093_HB1458sam001

 










                                     LRB093 03693 BDD 17074 a

 1                    AMENDMENT TO HOUSE BILL 1458

 2        AMENDMENT NO.     .  Amend House Bill 1458  by  replacing
 3    everything after the enacting clause with the following:

 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
 
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 1    grain  dealer  or  licensed  warehouseman  and  to ensure the
 2    existence of an adequate resource  so  that  persons  holding
 3    valid  claims may be compensated for losses occasioned by the
 4    failure of a licensed grain dealer or licensed  warehouseman.
 5    To  that  end,  this  Code  shall  be liberally construed and
 6    liberally administered in favor of claimants.
 7        In addition, the  Illinois  grain  industry  comprises  a
 8    significant and vital part of the State's economy and as such
 9    can  function  to  its  fullest  competitive  and  profitable
10    potential,  thus  contributing to the economic health of this
11    State, when it operates under a  coordinated  and  integrated
12    regulatory structure. Thus, a further purpose of this Code is
13    to  provide a single system of governmental regulation of the
14    Illinois grain industry.
15    (Source: P.A. 89-287, eff. 1-1-96.)

16        (240 ILCS 40/1-10)
17        Sec. 1-10.  Definitions.  As used in this Act:
18        "Board" means the governing body of  the  Illinois  Grain
19    Insurance Corporation.
20        "Certificate"  means  a document, other than the license,
21    issued by the Department that certifies that a grain dealer's
22    license has been issued and is in effect.
23        "Claimant" means:
24        (a)  a person, including, without limitation, a lender:
25             (1)  who possesses warehouse receipts issued from an
26        Illinois location covering grain owned  or  stored  by  a
27        failed warehouseman; or
28             (2)  who  has  other  written  evidence of a storage
29        obligation  of  a  failed  warehouseman  issued  from  an
30        Illinois location in favor of the holder, including,  but
31        not  limited  to,  scale  tickets, settlement sheets, and
32        ledger cards; or
33             (3)  who has loaned money to a warehouseman and  was
 
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 1        to  receive  a  warehouse receipt issued from an Illinois
 2        location as  security  for  that  loan,  who  surrendered
 3        warehouse receipts as part of a grain sale at an Illinois
 4        location,  or who delivered grain out of storage with the
 5        warehouseman as part of  a  grain  sale  at  an  Illinois
 6        location; and
 7                  (i)  the  grain  dealer  or warehouseman failed
 8             within  21  days  after  the  loan  of  money,   the
 9             surrender  of warehouse receipts, or the delivery of
10             grain, as the case may be, and no warehouse  receipt
11             was  issued  or  payment in full was not made on the
12             grain sale, as the case may be; or
13                  (ii)  written notice was given by the person to
14             the Department within 21  days  after  the  loan  of
15             money,  the  surrender of warehouse receipts, or the
16             delivery of grain, as the case may be, stating  that
17             no  warehouse  receipt was issued or payment in full
18             made on the grain sale, as the case may be; or
19        (b)  a producer  not  included  in  item  (a)(3)  in  the
20    definition  of  "Claimant" who possesses evidence of the sale
21    at an Illinois location of grain delivered to a failed  grain
22    dealer,  or  its designee in Illinois and who was not paid in
23    full.
24        "Class  I  warehouseman"  means  a  warehouseman  who  is
25    authorized to issue negotiable and  non-negotiable  warehouse
26    receipts.
27        "Class  II  warehouseman"  means  a  warehouseman  who is
28    authorized to issue only non-negotiable warehouse receipts.
29        "Code" means this the Grain Code.
30        "Collateral" means:
31        (a)  irrevocable letters of credit;
32        (b)  certificates of deposit;
33        (c)  cash or a cash equivalent; or
34        (d)  any other property acceptable to the  Department  to
 
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 1    the  extent  there  exists  equity in that property.  For the
 2    purposes of this item (d), "equity" is the  amount  by  which
 3    the fair market value of the property exceeds the amount owed
 4    to  a  creditor  who  has  a valid, prior, perfected security
 5    interest in or other valid,  prior,  perfected  lien  on  the
 6    property.
 7        "Corporation"   means   the   Illinois   Grain  Insurance
 8    Corporation.
 9        "Daily  position  record"   means   a   grain   inventory
10    accountability  record  maintained  on  a  daily  basis  that
11    includes   an   accurate   reflection  of  changes  in  grain
12    inventory, storage obligations,  company-owned  inventory  by
13    commodity,  and  other  information  that  is required by the
14    Department.
15        "Daily grain transaction report" means a  record  of  the
16    daily  transactions  of  a grain dealer showing the amount of
17    all grain received and shipped during each day and the amount
18    on hand at the end of each day.
19        "Date of delivery of grain" means:
20        (a)  the date grain is delivered to a  grain  dealer,  or
21    its designee in Illinois, for the purpose of sale;
22        (b)  the  date  grain  is delivered to a warehouseman, or
23    its designee in Illinois for the purpose of storage; or
24        (c)  in  reference   to   grain   in   storage   with   a
25    warehouseman,  the  date  a  warehouse  receipt  representing
26    stored  grain  is  delivered  to  the issuer of the warehouse
27    receipt for the purpose of selling the stored grain or, if no
28    warehouse receipt was issued:
29             (1)  the date the purchase price for stored grain is
30        established; or
31             (2)  if sold by price later contract,  the  date  of
32        the price later contract.
33        "Department"    means    the   Illinois   Department   of
34    Agriculture.
 
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 1        "Depositor" means a person who has evidence of a  storage
 2    obligation from a warehouseman.
 3        "Director", unless otherwise provided, means the Illinois
 4    Director of Agriculture, or the Director's designee.
 5        "Electronic document" means a document that is generated,
 6    sent,  received,  or stored by electrical, digital, magnetic,
 7    optical  electromagnetic,  or  any   other   similar   means,
 8    including,  but  not limited to, electronic data interchange,
 9    electronic mail, telegram, telex, or telecopy.
10        "Electronic warehouse receipt" means a warehouse  receipt
11    that  is  issued  or transmitted in the form of an electronic
12    document.
13        "Emergency storage" means space measured in  bushels  and
14    used  for a period of time not to exceed 3 months for storage
15    of grain as a consequence of an emergency situation.
16        "Equity assets" means:
17        (a)  The equity in any property of the licensee or failed
18    licensee, other than grain assets.  For purposes of this item
19    (a):
20             (1)  "equity" is the amount by which the fair market
21        value of the  property  exceeds  the  amount  owed  to  a
22        creditor  who  has  a valid security interest in or other
23        valid lien on the property that was perfected before  the
24        date of failure of the licensee;
25             (2)  a  creditor  is  not  deemed  to  have  a valid
26        security interest or other valid lien on property if  (i)
27        the  property  can  be  directly traced as being from the
28        sale of grain by the licensee or  failed  licensee;  (ii)
29        the  security interest was taken as additional collateral
30        on account of an antecedent debt owed  to  the  creditor;
31        and  (iii)  the  security  interest  or  other  lien  was
32        perfected  (A)  on  or  within 90 days before the date of
33        failure of the licensee or (B) when  the  creditor  is  a
34        related person, within one year of the date of failure of
 
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 1        the licensee.
 2        "Failure" means, in reference to a licensee:
 3        (a)  a  formal declaration of insolvency;
 4        (b)  a revocation of a license;
 5        (c)  a  failure  to  apply  for  license renewal, leaving
 6    indebtedness to claimants;
 7        (d)  a denial of license renewal, leaving indebtedness to
 8    claimants; or
 9        (e)  a  voluntary  surrender  of   a   license,   leaving
10    indebtedness to claimants.
11        "Federal  warehouseman"  means a warehouseman licensed by
12    the  United  States  government  under  the   United   States
13    Warehouse Act (7 U.S.C. 241 et seq.).
14        "Fund" means the Illinois Grain Insurance Fund.
15        "Grain"  means  corn, soybeans, wheat, oats, rye, barley,
16    grain sorghum, canola, buckwheat, flaxseed, edible  soybeans,
17    and   other   like   agricultural  commodities  that  may  be
18    designated by rule.
19        "Grain assets" means:
20        (a)  all grain owned and all grain stored by  a  licensee
21    or  failed  licensee, wherever located, including redeposited
22    grain of a licensee or failed licensee;
23        (b)  (blank) redeposited grain of a  licensee  or  failed
24    licensee;
25        (c)  identifiable  proceeds,  including,  but not limited
26    to, insurance proceeds, received by or due to a  licensee  or
27    failed   licensee   resulting   from   the   sale,  exchange,
28    destruction, loss, or theft of grain, or other disposition of
29    grain by the licensee or failed licensee; or
30        (d)  assets in hedging  or  speculative  margin  accounts
31    held  by  commodity  or  security  exchanges  on  behalf of a
32    licensee or failed licensee and any moneys due or  to  become
33    due  to  a  licensee  or  failed  licensee,  less any secured
34    financing directly associated with those  assets  or  moneys,
 
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 1    from any transactions on those exchanges.
 2        For   purposes  of  this  Act,  storage  charges,  drying
 3    charges, price later  contract  service  charges,  and  other
 4    grain  service  charges  received  by or due to a licensee or
 5    failed licensee shall not be deemed to be grain  assets,  nor
 6    shall  such charges be deemed to be proceeds from the sale or
 7    other  disposition  of  grain  by  a  licensee  or  a  failed
 8    licensee, or to have been directly  or  indirectly  traceable
 9    from, to have resulted from, or to have been derived in whole
10    or  in  part from, or otherwise related to, the sale or other
11    disposition of grain by the licensee or failed licensee.
12        "Grain dealer" means a person  who  is  licensed  by  the
13    Department  to  engage  in  the business of buying grain from
14    producers.
15        "Grain Indemnity Trust Account"  means  a  trust  account
16    established  by  the  Director  under  Section 205-410 of the
17    Department of Agriculture Law (20 ILCS 205/205-410)  that  is
18    used for the receipt and disbursement of moneys paid from the
19    Fund and proceeds from the liquidation of and collection upon
20    grain assets, equity assets, collateral, and or guarantees of
21    or  relating  to failed licensees.  The Grain Indemnity Trust
22    Account shall be used to pay valid claims, authorized refunds
23    from  the  Fund,  and  expenses   incurred   in   preserving,
24    liquidating, and collecting upon grain assets, equity assets,
25    collateral, and guarantees relating to failed licensees.
26        "Guarantor" means a person who assumes all or part of the
27    obligations of a licensee to claimants.
28        "Guarantee"  means  a document executed by a guarantor by
29    which the guarantor assumes all or part of the obligations of
30    a licensee to claimants.
31        "Incidental  grain  dealer"  means  a  grain  dealer  who
32    purchases grain  only  in  connection  with  a  feed  milling
33    operation  and  whose total purchases of grain from producers
34    during the grain dealer's fiscal year do not exceed $100,000.
 
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 1        "Licensed  storage  capacity"  means  the  maximum  grain
 2    storage  capacity  measured  in  bushels  approved   by   the
 3    applicable licensing agency for use by a warehouseman.
 4        "Licensee"  means  a  grain dealer or warehouseman who is
 5    licensed by the Department and a federal warehouseman that is
 6    a participant in the Fund, under subsection  (c)  of  Section
 7    30-10.
 8        "Official  grain  standards"  means  the  official  grade
 9    designations  as  adopted  by the United States Department of
10    Agriculture under the United States Grain Standards  Act  and
11    regulations adopted under that Act (7 U.S.C. 71 et seq. and 7
12    CFR 810.201 et seq.).
13        "Permanent   storage  capacity"  means  the  capacity  of
14    permanent structures available for  storage  of  grain  on  a
15    regular and continuous basis, and measured in bushels.
16        "Person"  means  any individual or entity, including, but
17    not limited to,  a  sole  proprietorship,  a  partnership,  a
18    corporation,   a   cooperative,  an  association,  a  limited
19    liability company, an estate, or a trust, or  a  governmental
20    agency.
21        "Price  later  contract" means a written contract for the
22    sale of grain whereby any part of the purchase price  may  be
23    established  by  the  seller after delivery of the grain to a
24    grain dealer according to a pricing formula contained in  the
25    contract.   Title  to the grain passes to the grain dealer at
26    the time of delivery.  The precise form and the general terms
27    and conditions of the contract shall be established by rule.
28        "Producer" means the owner, tenant, or operator  of  land
29    who  has  an  interest  in  and  receives  all or part of the
30    proceeds from the sale of the grain produced on the land.
31        "Producer protection holding corporation" means a holding
32    corporation to receive, hold title to, and  liquidate  assets
33    of  or  relating  to  a  failed licensee, including assets in
34    reference to collateral or guarantees relating  to  a  failed
 
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 1    licensee.
 2        "Regulatory  Fund"  means  the fund created under Article
 3    35.
 4        "Related persons" means affiliates  of  a  licensee,  key
 5    persons  of a licensee, owners of a licensee, and persons who
 6    have control over a  licensee.   For  the  purposes  of  this
 7    definition:
 8             (a)  "Affiliate"  means  a  person who has direct or
 9        indirect control  of  a  licensee,  is  controlled  by  a
10        licensee, or is under common control with a licensee.
11             (b)  "Key  person"  means  an officer, a director, a
12        trustee, a partner, a proprietor, a manager,  a  managing
13        agent,  or  the  spouse  of  a licensee.  An officer or a
14        director  of  an  entity  organized  or  operating  as  a
15        cooperative, however, shall not be  considered  to  be  a
16        "key person".
17             (c)  "Owner"  means  the  holder of: over 10% of the
18        total combined voting power of a corporation or over  10%
19        of the total value of shares of all classes of stock of a
20        corporation;  over  a 10% interest in a partnership; over
21        10% of the value of a trust computed actuarially; or over
22        10% of the legal or  beneficial  interest  in  any  other
23        business,  association,  endeavor,  or  entity  that is a
24        licensee.  For purposes of computing these percentages, a
25        holder is deemed to own stock or  other  interests  in  a
26        business  entity  whether  the  ownership  is  direct  or
27        indirect.
28             (d)  "Control" means the power to exercise authority
29        over  or  direct the management or policies of a business
30        entity.
31             (e)  "Indirect" means an interest in a business held
32        by the holder not through the holder's actual holdings in
33        the  business,  but  through  the  holder's  holdings  in
34        another business or other businesses.
 
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 1             (f)  Notwithstanding any  other  provision  of  this
 2        Act, the term "related person" does not include a lender,
 3        secured  party,  or other lien holder solely by reason of
 4        the existence of the loan, security interest, or lien, or
 5        solely by reason of the lender, secured party,  or  other
 6        lien  holder  having  or  exercising  any right or remedy
 7        provided by law or by agreement  with  a  licensee  or  a
 8        failed licensee.
 9        "Reserve  Fund"  means a separate and discrete fund of up
10    to $2,000,000 held by the Corporation as set forth in Section
11    30-25.
12        "Successor agreement"  means  an  agreement  by  which  a
13    licensee  succeeds  to  the  grain  obligations  of  a former
14    licensee.
15        "Temporary storage space" means space measured in bushels
16    and used for 6 months or less  for  storage  of  grain  on  a
17    temporary  basis  due  to  a  need  for additional storage in
18    excess of permanent storage capacity.
19        "Trust account" means the Grain Indemnity Trust Account.
20        "Valid claim" means  a  request  for  payment  under  the
21    provisions  of  this Code claim, submitted by a claimant, the
22    whose amount and category of which have  been  determined  by
23    the  Department,  to  the  extent  that  determination is not
24    subject to further  administrative  review  or  appeal.  Each
25    grain  sale  transaction and each storage obligation shall be
26    considered a separate and discrete request for  payment  even
27    though  one  or more requests are contained on one claim form
28    or are filed with the Department in one document.
29        "Warehouse" means a building, structure, or enclosure  in
30    which  grain  is  stored  for  the  public  for compensation,
31    whether grain of different owners is  commingled  or  whether
32    identity of different lots of grain is preserved.
33        "Warehouse  receipt"  means  a receipt for the storage of
34    grain issued by a warehouseman.
 
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 1        "Warehouseman" means a person who is licensed:
 2             (a)  by the Department to engage in the business  of
 3        storing grain for compensation; or
 4             (b)  under  the  United States Warehouse Act but who
 5        participates in the Fund under subsection (c) of  Section
 6        30-10.
 7    (Source:  P.A.  91-213,  eff.  7-20-99;  91-239, eff. 1-1-00;
 8    92-16, eff. 6-28-01.)

