal warehouseman that participates in the Fund
11    or a warehouseman that desires to or  has  become  a  federal
12    warehouseman  cannot  withdraw from participation in the Fund
13    for the benefit of existing depositors until  the  occurrence
14    of all of the following:
15             (1)  Payment in full by the federal warehouseman or
16        withdrawing   warehouseman   of   all  assessments  under
17        subsection (a) of Section 5-30.
18             (2)  Payment in full by the federal warehouseman or
19        withdrawing warehouseman of  all  assessments  instituted
20        under  subsection  (d)  of  Section  5-30  on or after an
21        assessment determination date that occurs before  if  the
22        Fund  is  under  $3,000,000 at any time after the federal
23        warehouseman or  withdrawing  warehouseman  notifies  the
24        Department that it desires to withdraw from participation
25        in  the Fund and before the issuance by the Department of
26        a certificate of withdrawal from the Fund.
27             (3)  The expiration of 30 days following  the  later
28        of:
29                  (A)  the   date  the  federal  warehouseman  or
30             withdrawing warehouseman has  ceased  providing  its
31             depositors with coverage under the Fund;
32                  (B)  the   date  the  federal  warehouseman  or
33             withdrawing warehouseman has posted at each  of  its
34             locations  a  notice  stating  when  it  will  cease
 
HB1458 Enrolled            -88-      LRB093 03693 RCE 07393 b
 1             providing  its  depositors  with  coverage under the
 2             Fund;
 3                  (C)  notification of all potential claimants by
 4             the federal warehouseman or withdrawing warehouseman
 5             of the date on which it  will  cease  providing  its
 6             depositors with coverage under the Fund; and
 7                  (D)  Completion  of  an  audit  and examination
 8             satisfactory to the Department as  provided  for  in
 9             this   Code   and  by  rule,  which  is  to  be  the
10             Department's final examination.
11             (4)  Obtaining  releases  of  liability   from   all
12        existing   depositors  or  posting  collateral  with  the
13        Department for 270 days after withdrawing from  the  Fund
14        in   an   amount  equal  to  the  liability  to  existing
15        depositors who have  not  executed  releases  before  the
16        completion of the Department's final examination.
17             (5)  Compliance  with  all notification requirements
18        as provided for in this Code and by rule.
19             (6)  Issuance by the Department of a certificate  of
20        withdrawal from the Fund when the federal warehouseman or
21        withdrawing  warehouseman  has  met  all requirements for
22        withdrawal from participation in the Fund.
23        (e)  Before a federal warehouseman or a warehouseman that
24    desires to or has become a federal warehouseman may  withdraw
25    from  participation in the Fund, it must pay for an audit and
26    examination and must provide to the Department all names  and
27    addresses   of   potential  claimants  for  the  purposes  of
28    notification of withdrawal of participation in the Fund.
29    (Source: P.A. 89-287, eff. 1-1-96.)

30        (240 ILCS 40/30-25 new)
31        Sec. 30-25.  Grain Insurance Reserve Fund.  Upon  payment
32    in  full  of  all money that has been transferred to the Fund
33    prior to June 30, 2003  from  the  General  Revenue  Fund  as
 
HB1458 Enrolled            -89-      LRB093 03693 RCE 07393 b
 1    provided for under subsection (h) of Section 25-20, the State
 2    of  Illinois  shall remit $2,000,000 to the Corporation to be
 3    held in a separate and discrete account to  be  used  to  the
 4    extent  the  assets  in  the Fund are insufficient to satisfy
 5    claimants as payment of their claims become due as set  forth
 6    in  subsection  (h)  of  Section 25-20. The remittance of the
 7    $2,000,000 reserve shall be made to the Corporation within 60
 8    days of payment in full of all money transferred to the  Fund
 9    as set forth above in this Section 30-25. All income received
10    by  the Reserve Fund shall be deposited in the Fund within 35
11    days of the end of each calendar quarter.

12        (240 ILCS 40/Art. 35 heading new)
13                     ARTICLE 35. REGULATORY FUND

14        (240 ILCS 40/35-5 new)
15        Sec. 35-5.  Regulatory Fund.
16        (a)  The Regulatory Fund is created as a  trust  fund  in
17    the   State  Treasury.  The  Regulatory  Fund  shall  receive
18    license, certificate, and extension fees under Sections 5-10,
19    5-15, and 5-20 and funds  under  subsection  (g)  of  Section
20    25-20 and shall pay expenses as set forth in this Article 35.
21        (b)  Any  funds  received  by the Director under Sections
22    5-10, 5-15, and 5-20 and funds disbursed for deposit  to  the
23    Regulatory  Fund  under subsection (g) of Section 25-20 shall
24    be deposited with the Treasurer as ex officio  custodian  and
25    held  separate and apart from any public money of this State,
26    with interest accruing  on  moneys  in  the  Regulatory  Fund
27    deposited  into  the  Regulatory  Fund. Disbursement from the
28    Fund for expenses as set forth in this Article 35 shall be by
29    voucher ordered by the Director, accompanied by documentation
30    satisfactory to the Treasurer and the Comptroller  supporting
31    the   payment   warrant   drawn   by   the   Comptroller  and
32    countersigned by the Treasurer. Moneys in the Regulatory Fund
 
HB1458 Enrolled            -90-      LRB093 03693 RCE 07393 b
 1    shall not be subject to appropriation by the General Assembly
 2    but shall  be  subject  to  audit  by  the  Auditor  General.
 3    Interest  earned on moneys deposited into the Regulatory Fund
 4    shall be deposited into the Regulatory Fund.
 5        (c)  Fees  deposited  into  the  Regulatory  Fund   under
 6    Sections  5-10, 5-15, and 5-20 shall be expended only for the
 7    following program expenses of the Department;
 8             (1)  Implementation and monitoring  of  programs  of
 9        the  Department  solely  under  this  Code,  including an
10        electronic warehouse receipt program.
11             (2)  Employment or engagement  of  certified  public
12        accountants  to  assist  in  oversight  and regulation of
13        licensees in the course of an  intermediate  or  advanced
14        examination under Section 1-15.
15             (3)  Training  and  education of examiners and other
16        Department employees in reference to Department  programs
17        established  to  implement the Department's duties solely
18        under the Code.
19        (d)  Any  expenses  incurred   by   the   Department   in
20    performance  of its duties under Article 20 of the Code shall
21    be reimbursed to the Department out of the net  assets  of  a
22    liquidation  to  the extent available under subsection (q) of
23    Section 25-20 and shall be deposited into the Regulatory Fund
24    and shall be expended solely for program expenses  under  the
25    Code.

26        Section  99.  Effective date.  This Act takes effect upon
27    becoming law.