 9        (240 ILCS 40/1-15)
10        Sec. 1-15.  Powers and duties of Director.  The  Director
11    has  all powers necessary and proper to fully and effectively
12    execute the provisions of this Code and has the general  duty
13    to  implement  this  Code.   The Director's powers and duties
14    include, but are not limited to, the following:
15        (1)  The Director may, upon application, issue or  refuse
16    to  issue  licenses  under  this  Code,  and the Director may
17    extend,  renew,  reinstate,  suspend,   revoke,   or   accept
18    voluntary surrender of licenses under this Code.
19        (2)  The Director shall examine and inspect each licensee
20    at least once each calendar year. The examination shall cover
21    all   aspects  of  the  grain  operations  of  the  licensee,
22    including but not necessarily limited to options  trades  and
23    programs and farmer marketing programs.
24        The   Department   shall   perform  one  of  3  types  of
25    examinations of licensees.
26             (A) Basic Examination. The basic  examination  shall
27        be  performed when the licensee's merchandising and trade
28        practices  involve  minimal  market  risk,  which   might
29        include  those situations in which the licensee uses cash
30        back-to-back  contracts,  traditional  hedges  with   the
31        Chicago  Board  of  Trade, and price later contracts. The
32        specific  components  and   guidelines   of   the   basic
33        examination are to be as provided by rule, but shall at a
 
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 1        minimum   include   verification  of  grain  quality  and
 2        quantity,   reconciliation   of   records   with    grain
 3        transactions, computation of current ratios, and checking
 4        of posting procedures for accuracy.
 5             (B)  Intermediate   Examination.   The  intermediate
 6        examination  shall  be  performed  when  the   licensee's
 7        merchandising  and  trade  practices involve an increased
 8        amount of risk, which might include those  situations  in
 9        which   the   licensee   uses  guaranteed  minimum  price
10        contracts, purchases options,  or  writes  options.  This
11        examination  shall  include all those things performed as
12        part of the basic examination. In addition, the  specific
13        components and guidelines of the intermediate examination
14        are  to  be  as  provided by rule, but shall at a minimum
15        include  verification  of  grain  quality  and  quantity,
16        reconciliation of records with  grain  transactions,  and
17        checking of posting procedures for accuracy.
18             (C)  Advanced  Examination. The advanced examination
19        shall be performed when the licensee's merchandising  and
20        grain  trading  practices  involve  the  most risk, which
21        might include those situations in which the licensee  has
22        discretionary  trading  authority  from  producers,  uses
23        premium  offer  type  contracts,  or  has  contracts with
24        producers  that   cover   multiple   crop   years.   This
25        examination  shall  include all those things performed as
26        part  of  the  basic  examination  and  the  intermediate
27        examination. In addition,  the  specific  components  and
28        guidelines of the advanced examination are to be provided
29        by rule, but shall at a minimum include grain market risk
30        evaluation   and   appropriate  levels  thereof  for  the
31        licensee and adequacy of internal controls.
32        Using these guidelines, the  Department  shall  determine
33    the  level  of examination to be applied to each licensee. In
34    addition, the Department may, in its sole discretion,  engage
 
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 1    the  services  of  accounting  experts, grain risk management
 2    experts, or both as part  of  any  intermediate  or  advanced
 3    examination.   The Regulatory Fund may be used as a source of
 4    payment for the services of accounting  experts,  grain  risk
 5    management experts, or both.
 6        The  Director may inspect the premises used by a licensee
 7    at any time.  The books, accounts, records, and papers  of  a
 8    licensee  are  at  all times during business hours subject to
 9    inspection by  the  Director.   Each  licensee  may  also  be
10    required  to make reports of its activities, obligations, and
11    transactions that are deemed necessary  by  the  Director  to
12    determine  whether the interests of producers and the holders
13    of  warehouse   receipts   are   adequately   protected   and
14    safeguarded.   The  Director  may take action or issue orders
15    that in the opinion of the Director are necessary to  prevent
16    fraud  upon or discrimination against producers or depositors
17    of grain by a licensee.  The  sole  and  exclusive  means  of
18    halting the warehouse and grain dealer business activities of
19    a  licensee, however, are set forth in Section 15-40 relating
20    to suspension and revocation of licenses.
21        (3)  The Director may, upon his or her initiative or upon
22    the written verified complaint of any  person  setting  forth
23    facts  that  if proved would constitute grounds for a refusal
24    to issue or renew a license or for a suspension or revocation
25    of a license, investigate the actions of any person  applying
26    for,  holding,  or  claiming to hold a license or any related
27    party of that person.
28        (4)  The Director (but not the Director's  designee)  may
29    issue  subpoenas  and  bring before the Department any person
30    and take testimony either at an administrative hearing or  by
31    deposition with witness fees and mileage fees and in the same
32    manner  as  prescribed  in  the Code of Civil Procedure.  The
33    Director or the Director's designee may administer  oaths  to
34    witnesses at any proceeding that the Department is authorized
 
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 1    by  law  to  conduct.   The  Director (but not the Director's
 2    designee) may issue subpoenas  duces  tecum  to  command  the
 3    production  of  records  relating  to  a licensee, guarantor,
 4    related business, related person, or related party. Subpoenas
 5    are subject to the rules of the Department.
 6        (5)  Notwithstanding   other   judicial   remedies,   the
 7    Director may file a  complaint  and  apply  for  a  temporary
 8    restraining  order  or  preliminary  or  permanent injunction
 9    restraining  or  enjoining  any  person  from  violating   or
10    continuing to violate this Code or its rules.
11        (6)  The  Director  shall  act  as  Trustee for the Trust
12    Account, act as  Trustee  over  all  collateral,  guarantees,
13    grain  assets,  and  equity assets held by the Department for
14    the benefit of claimants, and  exercise  certain  powers  and
15    perform  related  duties  under Section 20-5 of this Code and
16    Section 205-410 of the Department of Agriculture Law (20 ILCS
17    205/205-410), except that the provisions  of  the  Trust  and
18    Trustees  Act  do not apply to the Trust Account or any other
19    trust created under this Code.
20        (7)  The Director shall personally serve as president  of
21    the Corporation.
22        (8)  The  Director shall collect and deposit all monetary
23    penalties, printer registration fees, funds, and  assessments
24    authorized under this Code into the Fund.
25        (9)  The  Director  may  initiate any action necessary to
26    pay refunds from the Fund. The Director may initiate  refunds
27    for  errors  of  assessments  that  do  not exceed $2,000 per
28    licensee, lender, or grain seller  without  authorization  by
29    the Board.
30        (10)  The  Director  shall maintain a holding corporation
31    to receive,  hold  title  to,  and  liquidate  assets  of  or
32    relating  to a failed licensee, including assets in reference
33    to collateral or guarantees, and deposit  the  proceeds  into
34    the Fund.
 
                            -15-     LRB093 03693 BDD 17074 a
 1        (11)  The  Director  may  initiate,  participate  in,  or
 2    withdraw  from  any proceedings to liquidate and collect upon
 3    grain  assets,  equity  assets,  collateral,  and  guarantees
 4    relating to a failed licensee, including, but not limited to,
 5    all powers needed to carry  out  the  provisions  of  Section
 6    20-15.
 7        (12)  The Director, as Trustee or otherwise, may take any
 8    action  that may be reasonable or appropriate to enforce this
 9    Code and its rules.
10    (Source: P.A. 91-213,  eff.  7-20-99;  91-239,  eff.  1-1-00;
11    92-16, eff. 6-28-01.)

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

24        (240 ILCS 40/1-25)
25        Sec.  1-25.   Rules.  The Department may promulgate rules
26    that are necessary for the implementation and  administration
27    of this Code.
28        The  Department  shall  adopt  rules governing electronic
29    systems under which  electronic  warehouse  receipts  may  be
30    issued  and  transferred.  Licensees  shall  not be required,
31    however, to issue or use electronic warehouse receipts. These
32    rules shall be adopted after the United States Department  of
 
                            -16-     LRB093 03693 BDD 17074 a
 1    Agriculture   adopts  regulations  concerning  an  electronic
 2    receipt transfer system pursuant to 7 U.S.C. 242, 250.
 3    (Source: P.A. 89-287, eff. 1-1-96.)

 4        (240 ILCS 40/5-5)
 5        Sec. 5-5.   Licenses required; applications; exemptions.
 6        (a)  Except as provided in subsection (e), a  person  may
 7    not engage in the business of buying grain from producers, or
 8    storing  grain  for  compensation,  as  a  grain  dealer,  an
 9    incidental  grain  dealer,  or a warehouseman in the State of
10    Illinois without a license issued by the  Department,  or  in
11    the  case  of  a  federal  warehouseman, by the United States
12    government.
13        (b)  An application for a license shall be filed with the
14    Department, shall be in a form prescribed by the  Department,
15    and  shall set forth the name of the applicant, the directors
16    and officers if the applicant is a corporation, the  partners
17    if  the  applicant  is  a  partnership,  the  members  of the
18    governing body and all persons with management or supervisory
19    authority  if  the  applicant  is  an  entity  other  than  a
20    corporation or partnership, the  location  of  the  principal
21    office or place of business of the applicant, the location of
22    the principal office or place of business of the applicant in
23    Illinois,  and the location or locations in Illinois at which
24    the applicant proposes to engage in business as  a  licensee,
25    the  fiscal year of the applicant, the kind of grain that the
26    applicant proposes to buy, handle,  or  store,  the  type  of
27    business   that   the  applicant  proposes  to  conduct,  and
28    additional information that the  Department  may  require  by
29    rule.
30        (c)  The  application  for  a  warehouseman  shall  state
31    whether the applicant proposes to store grain only for others
32    or  for the applicant and for others and shall also state the
33    storage capacity  for  which  the  applicant  desires  to  be
 
                            -17-     LRB093 03693 BDD 17074 a
 1    licensed.
 2        (d)  If  an  applicant  has been engaged in business as a
 3    grain dealer for one year  or  more,  the  application  shall
 4    state the aggregate dollar amount paid to producers for grain
 5    during  the  applicant's  last completed fiscal year.  If the
 6    applicant has been engaged in business for less than one year
 7    or has not engaged in  the  business  of  buying  grain  from
 8    producers  as a grain dealer, the application shall state the
 9    estimated aggregate dollar amount to be paid by the applicant
10    to producers for grain purchased from  producers  during  the
11    applicant's first fiscal year.
12        (e)  The following persons are exempt from being licensed
13    as a grain dealer or incidental grain dealer:
14             (1)  A  person  purchasing grain from producers only
15        for resale as agricultural seed.
16             (2)  A producer purchasing grain from producers only
17        for its own use as seed or feed.
18    (Source: P.A. 89-287, eff. 1-1-96.)

19        (240 ILCS 40/5-10)
20        Sec. 5-10.  Financial statement and fee  requirements  to
21    obtain or amend a license.
22        (a)  Applications for a new license to operate as a Class
23    I  warehouseman  or grain dealer shall be accompanied by each
24    of the following:
25             (1)  A financial statement made within 90 days after
26        the  applicant's  fiscal  year  end   and   prepared   in
27        conformity  with generally accepted accounting principles
28        following an examination  conducted  in  accordance  with
29        generally  accepted  auditing standards that has attached
30        the unqualified opinion, or a qualified  opinion  if  the
31        qualification,  in the sole discretion of the Department,
32        does not unduly diminish the financial stability  of  the
33        licensee  or  applicant, , or other opinion acceptable to
 
                            -18-     LRB093 03693 BDD 17074 a
 1        the  Department,  of  an  independent  certified   public
 2        accountant  licensed  under  Illinois  law  or  an entity
 3        permitted to engage in the practice of public  accounting
 4        under  item  (b)(3)  of Section 14 of the Illinois Public
 5        Accounting Act.
 6                  (A)  If  the  applicant  has  been  engaged  in
 7             business prior to  the  application,  the  financial
 8             statement shall set forth the financial position and
 9             results  in  operations  for  the most recent fiscal
10             year of  the  applicant.   The  financial  statement
11             shall  consist  of  a  balance  sheet,  statement of
12             income, statement of retained earnings, statement of
13             cash flows, notes to financial statements, and other
14             information as required by the Department.
15                  (B)  If the applicant has not been  engaged  in
16             business  prior  to  the  application, the financial
17             statement shall consist of a balance sheet, notes to
18             financial  statements,  and  other  information   as
19             required by the Department.
20             (2)  An  application  fee  of  $200  $100  for  each
21        license,  $100  of  which  shall  be  deposited  into the
22        General Revenue Fund and the balance of  which  shall  be
23        deposited into the Regulatory Fund.
24             (3)  A  fee  for  each  required  certificate.   The
25        amount   of   the  fee  for  each  certificate  shall  be
26        established by rule.  Fees shall be  deposited  into  the
27        Regulatory Fund.
28        (b)  Applications for a new license to operate as a Class
29    II   warehouseman   or   incidental  grain  dealer  shall  be
30    accompanied by:
31             (1)  A financial statement  prepared  in  accordance
32        with  the requirements of item (a)(1) of Section 5-10 or,
33        instead, a financial statement made within 90 days of the
34        date of the  application  prepared  or  certified  by  an
 
                            -19-     LRB093 03693 BDD 17074 a
 1        independent  accountant  and  verified  under oath by the
 2        applicant.  The financial statement shall set  forth  the
 3        balance  sheet  and other information with respect to the
 4        financial resources of the applicant that the  Department
 5        may  require.   If  the  applicant  has  been  engaged in
 6        business  prior  to  the   application,   the   financial
 7        statement  shall  also set forth a statement of income of
 8        the applicant.
 9             (2)  An  application  fee  of  $150  $100  for  each
10        license, $100  of  which  shall  be  deposited  into  the
11        General  Revenue  Fund  and the balance of which shall be
12        deposited into the Regulatory Fund.
13             (3)  A  fee  for  each  required  certificate.   The
14        amount  of  the  fee  for  each  certificate   shall   be
15        established  by  rule.   Fees shall be deposited into the
16        Regulatory Fund.
17        (c)  Applications  to  amend  a  warehouseman's  licensed
18    storage capacity,  including  applications  in  reference  to
19    temporary storage and emergency storage or to otherwise amend
20    a  license, shall be accompanied by a filing fee of $100, $50
21    of which shall be deposited into the General Revenue Fund and
22    the balance of which shall be deposited into  the  Regulatory
23    Fund $50.
24    (Source: P.A. 89-287, eff. 1-1-96.)

25        (240 ILCS 40/5-15)
26        Sec. 5-15.  Renewal of license.
27        (a)  The  application  for  renewal of a license shall be
28    filed with the Department annually within 90 days  after  the
29    licensee's fiscal year end.  The Department may, upon request
30    of the licensee, payment of an extension fee of $100 $50, $50
31    of which shall be deposited into the General Revenue Fund and
32    the  balance  of which shall be deposited into the Regulatory
33    Fund,  and  delivery  to  the  Department  of  a  preliminary
 
                            -20-     LRB093 03693 BDD 17074 a
 1    financial  statement  compiled  reviewed  by  an  independent
 2    certified public accountant licensed under Illinois law or an
 3    entity  permitted  to  engage  in  the  practice  of   public
 4    accounting  under  item  (b)(3) of Section 14 of the Illinois
 5    Public  Accounting  Act  or,  in  the  case  of  a  Class  II
 6    warehouseman  or  incidental  grain  dealer,  a   preliminary
 7    financial  statement  reviewed  by  an independent accountant
 8    that meets the financial requirements of  subsection  (b)  of
 9    Section  5-25,  extend,  for up to but not exceeding 30 days,
10    the period of time during which the application  for  renewal
11    of  a  license  may  be  filed.  The Department, however, may
12    provide by  rule  for  reducing  the  filing  period  for  an
13    application  for renewal of a license to no less than 60 days
14    after the  licensee's  fiscal  year  end  if  the  Department
15    determines  that  an applicant has financial deficiencies, or
16    there are other factors, that would create a substantial risk
17    of failure loss to potential claimants.  The Department  must
18    give  written  notice  of  the  reduced  filing period to the
19    licensee at least 60 days before the earlier deadline imposed
20    by the Department to file the application for  renewal  of  a
21    license.   Notice  is  deemed  given when mailed by certified
22    mail, return receipt requested, properly addressed  and  with
23    sufficient postage attached.
24        (b)  The  application for renewal shall be accompanied by
25    the financial statement required by Section 5-20.
26        (c)  Failure to meet all of the conditions to  renew  the
27    license may result in a denial of renewal of the license. The
28    licensee may request an administrative hearing to dispute the
29    denial  of  renewal,  after which the Director shall enter an
30    order either renewing or refusing to renew the license.
31    (Source: P.A. 89-287, eff. 1-1-96.)

32        (240 ILCS 40/5-20)
33        Sec. 5-20.  Financial statement and fee requirements  for
 
                            -21-     LRB093 03693 BDD 17074 a
 1    the renewal of a license.
 2        (a)  Applications  for  a renewal of a license to operate
 3    as  a  Class  I  warehouseman  or  grain  dealer   shall   be
 4    accompanied by each of the following:
 5             (1)  A financial statement made within 90 days after
 6        the   applicant's   fiscal   year  end  and  prepared  in
 7        conformity with generally accepted accounting  principles
 8        following  an  examination  conducted  in accordance with
 9        generally accepted auditing standards that  has  attached
10        the  unqualified  opinion,  or a qualified opinion if the
11        qualification, in the sole discretion of the  Department,
12        does  not  unduly diminish the financial stability of the
13        licensee or applicant, , or other opinion  acceptable  to
14        the   Department,  of  an  independent  certified  public
15        accountant licensed  under  Illinois  law  or  an  entity
16        permitted  to engage in the practice of public accounting
17        under item (b)(3) of Section 14 of  the  Illinois  Public
18        Accounting Act.  The financial statement shall consist of
19        a  balance  sheet,  statement  of  income,  statement  of
20        retained  earnings,  statement  of  cash  flows, notes to
21        financial statements, and other information  as  required
22        by  the  Department.   The  financial statement shall set
23        forth the financial position and  results  in  operations
24        for the most recent fiscal year of the applicant.
25             (2)  A  fee  of  $200 $100 for each license, $100 of
26        which shall be deposited into the  General  Revenue  Fund
27        and  the  balance  of  which  shall be deposited into the
28        Regulatory Fund.
29             (3)  A  fee  for  each  required  certificate.   The
30        amount  of  the  fee  for  each  certificate   shall   be
31        established  by  rule.   Fees shall be deposited into the
32        Regulatory Fund.
33        (b)  Applications for a renewal of a license  to  operate
34    as  a  Class II warehouseman or incidental grain dealer shall
 
                            -22-     LRB093 03693 BDD 17074 a
 1    be accompanied by each of the following:
 2             (1)  A financial statement  prepared  in  accordance
 3        with  the requirements of item (a)(1) of Section 5-10 or,
 4        instead, a financial statement made within 90 days  after
 5        the  date  of the application prepared or certified by an
 6        independent accountant and verified  under  oath  by  the
 7        applicant.   The  financial statement shall set forth the
 8        balance sheet and statement of income  of  the  applicant
 9        and  other  information  with  respect  to  the financial
10        resources  of  the  applicant  that  the  Department  may
11        require.
12             (2)  A fee of $150 $100 for each  license,  $100  of
13        which  shall  be  deposited into the General Revenue Fund
14        and the balance of which  shall  be  deposited  into  the
15        Regulatory Fund.
16             (3)  A  fee  for  each  required  certificate.   The
17        amount   of   the  fee  for  each  certificate  shall  be
18        established by rule.  Fees shall be  deposited  into  the
19        Regulatory Fund.
20    (Source: P.A. 89-287, eff. 1-1-96.)

21        (240 ILCS 40/5-25)
22        Sec.  5-25.   Licensing  standards and requirements.  The
23    Department shall issue, amend, or  renew  a  license  if  the
24    Department  is satisfied that the applicant or licensee meets
25    the  standards  and  requirements  of  this   Section.    The
26    standards and requirements of subsections (a) and (b) of this
27    Section  must  be  observed  and  complied  with at all times
28    during the term of the license.
29        (a)  General requirements.
30             (1)  The applicant or  licensee  must  have  a  good
31        business  reputation,  have not been involved in improper
32        manipulation of  books  and  records  or  other  improper
33        business  practices,  and  have  the  qualifications  and
 
                            -23-     LRB093 03693 BDD 17074 a
 1        background essential for the conduct of the business of a
 2        licensee.   The  Department  must  be satisfied as to the
 3        business reputation, background,  and  qualifications  of
 4        the management and principal officers of the applicant or
 5        licensee.    The Department may obtain criminal histories
 6        of management and principal officers of the applicant  or
 7        licensee.
 8             (2)  The  applicant  or  licensee  must  maintain  a
 9        permanent business location in the State of Illinois.  At
10        Each location where the licensee is transacting business,
11        that  place  of  business shall remain open from at least
12        one-half hour  before  the  daily  opening  to  at  least
13        one-half  hour  after  the  daily  closing of the Chicago
14        Board  of  Trade,  unless  otherwise  approved   by   the
15        Department.
16             (3)  The  applicant  or licensee must have insurance
17        on all grain in its possession or custody as required  in
18        this Code.
19             (4)  The  applicant  or  licensee shall at all times
20        keep sufficiently detailed books and records  to  reflect
21        compliance  with  all   requirements  of  this  Code. The
22        Department  may  require  that  certain  records  located
23        outside the State of Illinois, if any, be  brought  to  a
24        specified   location   in  Illinois  for  review  by  the
25        Department.
26             (5)  The applicant  or  licensee  and  each  of  its
27        officers, directors, partners, and managers must not have
28        been  found  guilty of a criminal violation of this Code,
29        any of  its  predecessor  statutes,  or  any  similar  or
30        related  statute or law of the United States or any other
31        state or jurisdiction within 10 3 years of  the  date  of
32        application for the issuance or renewal of a license.
33             (6)  The  applicant  or  licensee  and  each  of its
34        officers, directors, managers, and partners, that at  any
 
                            -24-     LRB093 03693 BDD 17074 a
 1        one  time  have been a licensee under this Code or any of
 2        its predecessor statutes, or licensed under  any  similar
 3        or  related  statute  or  law of the United States or any
 4        other state  or  jurisdiction,  must  not  have  had  its
 5        license  terminated  or revoked by the Department, by the
 6        United States, or by any  other  state  or  jurisdiction,
 7        within  2  years  of  the  date  of  application  for the
 8        issuance or renewal  of  a  license  leaving  unsatisfied
 9        indebtedness to claimants.
10             (7)  The  applicant  or  licensee  and  each  of its
11        officers, directors, managers, and partners must not have
12        been an officer,  director,  manager,  or  partner  of  a
13        former licensee under this Code or any of its predecessor
14        statutes,  or  of  a business formerly licensed under any
15        similar or related statute or law of the United States or
16        any other state or jurisdiction,  that  had  its  license
17        terminated  or  revoked  by the Department, by the United
18        States, or by any other state or jurisdiction,  within  2
19        years  of  the  date  of  application for the issuance or
20        renewal of a license, leaving unsatisfied indebtedness to
21        claimants, unless  the  applicant  or  licensee  makes  a
22        sufficient  showing to the Department that the applicable
23        person  or  related  party   was   not   materially   and
24        substantially  involved  as  a  principal in the business
25        that had its license terminated or revoked.   An  interim
26        or  temporary  manager  that is employed by a licensee to
27        reorganize the licensee or to manage the  licensee  until
28        its  business  is sold, transferred, or liquidated is not
29        in violation of this subsection  (7)  solely  because  of
30        that employment as an interim or temporary manager.
31        (b)  Financial requirements.
32             (1)  The applicant or licensee's financial statement
33        must  show  a current ratio of the total adjusted current
34        assets to the total adjusted current  liabilities  of  at
 
                            -25-     LRB093 03693 BDD 17074 a
 1        least one to one.
 2                  (A)  Adjusted    current    assets   shall   be
 3             calculated by  deducting  from  the  stated  current
 4             assets  shown  on the balance sheet submitted by the
 5             applicant  or  licensee  any   current   asset,   as
 6             calculated  in  item  (B)  of  this subdivision (1),
 7             resulting  from  notes  receivable  from     related
 8             persons,  accounts  receivable from related persons,
 9             stock  subscriptions  receivable,  and   any   other
10             related person receivables.
11                  (B)  A disallowed current asset shall be netted
12             against any related liability and the net result, if
13             an  asset,  shall  be  subtracted  from  the current
14             assets.
15             (2)  The applicant or licensee's financial statement
16        and balance sheet must show an adjusted debt to  adjusted
17        equity ratio of not more than 3 to one.
18                  (A)  Adjusted   debt  shall  be  calculated  by
19             totaling  current  and  long-term  liabilities   and
20             reducing  the total liabilities, up to the amount of
21             current liabilities, by the liquid assets  appearing
22             in  the  current  asset section of the balance sheet
23             submitted by the applicant  or  licensee.   For  the
24             purposes  of this Section, liquid assets include but
25             are not limited to cash, depository accounts, direct
26             obligations  of  the  U.S.  Government,   marketable
27             securities,   grain   assets,   balances  in  margin
28             accounts, and tax refunds.
29                  (B)  Adjusted equity  shall  be  calculated  by
30             deducting  from  the  stated  net worth shown on the
31             balance sheet submitted by the applicant or licensee
32             any  asset,  as  calculated  in  item  (C)  of  this
33             subdivision (2),  resulting  from  notes  receivable
34             from   related  persons,  accounts  receivable  from
 
                            -26-     LRB093 03693 BDD 17074 a
 1             related persons, stock subscriptions receivable,  or
 2             any other related person receivables.
 3                  (C)  A disallowed asset shall be netted against
 4             any  related  liability  and  the  net result, if an
 5             asset, shall  be  subtracted  from  the  stated  net
 6             worth,   or   if  a  liability  it  shall  remain  a
 7             liability.
 8             (3)  An applicant or licensee must have an  adjusted
 9        equity  of  at  least $50,000 as determined by the method
10        specified in item (b)(2) of this Section. Beginning  with
11        the  first  fiscal  year of a licensee ending after 2004,
12        the adjusted equity, as defined by the  method  specified
13        in  item  (b)(2)  of  this Section, shall be increased by
14        $10,000 per fiscal year until the adjusted equity  of  an
15        applicant or licensee is at least $100,000.
16             (4)  For   the   purposes  of  this  Section,  notes
17        receivable from related persons, accounts receivable from
18        related persons, and any other related person receivables
19        are not a disallowed asset if the related person is  also
20        a licensee and meets all of the financial requirements of
21        this Code.
22             (5)  An  applicant  for  a  new license shall not be
23        permitted to  collateralize  the  requirements  of  items
24        (b)(1) and (b)(3) of this Section in order to satisfy the
25        requirements for a new license.
26    (Source: P.A. 89-287, eff. 1-1-96.)

27        (240 ILCS 40/5-30)
28        Sec.  5-30.    Grain  Insurance  Fund  assessments.   The
29    Illinois   Grain   Insurance   Fund   is   established  as  a
30    continuation of the fund created  under  the  Illinois  Grain
31    Insurance  Act, now repealed. Licensees, and applicants for a
32    new license, first sellers  of  grain  to  grain  dealers  at
33    Illinois   locations,  and  lenders  to  licensee  shall  pay
 
                            -27-     LRB093 03693 BDD 17074 a
 1    assessments as set forth in this Section.
 2        (a)  Subject  to  subsection  (e)  of  this  Section,   a
 3    licensee  that  is newly licensed after the effective date of
 4    this Code shall  pay  an  assessment  into  the  Fund  for  3
 5    consecutive  years.   These  assessments  are known as "newly
 6    licensed assessments".  Except as provided  in  item  (6)  of
 7    subsection   (b)  of  this  Section,  the  first  installment
 8    assessment shall be  paid  at  the  time  of  or  before  the
 9    issuance  of a new license, the second installment assessment
10    shall be paid on or before the first anniversary date of  the
11    issuance  of  the  new  license,  and  the  third installment
12    assessment shall be paid on or before the second  anniversary
13    date of the issuance of the new license.  For a grain dealer,
14    the initial payment of each of the 3 installments assessments
15    shall  be  based  upon  the  total  estimated  value of grain
16    purchases by the grain dealer for the  applicable  year  with
17    the  final  installment  assessment  amount determined as set
18    forth in item (6) of subsection (b) of this  Section.   After
19    the  licensee  has  paid  or  was  required to pay the last 3
20    installments  of  the  newly  licensed  assessments  first  3
21    assessments to the Department for payment into the Fund,  the
22    licensee  shall  be  subject to subsequent assessments as set
23    forth in subsection (d) of this Section.
24        (b)  Grain dealer newly licensed assessments.
25             (1)  The first installment assessment  for  a  grain
26        dealer shall be an amount equal to:
27                  (A)  $0.000145 multiplied by the total value of
28             grain  purchases for the grain dealer's first fiscal
29             year as shown in the final financial  statement  for
30             that  year  provided to the Department under Section
31             5-20; and
32                  (B)  $0.000255 multiplied by  that  portion  of
33             the  value of grain purchases for the grain dealer's
34             first fiscal year that  exceeds the adjusted  equity
 
                            -28-     LRB093 03693 BDD 17074 a
 1             of  the  licensee  multiplied by 20, as shown on the
 2             final financial statement for the  licensee's  first
 3             fiscal year provided to the Department under Section
 4             5-20.
 5             (2)  The  minimum  amount  assessment  for the first
 6        installment assessment  shall  be  $500  $1,000  and  the
 7        maximum shall be $15,000 $10,000.
 8             (3)  The  second  installment assessment for a grain
 9        dealer shall be an amount equal to:
10                  (A)  $0.0000725 multiplied by the  total  value
11             of  grain  purchases  for  the grain dealer's second
12             fiscal  year  as  shown  in  the   final   financial
13             statement  for  that year provided to the Department
14             under Section 5-20; and
15                  (B)  $0.0001275 multiplied by that  portion  of
16             the  value of grain purchases for the grain dealer's
17             second fiscal year that exceeds the adjusted  equity
18             of  the  licensee  multiplied by 20, as shown on the
19             final financial statement for the licensee's  second
20             fiscal year provided to the Department under Section
21             5-20.
22             (4)  The  third  installment  assessment for a grain
23        dealer shall be an amount equal to:
24                  (A)  $0.0000725 multiplied by the  total  value
25             of  grain  purchases  for  the  grain dealer's third
26             fiscal  year  as  shown  in  the   final   financial
27             statement  for  that year provided to the Department
28             under Section 5-20; and
29                  (B)  $0.0001275 multiplied by that  portion  of
30             the  value of grain purchases for the grain dealer's
31             third fiscal year that exceeds the  adjusted  equity
32             of  the  licensee  multiplied by 20, as shown on the
33             final financial statement for the  licensee's  third
34             fiscal year.
 
                            -29-     LRB093 03693 BDD 17074 a
 1             (5)  The  minimum  amount  of  the  second and third
 2        installments assessments shall be $250 $500 per year  and
 3        the maximum for each year shall be $7,500 $5,000.
 4             (6)  Each  of the newly licensed first 3 assessments
 5        shall be adjusted up or down based upon the actual annual
 6        grain purchases for each  year  as  shown  in  the  final
 7        financial   statement  for  that  year  provided  to  the
 8        Department under Section 5-20.  The adjustments shall  be
 9        determined  by  the Department within 30 days of the date
10        of approval of renewal of a  license.  Refunds  shall  be
11        paid   out   of   the  Fund  within  60  days  after  the
12        Department's determination.  Additional amounts owed  for
13        any  installment assessments shall be paid within 30 days
14        after notification  by  the  Department  as  provided  in
15        subsection (f) of this Section.
16             (7)  For the purposes of grain dealer newly licensed
17        assessments  under  subsection  (b)  of this Section, the
18        total value of grain purchases shall be the  total  value
19        of  first time grain purchases by Illinois locations from
20        producers.
21             (8)  The second and third installments shall be paid
22        to the Department within 60 days after the date posted on
23        the written notice of assessment.  The  Department  shall
24        immediately deposit all paid installments into the Fund.
25        (c)  Warehouseman newly licensed assessments.
26             (1)  The  first  assessment for a warehouseman shall
27        be an amount equal to:
28                  (A)  $0.00085 multiplied by the total permanent
29             storage capacity of the warehouseman at the time  of
30             license issuance; and
31                  (B)  $0.00099 multiplied by that portion of the
32             permanent  storage  capacity  of the warehouseman at
33             the  time  of  license  issuance  that  exceeds  the
34             adjusted equity of the licensee multiplied by 5, all
 
                            -30-     LRB093 03693 BDD 17074 a
 1             as shown on the final financial  statement  for  the
 2             licensee  provided  to  the Department under Section
 3             5-10.
 4             (2)  The minimum amount  assessment  for  the  first
 5        installment  assessment  shall  be  $500  $1,000  and the
 6        maximum shall be $15,000 $10,000.
 7             (3)  The second and third  installments  assessments
 8        shall be an amount equal to:
 9                  (A)  $0.000425    multiplied   by   the   total
10             permanent storage capacity of  the  warehouseman  at
11             the time of license issuance; and
12                  (B)  $0.000495  multiplied  by  that portion of
13             the  permanent  licensed  storage  capacity  of  the
14             warehouseman at the time of  license  issuance  that
15             exceeds   the   adjusted   equity  of  the  licensee
16             multiplied by 5, as shown  on  the  final  financial
17             statement  for  the licensee's last completed fiscal
18             year provided to the Department under Section 5-20.
19             (4)  The minimum amount assessment  for  the  second
20        and third installments assessments shall be $250 $500 per
21        installment   assessment   and   the   maximum  for  each
22        installment assessment shall be $7,500 $5,000.
23             (5)  Every warehouseman shall pay an assessment when
24        increasing available permanent  storage  capacity  in  an
25        amount  equal to $0.001 multiplied by the total number of
26        bushels to be added to permanent storage  capacity.   The
27        minimum  assessment  on any increase in permanent storage
28        capacity shall be $50 and the maximum assessment shall be
29        $20,000.  The  assessment  based  upon  an  increase   in
30        permanent storage capacity shall be paid at or before the
31        time  of  approval  of  the increase in permanent storage
32        capacity.  This assessment  on  the  increased  permanent
33        storage capacity does not relieve the warehouseman of any
34        assessments  as  set  forth  in  subsection  (d)  of this
 
                            -31-     LRB093 03693 BDD 17074 a
 1        Section.
 2             (6)  Every warehouseman shall pay an  assessment  of
 3        $0.0005  per  bushel  when  increasing  available storage
 4        capacity by use of temporary storage space.  The  minimum
 5        assessment on temporary storage space shall be $100.  The
 6        assessment  based  upon  temporary storage space shall be
 7        paid at or before the time of approval of the  amount  of
 8        the  temporary  storage  space.    This assessment on the
 9        temporary storage space capacity  does  not  relieve  the
10        warehouseman   of   any   assessments  as  set  forth  in
11        subsection (d) of this Section.
12             (7)  Every warehouseman shall pay an  assessment  of
13        $0.001  per  bushel  of  emergency    storage space.  The
14        minimum assessment on any emergency storage  space  shall
15        be  $100.   The  assessment  based upon emergency storage
16        space shall be paid at or before the time of approval  of
17        the   amount   of  the  emergency  storage  space.   This
18        assessment  on  the  emergency  storage  space  does  not
19        relieve the warehouseman of any assessments as set  forth
20        in subsection (d) of this Section.
21             (8)  The second and third installments shall be paid
22        to the Department within 60 days after the date posted on
23        the  written  notice  of assessment. The Department shall
24        immediately deposit all paid installments into the Fund.
25        (d)  Grain dealer  subsequent  assessments;  warehouseman
26    subsequent assessments Subsequent assessments.
27             (1)  Subject  to  paragraph  (4)  of this subsection
28        (d), if on the first working day of  a  calendar  quarter
29        when  a  licensee is not already subject to an assessment
30        under this subsection (d) (the  assessment  determination
31        date),  if the equity in the Fund is less than $6,000,000
32        below $3,000,000 on September  1st  of  any  year,  every
33        grain  dealer  who  has, or was required to have, already
34        paid  the  newly  licensed  first,  second,   and   third
 
                            -32-     LRB093 03693 BDD 17074 a
 1        assessments  shall  be  assessed  by  the Department in a
 2        total an amount equal to:
 3                  (A)  $0.0000725 multiplied by the  total  value
 4             of  grain  purchases  for  the  grain  dealer's last
 5             completed  fiscal  year  prior  to  the   assessment
 6             determination  date  as shown in the final financial
 7             statement for that year provided to  the  Department
 8             under Section 5-20; and
 9                  (B)  $0.0001275  multiplied  by that portion of
10             the value of grain purchases for the grain  dealer's
11             last  completed  fiscal year prior to the assessment
12             determination date that exceeds the adjusted  equity
13             of  the  licensee  multiplied by 20, as shown on the
14             final financial statement for  the  licensee's  last
15             completed  fiscal  year  provided  to the Department
16             under Section 5-20.
17             The minimum total amount  for  the  grain  dealer  a
18        subsequent  assessment  shall  be  $250 $500 per 12-month
19        period year and the maximum amount shall be $7,500 $5,000
20        per 12-month period year.   For  the  purposes  of  grain
21        dealer  assessments under this item (1) of subsection (d)
22        of this Section, the total value of grain purchases shall
23        be the total value  of  first  time  grain  purchases  by
24        Illinois locations from producers.
25             (2)  Subject  to  paragraph  (4)  of this subsection
26        (d), if on the first working day of  a  calendar  quarter
27        when  a  licensee  is  not subject to an assessment under
28        this subsection (d) (the assessment determination  date),
29        if  the  equity in the Fund is less than $6,000,000 below
30        $3,000,000  on  September  1st   of   any   year,   every
31        warehouseman  who  has,  or was required to have, already
32        paid  the  newly  licensed  first,  second,   and   third
33        assessments  shall  be assessed a warehouseman subsequent
34        assessment by the Department in a total an  amount  equal
 
                            -33-     LRB093 03693 BDD 17074 a
 1        to:
 2                  (A)  $0.000425 multiplied by the total licensed
 3             storage capacity of the warehouseman as of the first
 4             day  of  September  that  immediately  precedes  the
 5             assessment determination date 1st of that year; and
 6                  (B)  $0.000495  multiplied  by  that portion of
 7             the licensed storage capacity of the warehouseman as
 8             of the  first  day  of  September  that  immediately
 9             precedes  the  assessment  determination date 1st of
10             that year that exceeds the adjusted  equity  of  the
11             licensee  multiplied  by  5,  as  shown on the final
12             financial  statement   for   the   licensee's   last
13             completed  fiscal  year  provided  to the Department
14             under Section 5-20.
15             The  minimum  total  amount   for   a   warehouseman
16        subsequent  assessment  shall  be  $250 $500 per 12-month
17        period year and the maximum amount shall be $7,500 $5,000
18        per 12-month period year.
19             (3)  Subject to paragraph  (4)  of  this  subsection
20        (d), if the equity in the Fund is below $6,000,000 on the
21        first  working  day of a calendar quarter when a licensee
22        is not  already  subject  to  an  assessment  under  this
23        subsection (d) (the assessment determination date), every
24        incidental grain dealer who has, or was required to have,
25        already  paid  all  3  installments of the newly licensed
26        assessments shall be assessed  by  the  Department  in  a
27        total  amount  equal  to  $100.  It  shall be paid to the
28        Department within 60 days after the date  posted  on  the
29        written  notification  by  the Department, which shall be
30        sent  after  the  first  day  of  the  calendar   quarter
31        immediately following the assessment determination date.
32             (4)  Following  the  payment  of the final quarterly
33        installment by grain dealers and warehousemen,  the  next
34        assessment  determination  date can be no sooner than the
 
                            -34-     LRB093 03693 BDD 17074 a
 1        first working  day  of  the  sixth  full  calendar  month
 2        following the payment.
 3             (5)  All assessments under paragraphs (1) and (2) of
 4        this  subsection  (d)  shall be effective as of the first
 5        day of the calendar  quarter  immediately  following  the
 6        assessment  determination  date  and shall be paid to the
 7        Department by licensees in 4 equal  installments  by  the
 8        twentieth   day  of  each  consecutive  calendar  quarter
 9        following notice by the Department of the assessment. The
10        Department shall give written notice to all licensees  of
11        when  the  assessment  is  effective, and the rate of the
12        assessment, by mail within 20 days after  the  assessment
13        determination date.
14             (6)  After an assessment under paragraph (1) and (2)
15        of  this  subsection (d) is instituted, the amount of any
16        unpaid installments  for  the  assessment  shall  not  be
17        adjusted   based   upon   any  change  in  the  financial
18        statements or licensed storage capacity of a licensee.
19             (7)  If the due date for the payment by  a  licensee
20        of  the third assessment under subsections (b) and (c) of
21        this Section 5-30 is after the  assessment  determination
22        date,  that licensee shall not be subject to any of the 4
23        installments of an assessment under  paragraphs  (1)  and
24        (2) of this subsection (d).
25             (8)  The  Department  shall  immediately deposit all
26        paid assessments into the Fund. If the due date  for  the
27        payment  by  a  licensee of the third assessment is after
28        September 1st in a year when the equity in  the  Fund  is
29        below $3,000,000, that licensee shall not be subject to a
30        subsequent assessment for that year.
31        (e)  Newly licensed; exemptions.
32             (1)  For  the purpose of assessing fees for the Fund
33        under subsection (a) of this Section, and subject to  the
34        provisions of item (e)(2) of this Section, the Department
 
                            -35-     LRB093 03693 BDD 17074 a
 1        shall consider the following to be newly licensed:
 2                  (A)  A  person  that becomes a licensee for the
 3             first time after the effective date of this Code.
 4                  (B)  A licensee who has a lapse in licensing of
 5             more  than  30  days.   A  license  shall   not   be
 6             considered  to  be  lapsed  after  its revocation or
 7             termination if an administrative or judicial  action
 8             is  pending or if an order from an administrative or
 9             judicial body continues an existing license.
10                  (C)  A  grain  dealer   that   is   a   general
11             partnership   in   which   there   is  a  change  in
12             partnership interests and  that  change  is  greater
13             than 50% during the partnership's fiscal year.
14                  (D)  A   grain   dealer   that   is  a  limited
15             partnership in  which  there  is  a  change  in  the
16             controlling  interest  of a general partner and that
17             change is greater than 50% of the total  controlling
18             interest  during  the  limited  partnership's fiscal
19             year.
20                  (E)  A grain dealer that is a limited liability
21             company in which there is  a  change  in  membership
22             interests and that change is greater than 50% during
23             the limited liability company's fiscal year.
24                  (F)  A  grain  dealer  that  is the result of a
25             statutory consolidation if that person has  adjusted
26             equity  of  less  than  90% of the combined adjusted
27             equity of the predecessor persons who  consolidated.
28             For  the  purposes  of  this paragraph, the adjusted
29             equity of the resulting person shall  be  determined
30             from  the  approved or certified financial statement
31             submitted to the Department  for  the  first  fiscal
32             year  of  the  resulting person.  For the purpose of
33             this paragraph, the combined adjusted equity of  the
34             predecessor persons shall be determined by combining
 
                            -36-     LRB093 03693 BDD 17074 a
 1             the  adjusted  equity  of each predecessor person as
 2             set forth in the most recent approved  or  certified
 3             financial   statement  of  each  predecessor  person
 4             submitted to the Department.
 5                  (G)  A grain dealer that is  the  result  of  a
 6             statutory  merger if that person has adjusted equity
 7             of less than 90% of the combined adjusted equity  of
 8             the   predecessor   persons  who  merged.   For  the
 9             purposes of this paragraph, the adjusted  equity  of
10             the  resulting  person  shall be determined from the
11             approved or certified financial statement  submitted
12             to  the  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                  (H)  A  grain  dealer   that   is   a   general
23             partnership   in   which   there   is  a  change  in
24             partnership interests and that change is 50% or less
25             during the partnership's fiscal year if the adjusted
26             equity of the partnership after the change  is  less
27             than  90%  of the adjusted equity of the partnership
28             before  the  change.   For  the  purpose   of   this
29             paragraph,  the  adjusted  equity of the partnership
30             after  the  change  shall  be  determined  from  the
31             approved or certified financial statement  submitted
32             to  the  Department for the first fiscal year ending
33             after  the  change.   For  the  purposes   of   this
34             paragraph,  the  adjusted  equity of the partnership
 
                            -37-     LRB093 03693 BDD 17074 a
 1             before the  change  shall  be  determined  from  the
 2             approved  or certified financial statement submitted
 3             to the Department for the last fiscal  year  of  the
 4             partnership  ending  on  the  date  of or before the
 5             change.
 6                  (I)  A  grain  dealer   that   is   a   limited
 7             partnership  in  which  there  is  a  change  in the
 8             controlling interest of a general partner  and  that
 9             change  is  50%  or  less  of  the total controlling
10             interest during the partnership's fiscal year if the
11             adjusted equity of the partnership after the  change
12             is  less  than  90%  of  the  adjusted equity of the
13             partnership before the change.  For the purposes  of
14             this   paragraph,   the   adjusted   equity  of  the
15             partnership after the  change  shall  be  determined
16             from  the  approved or certified financial statement
17             submitted to the Department  for  the  first  fiscal
18             year  ending  after the change.  For the purposes of
19             this  paragraph,  the   adjusted   equity   of   the
20             partnership  before  the  change shall be determined
21             from the approved or certified  financial  statement
22             submitted to the Department for the last fiscal year
23             of  the  partnership ending on the date of or before
24             the change.
25                  (J)  A grain dealer that is a limited liability
26             company in which there is  a  change  in  membership
27             interests  and  that  change  is  50% or less of the
28             total  membership  interests  during   the   limited
29             liability  company's  fiscal  year  if  the adjusted
30             equity of the limited liability  company  after  the
31             change  is  less  than 90% of the adjusted equity of
32             the limited liability  company  before  the  change.
33             For  the  purposes  of  this paragraph, the adjusted
34             equity of the limited liability  company  after  the
 
                            -38-     LRB093 03693 BDD 17074 a
 1             change  shall  be  determined  from  the approved or
 2             certified  financial  statement  submitted  to   the
 3             Department  for  the  first fiscal year ending after
 4             the change.  For the purposes of this paragraph, the
 5             adjusted equity of  the  limited  liability  company
 6             before  the  change  shall  be  determined  from the
 7             approved or certified financial statement  submitted
 8             to  the  Department  for the last fiscal year of the
 9             limited liability company ending on the date  of  or
10             before the change.
11                  (K)  A  grain  dealer  that  is the result of a
12             statutory consolidation or merger if one or more  of
13             the predecessor  persons that consolidated or merged
14             into  the resulting  grain dealer was not a licensee
15             under this Code at the time of the consolidation  or
16             merger.
17             (2)  For  the purpose of assessing fees for the Fund
18        as set forth in  subsection  (a)  of  this  Section,  the
19        Department  shall  consider  the  following  as not being
20        newly  licensed  and,  therefore,  exempt  from   further
21        assessment unless an assessment is required by subsection
22        (d) of this Section:
23                  (A)  A  person  resulting  solely  from  a name
24             change of a licensee.
25                  (B)  A warehouseman changing  from  a  Class  I
26             warehouseman  to  a  Class II warehouseman or from a
27             Class II warehouseman  to  a  Class  I  warehouseman
28             under this Code.
29                  (C)  A  licensee  that  becomes  a wholly owned
30             subsidiary of another licensee.
31                  (D)  Subject to item (e)(1)(K) of this Section,
32             a  person  that  is  the  result  of   a   statutory
33             consolidation  if  that  person  has adjusted equity
34             greater  than  or  equal  to  90%  of  the  combined
 
                            -39-     LRB093 03693 BDD 17074 a
 1             adjusted  equity  of  the  predecessor  persons  who
 2             consolidated.  For the purposes of  this  paragraph,
 3             the adjusted equity of the resulting person shall be
 4             determined  from the approved or certified financial
 5             statement submitted to the Department for the  first
 6             fiscal year of the resulting person. For the purpose
 7             of  this  paragraph, the combined adjusted equity of
 8             the  predecessor  persons  shall  be  determined  by
 9             combining the adjusted  equity  net  worth  of  each
10             predecessor  person as set forth in the  most recent
11             approved or certified financial  statement  of  each
12             predecessor person submitted to the Department.
13                  (E)  Subject to item (e)(1)(K) of this Section,
14             a person that is the result of a statutory merger if
15             that  person  has  adjusted  equity  greater than or
16             equal to 90% of the combined adjusted equity of  the
17             predecessor persons who merged.  For the purposes of
18             this paragraph, the adjusted equity of the resulting
19             person  shall  be  determined  from  the approved or
20             certified  financial  statement  submitted  to   the
21             Department   for   the  first  fiscal  year  of  the
22             resulting person ending after the merger.   For  the
23             purposes  of  this  paragraph, the combined adjusted
24             equity  of  the   predecessor   persons   shall   be
25             determined  by combining the adjusted equity of each
26             predecessor person as set forth in the  most  recent
27             approved or certified financial statement, submitted
28             to  the  Department for the last fiscal year of each
29             predecessor person ending on the date of  or  before
30             the merger.
31                  (F)  A  general partnership in which there is a
32             change in partnership interests and that  change  is
33             50% or less during the partnership's fiscal year and
34             the  adjusted  equity  of  the partnership after the
 
                            -40-     LRB093 03693 BDD 17074 a
 1             change is greater  than  or  equal  to  90%  of  the
 2             adjusted   equity  of  the  partnership  before  the
 3             change.  For the purposes  of  this  paragraph,  the
 4             adjusted  equity of the partnership after the change
 5             shall be determined from the approved  or  certified
 6             financial  statement submitted to the Department for
 7             the first fiscal year ending after the change.   For
 8             the  purposes of this paragraph, the adjusted equity
 9             of  the  partnership  before  the  change  shall  be
10             determined from the approved or certified  financial
11             statement  submitted  to the Department for the last
12             fiscal year of the partnership ending on the date of
13             or before the change.
14                  (G)  A limited partnership in which there is  a
15             change  in  the  controlling  interest  of a general
16             partner and that change is 50% or less of the  total
17             controlling interest during the partnership's fiscal
18             year  and  the  adjusted  equity  of the partnership
19             after the change is greater than or equal to 90%  of
20             the  adjusted  equity  of the partnership before the
21             change.  For the purposes  of  this  paragraph,  the
22             adjusted  equity of the partnership after the change
23             shall be determined from the approved  or  certified
24             financial  statement submitted to the Department for
25             the first fiscal year ending after the change.   For
26             the  purposes of this paragraph, the adjusted equity
27             of  the  partnership  before  the  change  shall  be
28             determined from the approved or certified  financial
29             statement  submitted  to the Department for the last
30             fiscal year of the partnership ending on the date of
31             or before the change.
32                  (H)  A limited liability company in which there
33             is a change in membership interests and that  change
34             is  50%  or  less  of the total membership interests
 
                            -41-     LRB093 03693 BDD 17074 a
 1             during the limited liability company's  fiscal  year
 2             if  the  adjusted  equity  of  the limited liability
 3             company after the change is greater than or equal to
 4             90% of the adjusted equity of the limited  liability
 5             company before the change.  For the purposes of this
 6             paragraph,   the  adjusted  equity  of  the  limited
 7             liability  company  after  the   change   shall   be
 8             determined  from the approved or certified financial
 9             statement submitted to the Department for the  first
10             fiscal  year  ending  after  the  change.   For  the
11             purposes  of  this paragraph, the adjusted equity of
12             the limited  liability  company  before  the  change
13             shall  be  determined from the approved or certified
14             financial statement submitted to the Department  for
15             the  last  fiscal  year  of  the  limited  liability
16             company  ending on the date of or before the change.
17                  (I)  A licensed warehouseman that is the result
18             of a statutory merger or consolidation to the extent
19             the  combined  storage  capacity  of  the  resulting
20             warehouseman  has  been  assessed  under  this  Code
21             before the statutory merger or consolidation, except
22             that  any  storage   capacity   of   the   resulting
23             warehouseman  that  has not previously been assessed
24             under this Code shall be  assessed  as  provided  in
25             items (c)(5), (c)(6), and (c)(7) of this Section.
26                  (J)  A federal warehouseman who participated in
27             the  Fund  under  Section 30-10 and who subsequently
28             received an  Illinois  license  to  the  extent  the
29             storage  capacity  of  the warehouseman was assessed
30             under this Code prior to Illinois licensing.
31        (f)  Grain  seller  initial   assessments   and   regular
32    assessments. Assessments under this subsection (f) apply only
33    to  the  first sale of grain to a grain dealer at an Illinois
34    location.
 
                            -42-     LRB093 03693 BDD 17074 a
 1             (1) The grain seller initial  assessment  period  is
 2        that  period  of  time beginning on the effective date of
 3        this amendatory Act of  the  93rd  General  Assembly  and
 4        ending   on   the  first  assessment  determination  date
 5        thereafter when the  equity  in  the  fund  is  at  least
 6        $6,000,000.
 7             (2)  Subject to paragraph (3) of this subsection (f)
 8        (i)  if during the grain seller initial assessment period
 9        the equity in the Fund is less than $3,000,000 or (ii) if
10        at any time after the  grain  seller  initial  assessment
11        period the equity in the Fund is less than $2,000,000, on
12        the  first working day of a calendar quarter when a grain
13        seller is not already subject to an assessment under this
14        subsection (f) (the assessment determination date),  each
15        person  who  settles for grain (sold to a grain dealer at
16        an  Illinois  location)  during   the   12-month   period
17        commencing  on  the  first day of the succeeding calendar
18        quarter (the assessment period) shall pay  an  assessment
19        equal  to  $0.0004  multiplied by the net market value of
20        grain settled for (payment received for grain sold).
21             (3)  The next assessment determination date  can  be
22        no  sooner  than the first working day of the fourth full
23        calendar  month  following  the  end  of  the  assessment
24        period.
25             (4)  "Net market value" of  grain  means  the  gross
26        sales  price of that grain adjusted by application of the
27        grain dealer's discount schedule in effect at the time of
28        sale and  after  deduction  of  any  statutory  commodity
29        check-offs. Other charges such as storage charges, drying
30        charges,  and  transportation costs shall not be deducted
31        in arriving at the net market value of grain  sold  to  a
32        grain  dealer.  The  net  market  value of grain shall be
33        determined from the settlement sheet or other  applicable
34        written  evidence  of  the  sale  of  grain  to the grain
 
                            -43-     LRB093 03693 BDD 17074 a
 1        dealer.
 2             (5)  All assessments under this subsection (f) shall
 3        commence  on  the  first  day  of  the  calendar  quarter
 4        immediately following the assessment  determination  date
 5        and  shall  continue  for  a  period  of  12  consecutive
 6        calendar  months.  The  assessments shall be collected by
 7        licensees at the time of settlement during the assessment
 8        period,  and  shall  be  remitted  by  licensees  to  the
 9        Department by the twentieth day of each calendar quarter,
10        commencing with the second calendar quarter following the
11        assessment determination date. The Department shall  give
12        written  notice  to  all  licensees of when an assessment
13        under this subsection (f) is to begin and  end,  and  the
14        appropriate  level  of  the assessment, by mail within 20
15        days after the assessment determination date.
16             (6)  Assessments under  this  subsection  (f)  apply
17        only  to  grain  for  which settlement is made during the
18        assessment period, without regard to the date  the  grain
19        was sold to the licensee.
20             (7)  The  collection  and  remittance of assessments
21        from first sellers of grain under this subsection (f)  is
22        the  sole  responsibility  of  the  licensees to whom the
23        grain is sold. Sellers of grain shall not be penalized by
24        reason of any licensee's  failure  to  comply  with  this
25        subsection  (f).  Failure  of  a  licensee to collect any
26        assessment shall not relieve the grain seller from paying
27        the assessment, and the grain seller shall promptly remit
28        the uncollected assessments upon demand by the  licensee,
29        which  may  be  accounted  for  in  settlement  of  grain
30        subsequently  sold to that licensee. Licensees who do not
31        collect assessments as required by this  subsection  (f),
32        or  who  do not remit those assessments to the Department
33        within the time deadlines  required  by  this  subsection
34        (f),  shall  remit  the  amount  of  the assessments that
 
                            -44-     LRB093 03693 BDD 17074 a
 1        should have  been  remitted  to  the  Department  and  in
 2        addition  shall  be  subject  to a monetary penalty in an
 3        amount not to exceed $1,000.
 4             (8)  Notwithstanding the other  provisions  of  this
 5        subsection  (f),  no  assessment  shall be levied against
 6        grain sold by the Department as a result of a failure.
 7        (g) Lender assessments.
 8             (1) Subject to the  provisions  of  this  subsection
 9        (g),  if  on  the first working day of a calendar quarter
10        when a person is not already  subject  to  an  assessment
11        under  this subsection (g) the equity in the Fund is less
12        than $6,000,000, each person holding  warehouse  receipts
13        issued from an Illinois location on grain owned or stored
14        by  a licensee to secure a loan to that licensee shall be
15        assessed a quarterly lender  assessment  for  each  of  4
16        consecutive calendar quarters beginning with the calendar
17        quarter  next  succeeding  the  assessment  determination
18        date.
19             (2) Each quarterly lender assessment shall be at the
20        rate  of  $0.00000055  per  bushel  per  day  for bushels
21        covered by a warehouse receipt held as security  for  the
22        loan  during  that  calendar quarter times the applicable
23        commodity price times the lender  assessment  multiplier,
24        if  any,  determined by the Department in accordance with
25        paragraph (3) of this subsection  (g).  With  respect  to
26        each  calendar  quarter within the assessment period, the
27        "applicable commodity price" shall be the  closing  price
28        paid  by  the  licensee  on  the last working day of that
29        calendar quarter for the base  commodity  for  which  the
30        warehouse receipt was issued.
31             (3)  With  respect  to  the second assessment period
32        beginning after  June  30,  2003,  the  Department  shall
33        determine  and apply a lender assessment multiplier equal
34        to 250,000 divided by  the  aggregate  dollar  amount  of
 
                            -45-     LRB093 03693 BDD 17074 a
 1        lender  assessments  imposed  under  this  subsection (g)
 2        under the first assessment period  beginning  after  June
 3        30,  2003.  With  respect  to the third assessment period
 4        beginning after  June  30,  2003,  the  Department  shall
 5        determine  and apply a lender assessment multiplier equal
 6        to 250,000 divided by the  average  of  aggregate  dollar
 7        amounts   of   lender   assessments  imposed  under  this
 8        subsection (g)  under  the  first  2  assessment  periods
 9        beginning after June 30, 2003. With respect to assessment
10        periods  thereafter,  the  Department shall determine and
11        apply a lender assessment  multiplier  equal  to  250,000
12        divided  by  the  average  of the 3 most recent aggregate
13        dollar amounts of lender assessments imposed  under  this
14        subsection (g).
15             (4) The next assessment determination date can be no
16        sooner  than  the  first  working  day of the fourth full
17        calendar  month  following  the  end  of  the  assessment
18        period.
19             (5) The Department shall give written notice by mail
20        within 20 days after the assessment determination date to
21        all licensees of when assessments under  this  subsection
22        (g)  are  to  begin  and  end,  the  rate  of  the lender
23        assessment, and the lender assessment multiplier, if any,
24        that shall apply.
25             (6) It is the responsibility of a licensee to inform
26        each of its lenders and other persons by virtue of  whose
27        relationship  with  the licensee this subsection (g) will
28        apply as to the onset of an  assessment  for  which  that
29        person   might   be  liable  and  the  applicable  lender
30        assessment multiplier, if any. The notification  must  be
31        in writing and, as to persons subject to assessment under
32        this subsection (g) on the assessment determination date,
33        must  be  sent  no  later than 20 days after the licensee
34        receives notice of an assessment from the Department.  As
 
                            -46-     LRB093 03693 BDD 17074 a
 1        to   persons   not   subject  to  assessment  under  this
 2        subsection (g) as of the assessment  determination  date,
 3        the  notice  shall  be  sent  or  given no later than the
 4        closing of any transaction subsequent to  the  assessment
 5        determination  date  involving the licensee and by virtue
 6        of which  transaction  the  person  is  made  subject  to
 7        assessment under this subsection (g).
 8             (7)  Within  20  days after the end of each calendar
 9        quarter within the assessment period, each licensee shall
10        send to each lender with which  it  has  been  associated
11        during  that  calendar  quarter  and  to the Department a
12        written notice of quarterly assessment together with  the
13        information   needed  to  determine  the  amount  of  the
14        quarterly assessment owing with  respect  to  loans  from
15        that lender. This information shall include the number of
16        bushels  covered  by each warehouse receipt, organized by
17        commodity, held as security for the loan  owing  to  that
18        lender,  the  number  of  days  each  of  those warehouse
19        receipts was outstanding during  that  calendar  quarter,
20        the  applicable  commodity  price,  the applicable lender
21        assessment  multiplier,  the  amount  of  the   resulting
22        quarterly  lender  assessment,  and  the  due date of the
23        quarterly assessment.
24             (8) Each quarterly assessment shall be due and  paid
25        by the lender or its designee to the Department within 20
26        days  after  the end of the calendar quarter to which the
27        assessment pertains.
28             (9) Lenders shall not be penalized by reason of  any
29        licensee's  failure  to  comply with this subsection (g).
30        Failure of a licensee to comply with this subsection  (g)
31        shall  not relieve the lender from paying the assessment,
32        and the  lender  shall  promptly  remit  the  uncollected
33        assessments  by  the  due date as set forth in the notice
34        from the licensee.
 
                            -47-     LRB093 03693 BDD 17074 a
 1             (10) This subsection (g) applies to any  person  who
 2        holds a grain warehouse receipt issued by a licensee from
 3        an   Illinois   location  pursuant  to  any  transaction,
 4        regardless of its form, that creates a security  interest
 5        in the grain including, without limitation, the advancing
 6        of  money  or  other  value  to  or  for the benefit of a
 7        licensee upon the licensee's issuance or negotiation of a
 8        grain warehouse receipt and pursuant to or in  connection
 9        with   an   agreement   between   the   licensee   and  a
10        counter-party for the repurchase  of  the  grain  by  the
11        licensee  or  designee  of  the licensee. For purposes of
12        this  subsection  (g),  any  such  transaction  shall  be
13        treated as one in which grain is  held  as  security  for
14        loan outstanding to a licensee within the meaning of this
15        subsection  (g),  and such a person shall be treated as a
16        lender.
17             (11)  The Department shall immediately  deposit  all
18        paid assessments under this subsection (g) into the Fund.
19        (h)  Equity in the Fund shall exclude moneys owing to the
20    State or the Reserve Fund as a result  of  transfers  to  the
21    Fund  from the General Revenue Fund or the Reserve Fund under
22    subsection  (h)  of  Section   25-20.   Notwithstanding   the
23    foregoing,  for  purposes  of  calculating equity in the Fund
24    during  the  grain  seller  initial  assessment  period   and
25    assessing  grain sellers, it shall be presumed that the State
26    is owed, prior to repayment, only $2,000,000 and the  Reserve
27    Fund   contains   a   balance   of   $2,000,000.    Under  no
28    circumstances,  however,  shall  there   be   more   than   2
29    consecutive  grain  seller  assessments  during  the  initial
30    assessment period, unless there is a failure that reduces the
31    equity  in the Fund to below $3,000,000. Except for the first
32    assessment made under this  Section,  and  assessments  under
33    items  (c)(5),  (c)(6),  and  (c)(7)  of  this  Section,  all
34    assessments  shall  be  paid to the Department within 60 days
 
                            -48-     LRB093 03693 BDD 17074 a
 1    after the date posted on the written  notice  of  assessment.
 2    The  Department  shall  forward  all  paid assessments to the
 3    Fund.
 4    (Source: P.A. 91-213, eff. 7-20-99.)

 5        (240 ILCS 40/10-5)
 6        Sec. 10-5.  Duties and requirements of licensees.
 7        (a)  Each licensee shall have adequate property insurance
 8    covering grain in its  possession  or  custody  and  adequate
 9    liability, property, theft, hazard, and workers' compensation
10    insurance.
11             (1)  Every   insurance   policy   shall   contain  a
12        provision that it will not be cancelled by the  principal
13        or  the insurance company except on 60 days prior written
14        notice  to  the  Director  and  the  principal   insured.
15        Cancellation  of the policy does not affect the liability
16        accrued or that may accrue under the  policy  before  the
17        expiration  of the 60 days.  The notice shall contain the
18        termination date.
19             (2)  Each licensee shall keep  a  general  insurance
20        account  showing  the  policy  number,  issuing  company,
21        amount,  binding  date,  and expiration date of insurance
22        coverage and the property covered by insurance.
23             (3)  In reference to a warehouseman, notwithstanding
24        any provision to the contrary contained in the  warehouse
25        receipts  involved,  a  warehouseman  is not obligated to
26        provide   property   insurance   on   Commodity    Credit
27        Corporation  grain ("CCC-owned grain"). The warehouseman,
28        however, shall continue to carry the  insurance  required
29        on loan grain that becomes CCC-owned grain until the date
30        stated  in  a  written  notice  from  CCC  or  its  agent
31        instructing  the  warehouseman to cancel the insurance on
32        the grain as of that date.  If  CCC-owned  grain  is  not
33        covered  by property insurance, recovery by the Commodity
 
                            -49-     LRB093 03693 BDD 17074 a
 1        Credit Corporation from the Fund shall be reduced by  the
 2        amount  of  property  insurance  proceeds that would have
 3        been available to cover any loss to CCC-owned  grain  had
 4        the CCC-owned grain been covered by property insurance.
 5        (b)  A  licensee  shall immediately notify the Department
 6    when  there  is  a  change  of  management  or  cessation  of
 7    operations or change in fiscal year end.
 8        (c)  All grain trades, grain merchandising  transactions,
 9    grain  origination  plans  and  programs, and transactions or
10    arrangements that represent or reflect rights and obligations
11    in grain must be clearly  identified  and  disclosed  in  the
12    books  and records of the licensee, for audit and examination
13    purposes.
14    (Source: P.A. 89-287, eff. 1-1-96.)

15        (240 ILCS 40/10-10)
16        Sec. 10-10.  Duties and requirements of grain dealers.
17        (a)  Long and short market position.
18             (1)  Grain dealers shall at all  times  maintain  an
19        accurate  and  current  long  and  short  market position
20        record for each grain  commodity.   The  position  record
21        shall  at a minimum contain the net position of all grain
22        owned, wherever located, grain purchased  and  sold,  and
23        any grain option contract purchased or sold.
24             (2)  Grain  dealers,  except grain dealers regularly
25        and  continuously  reporting  to  the  Commodity  Futures
26        Trading Commission or grain dealers who have obtained the
27        permission of the Department to have different open  long
28        or  short market positions, may maintain an open position
29        in the grain commodity of which the grain dealer buys the
30        greatest number of bushels per fiscal year not to  exceed
31        one bushel for each $10 of adjusted equity at fiscal year
32        end  up  to a maximum open position of 50,000 bushels and
33        one-half that number of bushels up to 25,000 bushels  for
 
                            -50-     LRB093 03693 BDD 17074 a
 1        all other grain commodities that the grain dealer buys. A
 2        grain  dealer,  however, may maintain an open position of
 3        up to  5,000 bushels for each grain commodity  the  grain
 4        dealer buys.
 5        (b)  The  license  issued  by  the  Department to a grain
 6    dealer shall  be  posted  in  the  principal  office  of  the
 7    licensee  in  this  State.   A certificate shall be posted in
 8    each location where the licensee engages  in  business  as  a
 9    grain dealer.  In the case of a licensee operating a truck or
10    tractor trailer unit for the purpose of purchasing grain, the
11    licensee  shall  have  a certificate carried in each truck or
12    tractor trailer unit used in connection with  the  licensee's
13    grain dealer business.
14        (c)  The  licensee  must  have  at  all  times sufficient
15    financial resources to pay  producers  on  demand  for  grain
16    purchased from them.
17        (d)  A  licensee that is solely a grain dealer shall on a
18    daily basis maintain an  accurate  and  current  daily  grain
19    transaction report.
20        (e)  A  licensee  that  is  both  a  grain  dealer  and a
21    warehouseman shall at all  times  maintain  an  accurate  and
22    current daily position record.
23        (f)  In  the  case  of  a  change of ownership of a grain
24    dealer, the obligations of a grain dealer do not cease  until
25    the  grain  dealer  has  surrendered  all  unused price later
26    contracts to the Department and the successor has executed  a
27    successor's  agreement  that is acceptable to the Department,
28    or  the  successor  has  otherwise  provided  for  the  grain
29    obligations of its predecessor in a manner that is acceptable
30    to the Department.
31        (g)  If a grain dealer proposes to cease  doing  business
32    as  a  grain dealer and there is no successor, it is the duty
33    of the grain dealer  to  surrender  all  unused  price  later
34    contracts  to  the  Department,  together  with  an affidavit
 
                            -51-     LRB093 03693 BDD 17074 a
 1    accounting for all grain dealer obligations setting forth the
 2    arrangements made with producers for final disposition of the
 3    grain dealer obligations and  indicating  the  procedure  for
 4    payment  in full of all outstanding grain obligations.  It is
 5    the duty of the Department to give notice by publication that
 6    a grain dealer has ceased doing business without a successor.
 7    After payment in full of all outstanding  grain  obligations,
 8    it is the duty of the grain dealer to surrender its license.
 9    (Source: P.A. 91-213, eff. 7-20-99.)

10        (240 ILCS 40/10-15)
11        Sec. 10-15.  Price later contracts.
12        (a)  Price  later  contracts  shall  be  written on forms
13    prescribed or authorized  by  the  Department.   Price  later
14    contract  forms  shall  be  printed by a person authorized to
15    print those contracts by the Department after that person has
16    agreed to comply with each of the following:
17             (1)  That all price later contracts shall be printed
18        as  prescribed by the Department  and  shall  be  printed
19        only for a licensed grain dealer.
20             (2)  That   all   price  later  contracts  shall  be
21        numbered consecutively and a  complete  record  of  these
22        contracts  shall be retained showing for whom printed and
23        the consecutive numbers printed on the contracts.
24             (3)  That a duplicate copy of all invoices  rendered
25        for  printing  price  later  contracts that will show the
26        consecutive numbers printed on  the  contracts,  and  the
27        number  of contracts printed, shall be promptly forwarded
28        to the Department.
29             (4)  that  the  person  shall  register   with   the
30        Department  and pay an annual registration fee of $100 to
31        print price later contracts.
32        (b)  A grain  dealer  purchasing  grain  by  price  later
33    contract  shall  at  all  times  own  grain, rights in grain,
 
                            -52-     LRB093 03693 BDD 17074 a
 1    proceeds from the sale of grain, and other assets  acceptable
 2    to  the  Department as set forth in this Code totaling 90% of
 3    the unpaid balance of  the  grain  dealer's  obligations  for
 4    grain  purchased  by price later contract.  That amount shall
 5    at all times remain unencumbered and shall be represented  by
 6    the aggregate of the following:
 7             (1)  Grain owned by the grain dealer valued by means
 8        of  the  hedging  procedures method that includes marking
 9        open contracts to market.
10             (2)  Cash on hand.
11             (3)  Cash held on  account  in  federally  or  State
12        licensed financial institutions.
13             (4)  Investments   held   in   time   accounts  with
14        federally or State licensed financial institutions.
15             (5)  Direct obligations of the U.S. government.
16             (6)  Funds on deposit in grain margin accounts.
17             (7)  Balances due or to become due to  the  licensee
18        on price later contracts.
19             (8)  Marketable securities, including mutual funds.
20             (9)  Irrevocable  letters  of credit in favor of the
21        Department and acceptable to the Department.
22             (10)  Price later contract service charges due or to
23        become due to the licensee.
24             (11)  Other evidence of proceeds from  or  of  grain
25        that is acceptable to the Department.
26        (c)  For  the  purpose  of  computing the dollar value of
27    grain  and  the  balance  due   on   price   later   contract
28    obligations,  the  value  of  grain  shall  be figured at the
29    current market price.
30        (d)  Title to grain sold by price  later  contract  shall
31    transfer  to  a  grain  dealer  at  the  time  on the date of
32    delivery of the grain.  Therefore, no storage  charges  shall
33    be  made  with  respect  to  grain  purchased  by price later
34    contract.   A  service  charge  for  handling  the  contract,
 
                            -53-     LRB093 03693 BDD 17074 a
 1    however, may be made.
 2        (e)  Subject to subsection (f)  of  this  Section,  if  a
 3    price  later  contract is not signed by all parties within 30
 4    days of the last date of delivery of  grain  intended  to  be
 5    sold  by  price later contract, then the grain intended to be
 6    sold by price later contract shall  be  priced  on  the  next
 7    business  day after 30 days from the last date of delivery of
 8    grain intended to be sold by  price  later  contract  at  the
 9    market  price  of the grain at the close of the next business
10    day after the 29th day. When the grain is priced  under  this
11    subsection,  the grain dealer shall send notice to the seller
12    of the grain within 10 days. The  notice  shall  contain  the
13    number  of bushels sold, the price per bushel, all applicable
14    discounts, the net proceeds, and a notice  that  states  that
15    the  Grain  Insurance  Fund  shall  provide  protection for a
16    period of only 160 days from  the  date  of  pricing  of  the
17    grain.
18        In  the  event of a failure, if a price later contract is
19    not signed  by  all  the  parties  to  the  transaction,  the
20    Department  may  consider the grain to be sold by price later
21    contract if a preponderance of  the  evidence  indicates  the
22    grain was to be sold by price later contract.
23        (f)  If  grain  is  in storage with a warehouseman and is
24    intended to be sold by price later contract, that grain shall
25    be considered as remaining in storage and not be deemed  sold
26    by  price  later  contract  until  the  date  the price later
27    contract is signed by all parties.
28        (g)  Scale  tickets  or  other  approved  documents  with
29    respect to grain purchased by a grain dealer by  price  later
30    contract  shall  contain  the  following:  "Sold Grain; Price
31    Later".
32        (h)  Price later contracts shall be issued  consecutively
33    and recorded by the grain dealer as established by rule.
34        (i)  A licensee grain dealer shall not issue a collateral
 
                            -54-     LRB093 03693 BDD 17074 a
 1    warehouse  receipt  on  grain  purchased  by  a  price  later
 2    contract  to  the extent the purchase price has not been paid
 3    by the licensee grain dealer.
 4        (j)  Failure to comply  with  the  requirements  of  this
 5    Section may result in suspension of the privilege to purchase
 6    grain by price later contract for up to one year.
 7        (k)  When  a producer with a price later contract selects
 8    a price for all or any part of the grain represented by  that
 9    contract,  then  within  5  business  days  after  that price
10    selection,  the  licensee  shall  mail  to  that  producer  a
11    confirmation of the price selection, clearly  and  succinctly
12    indicating the price selected.
13    (Source: P.A. 91-213, eff. 7-20-99.)

14        (240 ILCS 40/10-20)
15        Sec. 10-20.  Duties and requirements of warehouseman.
16        (a)  It  is the duty of every warehouseman to receive for
17    storage any grain that may be tendered to it in the  ordinary
18    course of business so far as the licensed storage capacity of
19    the  warehouse  permits  and  if  the  grain  is  of  a  kind
20    customarily  stored  by  the  warehouseman and is in suitable
21    condition for storage.
22             (1)  If the condition of grain offered  for  storage
23        might  adversely  affect  the  condition  of grain in the
24        warehouse, a warehouseman need not receive the grain  for
25        storage,  but  if  a warehouseman does receive the grain,
26        then it must be stored in a manner that  will  not  lower
27        the grade of other grain in the warehouse.
28             (2)  A    warehouseman   shall   provide   competent
29        personnel and equipment to weigh and grade all  grain  in
30        and out of storage.
31             (3)  A  warehouseman  shall  maintain  all  licensed
32        warehouse facilities in a manner suitable to preserve the
33        quality and quantity of grain stored.
 
                            -55-     LRB093 03693 BDD 17074 a
 1        (b)  For the purposes of the Department's examinations, a
 2    warehouseman  shall  provide  and  maintain safe and adequate
 3    means of ingress and egress to the  various  and  surrounding
 4    areas  of  the  facilities, storage bins, and compartments of
 5    the warehouse.
 6        (c)  Except as provided in this item (c), a  warehouseman
 7    shall  at  all  times  have a sufficient quantity of grain of
 8    like  kind  and  quality  to  meet  its  outstanding  storage
 9    obligations. For purposes of this  Section,  "like  kind  and
10    quality"  means  the  type  of commodity and a combination of
11    grade, specialty traits, if any, and class  or  sub-class  as
12    applicable.
13        (d)  A  warehouseman  shall  not store grain in excess of
14    the capacity for which it is licensed.
15        (e)  A  warehouseman  may  redeposit   grain   from   its
16    warehouse with another warehouseman or a federal warehouseman
17    in an  additional quantity not to exceed the licensed storage
18    capacity of its own warehouse.
19             (1)  If  grain  is  redeposited  as provided in this
20        Section,  a  warehouseman  must  retain  the  receipt  it
21        obtains from the second  warehouseman  as  proof  of  the
22        redeposit   and   retain   sufficient  control  over  the
23        redeposited  grain  as  is  necessary  to   comply   with
24        directions    of   the   original   depositor   regarding
25        disposition of the redeposited grain.
26             (2)  While grain is en route from  the  redepositing
27        warehouseman  to  the second warehouseman, a redepositing
28        warehouseman must retain an original or a duplicate  bill
29        of  lading  instead  of and until such time as it obtains
30        possession  of  the  warehouse  receipt   as   proof   of
31        disposition of the redeposited grain.
32        (f)  Schedule of rates and licenses.
33             (1)  A warehouseman shall file its schedule of rates
34        with  the Department and shall post its warehouse license
 
                            -56-     LRB093 03693 BDD 17074 a
 1        and a copy of the schedule of  rates  on  file  with  the
 2        Department in a conspicuous place in each location of the
 3        warehouseman where grain is received.
 4             (2)  The  schedule  of  rates  shall  be  on  a form
 5        prescribed by the Department and shall include the  names
 6        and  genuine signatures of all persons authorized to sign
 7        warehouse receipts issued by the warehouseman.
 8             (3)  To change the schedule of rates or the name  of
 9        any  person  authorized  to  sign  warehouse  receipts, a
10        warehouseman must file  with  the  Department  a  revised
11        schedule  of  rates  and,  thereafter,  post  the revised
12        schedule of rates at each location  of  the  warehouseman
13        where  grain  is received.  The revised schedule of rates
14        shall be deemed filed with the Department on the  earlier
15        of  the  date it is delivered to the Department or mailed
16        to the Department by certified  mail  properly  addressed
17        with  sufficient  postage attached.  The revised schedule
18        of rates shall be effective on the date the  schedule  of
19        rates   is  posted  after  delivery  or  mailing  to  the
20        Department in  accordance  with  this  Section.   Revised
21        schedules  of  rates  shall apply only to grain delivered
22        for storage after  the  effective  date  of  the  revised
23        schedule  of  rates.   No grain in storage at the time of
24        the effective date of a revised schedule of  rates  shall
25        be  subject to a revised schedule of rates until one year
26        after the date of delivery  of  grain,  unless  otherwise
27        provided by a written contract.
28             (4)  The  schedule  of  rates  may  provide  for the
29        negotiation of different rates for  large  deliveries  of
30        grain  if  those  rates are applied on a uniform basis to
31        all depositors under the same circumstances.
32        (g)  A warehouseman may refuse to  accept  grain  if  the
33    identity  of the grain is to be preserved.  If a warehouseman
34    accepts grain  and  the  identity  of  the  grain  is  to  be
 
                            -57-     LRB093 03693 BDD 17074 a
 1    preserved,  the  evidence  of storage shall state on its face
 2    that the grain is stored with its identity preserved and  the
 3    location of that grain.
 4        (h)  A  warehouseman  shall  at  all  times  maintain  an
 5    accurate and current daily position record on a daily basis.
 6        (i)  In the case of a change of ownership of a warehouse,
 7    the  obligations  of  a  warehouseman  do not cease until its
 8    successor is properly licensed under this Code or the  United
 9    States Warehouse Act, it has surrendered all unused warehouse
10    receipts  to  the  Department  and has executed a successor's
11    agreement, or the successor has otherwise  provided  for  the
12    obligations of its predecessor.
13        (j)  If  a  warehouseman proposes to cease doing business
14    as a warehouseman and there is no successor, it is  the  duty
15    of   the  warehouseman  to  surrender  all  unused  warehouse
16    receipts  to  the  Department,  together  with  an  affidavit
17    accounting for  all  warehouse  receipts  setting  forth  the
18    arrangements  made  with  depositors for final disposition of
19    the grain in storage and indicating the procedure for payment
20    in full of all outstanding obligations. After payment in full
21    of all  outstanding  obligations,  it  is  the  duty  of  the
22    warehouseman to surrender its license.
23        (k)  Requests by a warehouseman for special examinations,
24    grain   inventory   computation,  or  verification  of  grain
25    quantity or quality shall be accompanied by a fee of $200.
26        (l)  Nothing in this Section  is  deemed  to  prohibit  a
27    warehouseman from entering into agreements with depositors of
28    grain relating to allocation or reservation of storage space.
29    (Source: P.A. 89-287, eff. 1-1-96.)

30        (240 ILCS 40/15-15)
31        Sec. 15-15.  Violations of open position limits.
32        (a)  Violations of maximum allowable open position limits
33    by  more  than  1,000 bushels but less than twice the maximum
 
                            -58-     LRB093 03693 BDD 17074 a
 1    allowable open position limits.
 2             (1)  If a licensee violates  the  maximum  allowable
 3        open  position limits of item (a)(2) of Section 10-10 and
 4        the open position is more than  1,000  bushels  but  less
 5        than  twice  the  maximum allowable open position limits,
 6        the licensee shall be required to:
 7                  (A)  Post collateral with the Department in  an
 8             amount   equal  to  $1 per bushel for each bushel of
 9             soybeans in excess of  the  maximum  allowable  open
10             position  limits  and  50  cents  per bushel of each
11             bushel for all other grain in excess of the  maximum
12             allowable  open position limits or $2,500, whichever
13             is greater; and
14                  (B)   Pay a penalty in an amount not to  exceed
15             $250.
16             (2)  If a licensee commits 2 violations as set forth
17        in  item (a) (1) of Section 15-10 within a 2 year period,
18        the licensee must:
19                  (A)  post collateral with the Department in  an
20             amount  equal  to  $1  per bushel for each bushel of
21             soybeans in excess of  the  maximum  allowable  open
22             position  limits  and  50  cents  per bushel of each
23             bushel for all other grain in excess of the  maximum
24             allowable  open position limits or $5,000, whichever
25             is greater; and
26                  (B)  pay a penalty in the amount of $750 $500.
27             (3)  If a licensee commits 3 or more  violations  as
28        set forth in item (a)(1) of Section 15-10 within a 5 year
29        period, the licensee must:
30                  (A)  post  collateral with the Department in an
31             amount equal to $2 per bushel  for  each  bushel  of
32             soybeans  in  excess  of  the maximum allowable open
33             position limits and $1 per bushel of each bushel for
34             all other grain in excess of the  maximum  allowable
 
                            -59-     LRB093 03693 BDD 17074 a
 1             open   position  limits  or  $10,000,  whichever  is
 2             greater; and
 3                  (B)  pay a penalty in an  amount  greater  than
 4             $2,000 $1,000 but less than $20,000 $10,000.
 5        (b)  Violations of maximum allowable open position limits
 6    that  equal  or  exceed  twice  the  maximum  allowable  open
 7    position.
 8             (1)  If  a  licensee  violates the maximum allowable
 9        open position limits of item (a)(2) of Section 10-10  and
10        the  open  position  equals  or exceeds twice the maximum
11        allowable open position limits, the licensee must:
12                  (A)  post collateral with the Department in  an
13             amount  equal  to  $1  per bushel for each bushel of
14             soybeans in excess of  the  maximum  allowable  open
15             position  and 50 cents per bushel for each bushel of
16             all other grain in excess of the  maximum  allowable
17             open   position   limits  or  $5,000,  whichever  is
18             greater; and
19                  (B)  pay a penalty in the amount of $500.00.
20             (2)  If a licensee commits 2 violations as set forth
21        in item (b)(1) of Section 15-10 within a 2  year  period,
22        the licensee must:
23                  (A)  post  collateral with the Department in an
24             amount equal to $2 per bushel  for  each  bushel  of
25             soybeans  in  excess  of  the maximum allowable open
26             position limits and $1 per bushel for each bushel of
27             all other grain in excess of the  maximum  allowable
28             open  position  limits  or    $10,000,  whichever is
29             greater; and
30                  (B)  pay a penalty in an  amount  greater  than
31             $750 $500 but less than $15,000 $10,000.
32             (3)  If  a  licensee commits 3 or more violations as
33        set forth in item (b)(1) of Section 15-5 within a 5  year
34        period, the licensee must:
 
                            -60-     LRB093 03693 BDD 17074 a
 1                  (A)  post  collateral with the Department in an
 2             amount equal to $2 per bushel  for  each  bushel  of
 3             soybeans  in  excess  of  the maximum allowable open
 4             position limits and $1 per bushel  for  each  bushel
 5             for  all  other  grain  in  excess  of  the  maximum
 6             allowable open position limits or $10,000, whichever
 7             is greater; and
 8                  (B)  pay  a  penalty  in an amount greater than
 9             $2,000 $1,000 but less than $20,000 $10,000.
10    (Source: P.A. 89-287, eff. 1-1-96.)

11        (240 ILCS 40/15-20)
12        Sec. 15-20.  Grain quantity and grain quality violations.
13        (a)  Grain quantity deficiencies of more than $1,000  but
14    less than $20,000.
15             (1)  If  a  licensee  fails  to  have  a  sufficient
16        quantity  of  grain  in store to meet outstanding storage
17        obligations  and  the  value  of   the   grain   quantity
18        deficiency  as  determined  by  the  formula set forth in
19        subsection (c) of Section 15-20 is more than  $1,000  but
20        less than $20,000, the licensee must:
21                  (A)  post  collateral with the Department in an
22             amount equal to the  value  of  the  grain  quantity
23             deficiency or $2,500, whichever is greater; and
24                  (B)  pay a penalty of $250.
25             (2)  If a licensee commits 2 violations as set forth
26        in  item  (a)(1) of Section 15-20 within a 2 year period,
27        the licensee must:
28                  (A)  post collateral with the Department in  an
29             amount  equal  to  the  value  of the grain quantity
30             deficiency or $10,000, whichever is greater; and
31                  (B)  pay a penalty of $750 $500.
32             (3)  If a licensee commits 3 or more  violations  as
33        set forth in item (a)(1) of Section 15-20 within a 5 year
 
                            -61-     LRB093 03693 BDD 17074 a
 1        period, the licensee must:
 2                  (A)  post  collateral with the Department in an
 3             amount equal to the  value  of  the  grain  quantity
 4             deficiency or $20,000, whichever is greater; and
 5                  (B)  pay  a  penalty  of  no  less  than $2,000
 6             $1,000 and no greater than $20,000 $10,000.
 7        (b)  Grain quantity deficiencies of $20,000 or more.
 8             (1)  If a licensee fails to have sufficient quantity
 9        of grain in store to meet outstanding storage obligations
10        and  the  value  of  the  grain  quantity  deficiency  as
11        determined by the formula set forth in subsection (c)  of
12        Section  15-20  equals  or  exceeds $20,000, the licensee
13        must:
14                  (A)  post collateral with the Department in  an
15             amount  equal  to  twice  the  value  of  the  grain
16             quantity deficiency; and
17                  (B)  pay a penalty of $500.
18             (2)  If a licensee commits 2 violations as set forth
19        in  item  (b)(1) of Section 15-20 within a 2 year period,
20        the licensee must:
21                  (A)  post collateral with the Department in  an
22             amount  equal  to  twice  the  value  of  the  grain
23             quantity   deficiency   or   $20,000,  whichever  is
24             greater; and
25                  (B)  pay a penalty of no less  than  $750  $500
26             and no greater than $15,000 $10,000.
27             (3)  If  a  licensee commits 3 or more violations as
28        set forth in item (b)(1) of Section 15-20 within a 5 year
29        period, the licensee must:
30                  (A)  post collateral with the Department in  an
31             amount  equal  to  twice  the  value  of  the  grain
32             quantity   deficiency   or   $40,000,  whichever  is
33             greater; and
34                  (B)  pay a  penalty  of  no  less  than  $2,000
 
                            -62-     LRB093 03693 BDD 17074 a
 1             $1,000 and no greater than $20,000 $10,000.
 2        (c)  To   determine  the  value  of  the  grain  quantity
 3    deficiency for the purposes of this Section, the  rate  shall
 4    be $1 per bushel for soybeans and 50 cents per bushel for all
 5    other grains.
 6        (d)  If  a  licensee  fails to have sufficient quality of
 7    grain in store to meet outstanding storage  obligations  when
 8    the value of the grain quality deficiency exceeds $1,000, the
 9    licensee  must  post  collateral  with  the  Department in an
10    amount equal to the value of the  grain  quality  deficiency.
11    For  the  purposes  of  this  Section, the value of the grain
12    quality deficiency shall be determined by applying prevailing
13    market discount factors to all grain quality factors.
14    (Source: P.A. 89-287, eff. 1-1-96; 89-463, eff. 5-31-96.)

15        (240 ILCS 40/15-30)
16        Sec. 15-30.  Financial and record  keeping  deficiencies;
17    collateral and guarantees.
18        (a)  An   applicant   or   a  licensee  has  a  financial
19    deficiency  if  it  does  not  meet  the  minimum   financial
20    requirements  of  Section  5-25 and subsection (b) of Section
21    10-15 of this Code.
22        (b)  A  licensee   must   collateralize   all   financial
23    deficiencies  at the rate of one dollar's worth of collateral
24    for each dollar of the aggregate sum of the individual  ratio
25    deficiencies,  the  net  worth  deficiencies,  and  90% asset
26    requirement deficiencies.
27        (c)  A licensee who  is  found  to  have  record  keeping
28    deficiencies,  other  than  in reference to violations as set
29    forth in subsection (b) of  Section  10-15  and  in  Sections
30    15-15  and  15-20,  may be required by the Department to post
31    collateral up to the amount of $10,000.
32        (d)  If an applicant for a new license or a renewal of  a
33    license  has  financial  deficiencies  or  the Department has
 
                            -63-     LRB093 03693 BDD 17074 a
 1    reason  to  believe  that  the  financial  stability  of   an
 2    applicant  or  a  licensee is in question, the Department may
 3    require the applicant or licensee to provide the  Department,
 4    in  addition  to  collateral,  personal,  corporate, or other
 5    related  person  guarantees  in  a  form  and  in  an  amount
 6    satisfactory to the Department.
 7        (e)  Subject to  subsection  (c)  of  Section  5-15,  the
 8    posting of collateral and the delivery of guarantees does not
 9    relieve  a licensee of the continuing obligation to otherwise
10    comply with the requirements imposed by the Code.
11    (Source: P.A. 89-287, eff. 1-1-96.)

12        (240 ILCS 40/15-35)
13        Sec. 15-35.  Return of collateral and guarantees.  If the
14    next fiscal year's financial statement of a licensee received
15    by  the  Department  and  an  examination  performed  by  the
16    Department  after  delivery  or  posting  of   any   required
17    collateral  or  the  guarantee  indicates  compliance  by the
18    licensee with all statutory requirements  of  this  Code  for
19    which  the  collateral  and  guarantees  were  required,  the
20    collateral  and  guarantee shall be returned within 90 days a
21    reasonable period of time to the licensee and  the  guarantor
22    following  a  written  request for the return.  The financial
23    statement must comply with the requirements of Section 5-20.
24    (Source: P.A. 89-287, eff. 1-1-96.)

25        (240 ILCS 40/15-40)
26        Sec. 15-40.  Suspension and revocation of license.
27        (a)  The  Director  may  suspend  a  license   and   take
28    possession  and control of all grain assets and equity assets
29    (except that the  Department  may  not  take  possession  and
30    control  of  any equity asset on which there is a valid prior
31    perfected security interest or other  valid  prior  perfected
32    lien  without  the  prior,  written permission of the secured
 
                            -64-     LRB093 03693 BDD 17074 a
 1    party or lien  holder)  of  the  suspended  licensee  if  the
 2    Department  has  reason  to believe that any of the following
 3    has occurred:
 4             (1)  A licensee has made  a  formal  declaration  of
 5        insolvency;  failed to apply for license renewal, leaving
 6        indebtedness to  claimants;  or  been  denied  a  license
 7        renewal,  leaving indebtedness to claimants experienced a
 8        failure or is unable to financially satisfy claimants  in
 9        accordance with applicable statute, rule, or agreement if
10        a  bona  fide dispute does not exist between the licensee
11        and a claimant.
12             (2)  A licensee has failed to  pay  a  producer,  on
13        demand,  for grain purchased from that producer, assuming
14        no bona fide dispute exists with regard to the payment.
15             (3)  A licensee is otherwise unable  to  financially
16        satisfy  claimants  in  accordance  with  any  applicable
17        statute, rule, or agreement, assuming a bona fide dispute
18        does not exist between the licensee and the claimant.
19             (4)  A  licensee  has  violated  any  of  the  other
20        provisions of this Code and the violation, or the pattern
21        of  the  violations,  would  create a substantial risk of
22        failure violated any of the provisions of this  Code  and
23        the  violation or the pattern of the violations indicates
24        an immediate danger of loss to potential claimants.
25             (5) (3)  A  licensee  has  failed  fails  to  pay  a
26        penalty or post  collateral or  guarantees  by  the  date
27        ordered by the Director.
28             (6) (4)  A  licensee  has  failed  fails  to  pay an
29        assessment as required by Section 5-30.
30        (b)  The Director may revoke a  license  if  any  of  the
31    following   occurs:   (1)  the   Director   finds,  after  an
32    administrative  hearing,  that  any  of   the   grounds   for
33    suspension  under  item  (a)(1),  (a)(2),  (a)(3), or (a)(4),
34    (a)(5), or (a)(6) of Section 15-40 have occurred.
 
                            -65-     LRB093 03693 BDD 17074 a
 1        (c) (2)  When a licensee voluntarily files for bankruptcy
 2    under the federal bankruptcy laws, that filing constitutes  a
 3    revocation of the license of the licensee on the day that the
 4    filing occurs.
 5        (d) (3)  When an order for relief is entered in reference
 6    to  a licensee as a consequence of a petition for involuntary
 7    bankruptcy filed under  the  federal  bankruptcy  laws,  that
 8    order  constitutes a revocation of the license on the date of
 9    that order.
10        (e) (c)   Within 10 days after suspension of  a  license,
11    an  administrative  hearing  shall  be commenced to determine
12    whether the license shall be reinstated or revoked.  Whenever
13    an administrative hearing is scheduled, the licensee shall be
14    served with written notice of the date, place,  and  time  of
15    the  hearing  at  least  5 days before the hearing date.  The
16    notice may be served by personal service on the  licensee  or
17    by mailing it by registered or certified mail, return receipt
18    requested, to the licensee's place of business.  The Director
19    may,  after  a  hearing,  issue  an  order either revoking or
20    reinstating the license.
21    (Source: P.A. 89-287, eff. 1-1-96.)

22        (240 ILCS 40/15-45)
23        Sec. 15-45.  Criminal offenses.
24        (a)  A person who causes a warehouse receipt for grain to
25    be issued knowing that the grain  for  which  that  warehouse
26    receipt  is issued is not under the licensee's control at the
27    time of issuing that  warehouse  receipt,  or  who  causes  a
28    licensee  to issue a warehouse receipt for grain knowing that
29    the warehouse receipt contains any false  representation,  is
30    guilty of a Class 2 3 felony.
31        (b)  A   person   who,   knowingly   and  without  lawful
32    authority,  disposes  of  grain  represented  by  outstanding
33    warehouse  receipts  or  covered   by   unreceipted   storage
 
                            -66-     LRB093 03693 BDD 17074 a
 1    obligations is guilty of a Class 2 3 felony.
 2        (c)  A   person   who,   knowingly   and  without  lawful
 3    authority:
 4             (1)  withholds records from the Department;
 5             (2)  keeps, creates, or files  with  the  Department
 6        false, misleading, or inaccurate records;
 7             (3)  alters   records   without  permission  of  the
 8        Department; or
 9             (4)  presents to the Department any materially false
10        or misleading records;
11    is guilty of a Class 2 3 felony.
12        (d)  A licensee who, after suspension  or  revocation  of
13    its license, knowingly and without legal authority refuses to
14    surrender  to the Department all books, accounts, and records
15    relating to the  licensee  that  are  in  its  possession  or
16    control is guilty of a Class 2 3 felony.
17        (e)  A   licensee   who   knowingly  impedes,  obstructs,
18    hinders, or otherwise prevents or  attempts  to  prevent  the
19    Director  from  performing his or her duties under this Code,
20    or  who  knowingly  refuses  to  permit  inspection  of   its
21    premises,  books,  accounts, or records by the Department, is
22    guilty of a Class A misdemeanor.
23        (f)  A person  who,  knowingly  and  without  a  license,
24    engages  in  the business of a grain dealer or a warehouseman
25    for which a license is required under the Code is guilty of a
26    Class A misdemeanor.
27        (g)  A person who, intentionally, knowingly  and  without
28    lawful authority:
29             (1)  fails to maintain sufficient assets as required
30        by subsection (b) of Section 10-15; or
31             (2)  issues  a collateral warehouse receipt covering
32        grain purchased by a price later contract to  the  extent
33        the purchase price has not been paid by the grain dealer;
34    is guilty of a Class 3 4 felony.
 
                            -67-     LRB093 03693 BDD 17074 a
 1        (h)  In  case  of  a  continuing  violation,  each  day a
 2    violation occurs constitutes a separate and distinct offense.
 3    (Source: P.A. 89-287, eff. 1-1-96.)

 4        (240 ILCS 40/20-10)
 5        Sec. 20-10.  Lien on grain assets and equity assets.
 6        (a)  A statutory lien  shall  be  imposed  on  all  grain
 7    assets and equity assets in favor of and to secure payment of
 8    obligations of the licensee to:
 9             (1)  A  person,  including,  without  limitation,  a
10        lender:
11                  (A)  who  possesses  warehouse  receipts issued
12             from an Illinois warehouse location  covering  grain
13             owned or stored by a warehouseman;
14                  (B)  who   has  other  written  evidence  of  a
15             storage obligation of a warehouseman issued from  an
16             Illinois  warehouse location in favor of the holder,
17             including,  but  not  limited  to,  scale   tickets,
18             settlement sheets, and ledger cards; or
19                  (C)  who has loaned money to a warehouseman and
20             was  to receive a warehouse receipt from an Illinois
21             location as security for that loan,  who surrendered
22             warehouse receipts as a part of a grain sale  at  an
23             Illinois location, or who has delivered grain out of
24             storage  with  the warehouseman as a part of a grain
25             sale at an Illinois location and:
26                       (i)  the  grain  dealer  or   warehouseman
27                  experienced    a   failure   within   21   days
28                  thereafter, a warehouse receipt was not issued,
29                  and payment in full was not made; or
30                       (ii)  written  notice  was  given  by  the
31                  person  to  the  Department  within   21   days
32                  thereafter stating that a warehouse receipt was
33                  not issued and payment in full was not made.
 
                            -68-     LRB093 03693 BDD 17074 a
 1             (2)  A  producer  who possesses evidence of the sale
 2        at an Illinois location of grain delivered to that failed
 3        a grain dealer, or its designee, and who  was  not  fully
 4        paid in full.
 5        This statutory lien arises, attaches, and is perfected at
 6    the  date  of  delivery  of grain, and is at that time deemed
 7    assigned by the operation of this Code to the Department.
 8        (b)  The lien on grain assets created under this  Section
 9    shall  be preferred and prior to any other lien, encumbrance,
10    or security interest relating to those  assets  described  in
11    the  definition of "grain assets" in Section 1-10, regardless
12    of the  time  the  other  lien,  encumbrances,   or  security
13    interest  attached  or  became perfected.  The lien on equity
14    assets created under this Section shall also be preferred and
15    prior to any other lien, encumbrance,  or  security  interest
16    relating to "equity assets" as defined in Section 1-10 to the
17    extent a creditor does not have a valid security interest in,
18    or  other  lien  on, the property that was perfected prior to
19    the date of failure of  the  licensee.  The  lien  on  equity
20    assets   created   under  this  Section,  however,  shall  be
21    subordinate and subject to any other  lien,  encumbrance,  or
22    security  interest  relating to "equity assets" as defined in
23    Section 1-10 to the extent a creditor has  a  valid  security
24    interest  in  or  other  valid  lien on the property that was
25    perfected prior to the  date  of  failure  of  the  licensee;
26    provided,  however,  that  a creditor is not deemed to have a
27    valid security interest or other valid lien  on  property  if
28    (i)  the  property  can  be directly traced as being from the
29    sale of grain by the licensee or failed  licensee;  (ii)  the
30    security  interest  was  taken  as  additional  collateral on
31    account of an antecedent debt owed to the creditor; and (iii)
32    the security interest or other lien was perfected (A)  on  or
33    within  90 days before the date of failure of the licensee or
34    (B) when the creditor is a related person, within one year of
 
                            -69-     LRB093 03693 BDD 17074 a
 1    the date of failure of the licensee.
 2        (c)  To the extent any portion  of  this  Code  conflicts
 3    with   any  portion  of  the  Uniform  Commercial  Code,  the
 4    provisions of this Code control.
 5        (d)  If an adversarial proceeding is commenced to recover
 6    "grain assets" or "equity assets" upon which a  lien  created
 7    under  this Section is imposed and if the Department declines
 8    to take part in that adversarial proceeding, the  Department,
 9    upon  application  to  the  Director  by  any claimant, shall
10    assign to the claimant  the  statutory  lien  to  permit  the
11    claimant  to  pursue  the lien in the adversarial proceeding,
12    but only if the assignment and  adversarial  proceeding  will
13    not  delay  the  Department's liquidation and distribution of
14    grain assets,  equity  assets,  collateral,  and  guarantees,
15    including  proceeds  thereof,  to all claimants holding valid
16    claims.
17    (Source: P.A. 89-287, eff. 1-1-96.)

18        (240 ILCS 40/20-15)
19        Sec. 20-15.  Liquidation  procedures.   When  a  licensee
20    experiences  a  failure,  the Department has the authority to
21    and shall:
22        (a)  Immediately post notice  at  all  locations  of  the
23    failed  licensee  stating that the licensee has experienced a
24    failure and that the license has been terminated  and  is  no
25    longer effective.
26        (b)  Immediately  take physical control and possession of
27    the failed licensee's facility, including but not limited  to
28    all offices and grain storage facilities, books, records, and
29    any  other property necessary or desirable to liquidate grain
30    assets and equity assets.
31        (c)  Give public notice and notify  all  known  potential
32    claimants by certified mail of the licensee's failure and the
33    processes  necessary to file grain claims with the Department
 
                            -70-     LRB093 03693 BDD 17074 a
 1    as set forth in Section 25-5.
 2        (d)  Perform an examination of the failed licensee.
 3        (e)  Seize and take possession  of,  protect,  liquidate,
 4    and collect upon all grain assets, collateral, and guarantees
 5    of  or  relating  to  the  failed  licensee  and  deposit the
 6    proceeds into the Trust Account. If at any time  it  appears,
 7    however,  in the judgment of the Department that the costs of
 8    seizing and taking possession  of,  protecting,  liquidating,
 9    and   collecting  upon  any  or  all  of  the  grain  assets,
10    collateral, and guarantees equals  or  exceeds  the  expected
11    recovery  to  the Department, the Department may elect not to
12    pursue  seizing  and  taking   possession   of,   protecting,
13    liquidating, and collecting upon any or all of the assets.
14        (f)  Seize,  take  possession of, protect, liquidate, and
15    collect upon the equity assets of  the  failed  licensee  and
16    deposit the proceeds into the Trust account if the Department
17    has  first  obtained  the  written  consent of all applicable
18    secured parties or lien holders, if any.  If at any  time  it
19    appears,  however, in the judgment of the Department that the
20    costs  of  seizing  and  taking  possession  of,  protecting,
21    liquidating, and collecting upon any or  all  of  the  equity
22    assets  equals  or  exceeds  the  expected  recovery  to  the
23    Department,  the  Department  may elect not to pursue seizing
24    and  taking  possession  of,  protecting,  liquidating,   and
25    collecting  upon  any  or  all  of the equity assets.  If the
26    Department does  not  otherwise  pursue  seizing  and  taking
27    possession  of,  protecting, liquidating, and collecting upon
28    any of  the  equity  assets,  the  Department  may  bring  or
29    participate  in  any  liquidation  or  collection proceedings
30    involving the applicable secured parties or other  interested
31    party,  if  any,  and  shall  have  the  rights  and remedies
32    provided by law, including the right to enforce its  lien  by
33    any available judicial procedure.
34        If  an  applicable  secured party or lien holder does not
 
                            -71-     LRB093 03693 BDD 17074 a
 1    consent to the  Department  seizing,  taking  possession  of,
 2    liquidating,  or  collecting  upon  the  equity  assets,  the
 3    secured  party  or  lien  holder  shall  have  the rights and
 4    remedies provided by law or by agreement with the licensee or
 5    failed licensee, including the right to enforce its  security
 6    interest or lien by any available judicial procedure.
 7        (g)  Make  available  on  demand to an applicable secured
 8    party or lien holder the equity  asset,  to  the  extent  the
 9    Department  seized  or otherwise gained possession or control
10    of the equity asset, but the secured  party  or  lien  holder
11    does not consent to the Department liquidating and collecting
12    upon the equity asset.
13    (Source: P.A. 89-287, eff. 1-1-96.)

14        (240 ILCS 40/20-20)
15        Sec. 20-20.  Liquidation expenses.
16        (a)  The  Trustee  shall  pay  from the Trust Account all
17    reasonable expenses incurred by the trustee on or  after  the
18    date  of  failure  in  reference  to seizing, preserving, and
19    liquidating the grain assets, equity assets, collateral,  and
20    guarantees  of  or  relating to a failed licensee, including,
21    but not limited to, the hiring of temporary field  personnel,
22    equipment   rental,  auction  expenses,  mandatory  commodity
23    check-offs, and clerical expenses.
24        (b)  Except as to claimants  holding  valid  claims,  any
25    outstanding  indebtedness  of  a  failed  licensee  that  has
26    accrued  before  the date of failure shall not be paid by the
27    Trustee and shall represent a separate cause of action of the
28    creditor against the failed licensee.
29        (c)  The Trustee shall report all expenditures paid  from
30    the Trust Account to the Corporation at least  annually.
31        (d)  To  the extent assets are available under subsection
32    (g) of Section 25-20 and upon presentation  of  documentation
33    satisfactory  to the Trustee, the Trustee shall transfer from
 
                            -72-     LRB093 03693 BDD 17074 a
 1    the Trust Account to the Regulatory Fund  an  amount  not  to
 2    exceed the expenses incurred by the Department in performance
 3    of  its duties under Article 20 of this Code, in reference to
 4    the failed licensee.
 5    (Source: P.A. 89-287, eff. 1-1-96.)

 6        (240 ILCS 40/25-5)
 7        Sec. 25-5.   Adjudication of claims.  When a licensee has
 8    experienced a  failure,  the  Department  shall  process  the
 9    claims in the following manner:
10        (a)  The  Department  shall  publish once each week for 3
11    successive  weeks  in  at  least  3  newspapers  of   general
12    circulation within the county of the licensee, and shall mail
13    or  deliver  to  each  claimant  whose  name  and post office
14    address are known or  are  reasonably  ascertainable  by  the
15    Department, a notice stating:
16             (1)  That the licensee has experienced a failure and
17        the date of that failure.
18             (2)  The  place and post office address where claims
19        may be filed.
20             (3)  The procedure for filing claims, as  determined
21        by rule.
22             (4)  That a claimant's claims shall be barred if not
23        filed with the Department on or before the later of:
24                  (A)  the  claim  date,  which  shall be 90 days
25             after the date of failure of the licensee; or
26                  (B)  7 days from the date notice was mailed  to
27             a  claimant  if  the  date notice was mailed to that
28             claimant is on or before the claim date.
29        (b)  Time of notice.
30             (1)  The first date of publication of the notice  as
31        provided  for  in subsection (a) of this Section shall be
32        within 30 days after the date of failure.
33             (2)  The  published  notice  as  provided   for   in
 
                            -73-     LRB093 03693 BDD 17074 a
 1        subsection  (a)  of this Section shall be published in at
 2        least 3 newspapers of general  circulation  in  the  area
 3        formerly served by the failed licensee.
 4             (3)  The notice as provided for in subsection (a) of
 5        this  Section  shall  be mailed by certified mail, return
 6        receipt requested, within  60  days  after  the  date  of
 7        failure  to  each  claimant  whose  name  and post office
 8        address are known by the Department within 60 days  after
 9        the date of failure.
10        (c)  Every  claim filed must be in writing, and verified,
11    and signed by a person who has the legal authority to file  a
12    claim  on  behalf  of the claimant and must state information
13    sufficient to notify the Department  of  the  nature  of  the
14    claim and the amount sought.
15        (d)  A  claim  shall  be  barred  and  disallowed  in its
16    entirety if:
17             (1)  notice is published and given to  the  claimant
18        as  provided  for  in  subsections  (a)  and  (b) of this
19        Section and the claimant does not file a claim  with  the
20        Department on or before the claim date; or
21             (2)  the  claimant's  name or post office address is
22        not known by the Department or  cannot,  within  60  days
23        after  the  date of failure, be reasonably ascertained by
24        the Department and the claimant does  not  file  a  claim
25        with  the  Department on or before the later of the claim
26        date or 7 days after the date notice was mailed  to  that
27        claimant  if  the date notice was mailed to that claimant
28        is on or before the claim date.
29        (e)  Subsequent notice.
30             (1)  If, more than 60 days after the date of failure
31        but before the claim date, the Department learns  of  the
32        name  and  post  office  address  of  a  claimant who was
33        previously not notified by the Department  by  mail,  the
34        Department  shall  mail by certified mail, return receipt
 
                            -74-     LRB093 03693 BDD 17074 a
 1        requested, the notice to the claimant as provided for  in
 2        subsection (a) of this Section.
 3             (2)  The  notice  mailed  as  provided  for  in item
 4        (e)(1) of this Section shall not  extend  the  period  of
 5        time  in  which  a claimant may file its claim beyond the
 6        claim date. A claimant to whom  notice  is  mailed  under
 7        item  (e)(1)  of  this  Section,  however, shall have the
 8        later of the claim date or 7 days after the  date  notice
 9        was mailed to file a claim with the Department.
10        (f)  The   Department   shall   determine  the  validity,
11    category, and amount of each claim within 120 days after  the
12    date  of  failure  of  the  licensee and. (g)  The Department
13    shall give written notice within that  time  period  to  each
14    claimant  and  to  the  failed  licensee  of the Department's
15    determination as to the validity,  category,  and  amount  of
16    each claim.
17        (g) (h)  A  claimant or the failed licensee may request a
18    hearing on the  Department's  determination  within  30  days
19    after  receipt of the written notice and the hearing shall be
20    held in the county  of  residence  of  the  claimant  and  in
21    accordance  with  rules. Under no circumstances shall payment
22    to claimants who have not requested a hearing be  delayed  by
23    reason  of  the  request  for  a  hearing  by  any  unrelated
24    claimant.
25        (h)  Within  30  days  after a failure of a licensee, the
26    Director shall appoint an Administrative Law  Judge  for  the
27    hearings.   The  Director  shall appoint a person licensed to
28    practice  law  in  this  State;  who  is   believed   to   be
29    knowledgeable  with  regard  to  agriculture  and  the  grain
30    industry  in  Illinois;  who has no conflict of interest; and
31    who at the time of his or her appointment is not working  for
32    or employed by the Department in any capacity whatsoever.
33        (i)  For  the  purposes  of this Article, the "reasonably
34    ascertainable"  standard  shall   be   satisfied   when   the
 
                            -75-     LRB093 03693 BDD 17074 a
 1    Department  conducts  a review of the failed licensee's books
 2    and records and an interview of office and clerical personnel
 3    of the failed licensee.
 4        (j)  It is the intent of this Act that the  time  periods
 5    and  deadlines in this Section 25-5 are absolute, and are not
 6    to be tolled, or their operation halted or  delayed.  In  the
 7    event  of a bankruptcy by a licensee, the Director shall seek
 8    to have commenced any  proceedings  that  are  necessary  and
 9    appropriate  to  lift the automatic stay or make it otherwise
10    inapplicable to the actions of the Department with regard  to
11    the  claims  determination  process.  In all other cases, the
12    Department shall  seek  to  have  commenced  the  proceedings
13    necessary  to  expeditiously  remove or lift any order of any
14    court or administrative agency that might  attempt  to  delay
15    the  time  periods  and  deadlines  contained in this Section
16    25-5.
17    (Source: P.A. 89-287, eff. 1-1-96.)

18        (240 ILCS 40/25-10)
19        Sec. 25-10.  Claimant compensation.  Within 30 days after
20    the day on which a claim becomes a valid  claim,  a  claimant
21    shall  be  compensated  to  the  extent of its valid claim as
22    provided in this Section.
23        It is the express intent of this  legislation  that  each
24    undisputed  portion  of  a  claim shall be paid in accordance
25    with the deadlines of this Code, even if there  are  disputed
26    portions  of  the  claim.  For example, the amount of a valid
27    claim calculated for an "unpriced obligation" shall  be  paid
28    to  the  claimant despite the fact that claimant additionally
29    seeks the amount for a "priced obligation".
30        Each claimant shall be compensated in accordance with the
31    following provisions:
32        (a)  Valid claims filed by warehouse claimants  shall  be
33    paid  100%  of the amount determined by the Department out of
 
                            -76-     LRB093 03693 BDD 17074 a
 1    the net proceeds of the liquidation of grain  assets  as  set
 2    forth in this subsection (a).  To the extent the net proceeds
 3    are insufficient, warehouse claimants shall be paid their pro
 4    rata  share  of  the net proceeds of the liquidation of grain
 5    assets and, subject to subsection (j)  of  this  Section,  an
 6    additional  amount  per claimant not to exceed the balance of
 7    their respective claims out of the Fund.
 8        (b)  Subject to subsection (j) of this  Section,  if  the
 9    net  proceeds  as set forth in subsection (a) of this Section
10    are insufficient to pay in full all  valid  claims  filed  by
11    warehouse claimants as payment becomes due, the balance shall
12    be  paid out of the Fund in accordance with subsection (b) of
13    Section 25-20.
14        (c)  Valid claims filed by producers who:
15             (1)  have delivered grain within 21 days before  the
16        date  of  failure,  or  the  date  of  suspension  if the
17        suspension results in a failure,  for  which  pricing  of
18        that grain has been completed before date of failure; or
19             (2)  gave written notice to the Department within 21
20        days  of the date of delivery of grain, if the pricing of
21        that grain has been completed, that payment in  full  for
22        that grain has not been made;
23    shall  be  paid,  subject  to subsection (j) of this Section,
24    100% of the amount of  the  valid  claim  determined  by  the
25    Department.  Valid claims that are included in subsection (c)
26    of this Section shall receive no payment under subsection (d)
27    of  this Section, and any claimant having a valid claim under
28    this subsection (c) determined by the  Department  to  be  in
29    excess of the limits, if any, imposed under subsection (j) of
30    this  Section  shall  be  paid  only  sums in excess of those
31    limits to the extent  additional  money  is  available  under
32    subsection (d)(2) of Section 25-20.
33        (d)  Valid claims that are not included in subsection (c)
34    of  this  Section that are filed by producers where the later
 
                            -77-     LRB093 03693 BDD 17074 a
 1    date of completion of who completed delivery or  and  pricing
 2    of  the  grain  in reference to the valid claim, whichever is
 3    later, within 160 days before the date of  failure  shall  be
 4    paid  85%  of the amount of the valid claim determined by the
 5    Department or  $250,000  $100,000,  whichever  is  less,  per
 6    claimant.  In  computing the 160-day period, the phrase "date
 7    of completion  of  delivery"  means  the  date  of  the  last
 8    delivery  of  grain to be applied to the quantity requirement
 9    of the contract, and the phrase "the later  date"  means  the
10    date closest to the date of failure.  In addition, for claims
11    filed by producers for grain sold on a contract, however, the
12    later of the date of execution of the contract or the date of
13    delivery  of  grain  in reference to the grain covered by the
14    price later contract must not  be  more  than  365  270  days
15    before  the  date  of  failure  in  order for the claimant to
16    receive any compensation. In computing  the  365-day  period,
17    the  phrase "the later of the date" means the date closest to
18    the date of failure, and the phrase "date of delivery"  means
19    the  date  of the last delivery of grain to be applied to the
20    quantity requirement of the price later contract.
21        (e)  Valid claims filed by producers for grain sold on  a
22    price  later contract, for which the final price has not been
23    established, shall be paid 85% of the  amount  of  the  valid
24    claims  determined  by  the  Department or $250,000 $100,000,
25    whichever is less, per claimant, if the later of the date  of
26    execution of the contract or the date of delivery of grain in
27    reference  to  the  grain covered by the price later contract
28    occurred not no more than 365 270 days  before  the  date  of
29    failure.  In  computing  the  365-day period, the phrase "the
30    later of the date" means the date  closest  to  the  date  of
31    failure,  and the phrase "date of delivery" means the date of
32    the last delivery of grain to  be  applied  to  the  quantity
33    requirement of the price later contract.
34        The  execution of subsequent price later contracts by the
 
                            -78-     LRB093 03693 BDD 17074 a
 1    producer and the licensee for grain previously covered  by  a
 2    price later contract shall not extend the coverage of a claim
 3    beyond the original 365 270 days.
 4        (f)  The  maximum  payment to producers under subsections
 5    (d) and (e) of this  Section,  combined,  shall  be  $250,000
 6    $100,000 per claimant.
 7        (g)  The  following claims shall be barred and disallowed
 8    in their entirety and shall not be entitled to  any  recovery
 9    from the Fund or the Trust Account:
10             (1)  Claims  filed  by producers where both the date
11        of completion of delivery and the date of pricing of  the
12        grain are who completed pricing of the grain in reference
13        to  their  claim in excess of 160 days before the date of
14        failure.
15             (2)  Claims filed by producers for grain sold  on  a
16        price  later  contract  if  the  later  of  the  date  of
17        execution  of  the  contract  or  the date of delivery of
18        grain in reference to the  grain  covered  by  the  price
19        later contract occurred more than 365 270 days before the
20        date  of  failure.   In computing the 365-day period, the
21        phrase "the later of the date" means the date closest  to
22        the  date  of  failure, and the phrase "date of delivery"
23        means the date of  the  last  delivery  of  grain  to  be
24        applied  to  the  quantity requirement of the price later
25        contract.
26             (3)  Claims filed by any  claimant  that  are  based
27        upon  or  acquired  by  fraudulent or illegal acts of the
28        claimant.
29        (h)  To the extent moneys are available,  additional  pro
30    rata  payments  may be made to claimants under subsection (d)
31    of Section 25-20.
32        (i)  For purposes of  this  Section,  a  claim  filed  in
33    connection with warehouse receipts that are possessed under a
34    collateral  pledge  of  a  producer, or that are subject to a
 
                            -79-     LRB093 03693 BDD 17074 a
 1    perfected security interest,  or  that  were  acquired  by  a
 2    secured  party  or  lien  holder  under  an  obligation  of a
 3    producer, shall be deemed to be a claim filed by the producer
 4    and not a claim filed  by  the  secured  party  or  the  lien
 5    holder,  regardless  of  whether  the  producer is in default
 6    under that collateral pledge, security  agreement,  or  other
 7    obligation.
 8        (j)  With  respect  to  any failure occurring on or after
 9    July 1, 1998,  The  maximum  payment  out  of  the  Fund  for
10    claimants  under subsection (a), (b) of this Section shall be
11    $1,000,000 per claimant and the maximum payment  out  of  the
12    Fund  for  claimants  under  subsections (c), (d), and (e) of
13    this Section, combined, shall be $1,000,000 per claimant.
14        (j)  The amounts to be paid to warehouse valid  claimants
15    and   grain   dealer  valid  claimants  shall  be  calculated
16    according to the following:
17             (1)  Valid claimants who have warehouse  claims,  or
18        who  have  grain  dealer claims for grain sold, delivered
19        but unpriced as  of  the  date  of  failure,  shall  have
20        "unpriced  obligations",  and to determine the per bushel
21        value of these valid claims the Department shall  use  an
22        average  of  the  cash  bid prices on the date of failure
23        from grain dealers located within the market area of  the
24        failed  licensee,  and  the cash bid price offered by the
25        failed  licensee   on   the   date   of   failure,   less
26        transportation,  handling costs, and discounts applicable
27        as of that date.
28             (2)  Valid claimants who have  grain  dealer  claims
29        for  grain  sold, delivered, and priced as of the date of
30        failure shall have "priced obligations",  and  the  price
31        per bushel to be used in calculating the compensation due
32        these valid claimants shall be that which has been agreed
33        upon  by  the  failed  licensee  and  the  claimant, less
34        applicable discounts. For purposes of this  item  (2),  a
 
                            -80-     LRB093 03693 BDD 17074 a
 1        person  has  "priced"  his  or her grain if he or she has
 2        done those things necessary under the agreement  to  set,
 3        choose,  or  select  a price for any portion of the grain
 4        under the agreement, without regard to whether he or  she
 5        has  received  a check in payment for the grain, or could
 6        have received a check in payment for the grain, prior  to
 7        the failure.
 8        (k)  Arrangements   whereby  a  producer  agrees  with  a
 9    licensee to defer receipt of payment of amounts due from  the
10    sale  of  grain  are  covered  by this Code and are not to be
11    considered loans by the producer  to  the  licensee,  despite
12    payments  to the producer as an inducement for the leaving of
13    moneys with the licensee, unless the  licensee  has  executed
14    and  delivered  to  the  producer  a promissory note covering
15    those amounts.
16    (Source: P.A. 91-213, eff. 7-20-99.)

17        (240 ILCS 40/25-20)
18        Sec. 25-20.  Priorities and repayments.
19        (a)  All valid  claims  shall  be  paid  from  the  Trust
20    Account,  as  provided  in  Section  25-10,  first  from  the
21    proceeds realized from liquidation of and collection upon the
22    grain assets relating to the failed licensee, as to warehouse
23    claimants,  and  the  equity  assets as to a secured party or
24    lien holder who has consented to the  Department  liquidating
25    and  collecting  upon  the  equity  asset  as  set  forth  in
26    subsection  (f)  of  Section  20-15, and the remaining equity
27    assets, collateral, and guarantees  relating  to  the  failed
28    licensee, as to grain dealer claimants.
29        (b)  If  the  proceeds  realized  from liquidation of and
30    collection upon the grain assets, equity assets,  collateral,
31    and   guarantees   relating   to   the  failed  licensee  are
32    insufficient to pay all valid claims as provided  in  Section
33    25-10  and subsection (a) of this Section as payment on those
 
                            -81-     LRB093 03693 BDD 17074 a
 1    claims becomes due, the Director shall request from the Board
 2    sufficient funds to be transferred from the Fund to the Trust
 3    Account to pay the balance owed to  claimants  as  determined
 4    under  Section  25-10.   If a request is made by the Director
 5    for a transfer of funds to the Trust Account from  the  Fund,
 6    the  Board shall act on that request within 25 days after the
 7    date of that request.  Once moneys are transferred  from  the
 8    Fund to the Trust Account, the Director shall pay the balance
 9    owed to claimants in accordance with Section 25-10.
10        (c)  Net proceeds from liquidation of grain assets as set
11    forth  in  subsection  (a)  of  Section 25-10 received by the
12    Department, to the  extent  not  already  paid  to  warehouse
13    claimants, shall be prorated among the fund and all warehouse
14    claimants who have not had their valid claims paid in full.
15             (1)  The  pro rata distribution to the Fund shall be
16        based upon the  total  amount  of  valid  claims  of  all
17        warehouse  claimants who have had their valid claims paid
18        in full.  The pro rata  distribution  to  each  warehouse
19        claimant  who has not had his or her valid claims paid in
20        full shall  be  based  upon  the  total  amount  of  that
21        claimant's original valid claims.
22             (2)  If  the  net  proceeds  from the liquidation of
23        grain assets as set forth in subsection  (a)  of  Section
24        25-10  exceed  all  amounts  needed  to satisfy all valid
25        claims  filed  by  warehouse   claimants,   the   balance
26        remaining  shall be paid into the Trust Account or as set
27        forth in subsection (h).
28        (d)  Subject to subsections (c) and (h):
29             (1)  The proceeds realized from liquidation  of  and
30        collection   upon   the   grain  assets,  equity  assets,
31        collateral,  and  guarantees  relating  to   the   failed
32        licensee  or  any  other  assets  relating  to the failed
33        licensee that are received  by  the  Department,  to  the
34        extent not already paid to claimants, shall be first used
 
                            -82-     LRB093 03693 BDD 17074 a
 1        to  repay  the  Fund  for moneys transferred to the Trust
 2        Account.
 3             (2)  After the Fund is repaid in full for the moneys
 4        transferred from it to pay the valid claims in  reference
 5        to  a  failed  licensee,  any remaining proceeds realized
 6        from liquidation of and collection upon the grain assets,
 7        equity assets, collateral, and guarantees relating to the
 8        failed licensee thereafter  received  by  the  Department
 9        shall  be  prorated to the claimants holding valid claims
10        who have not received 100% of the amount of  their  valid
11        claims  based  upon  the  unpaid  amount  of  their valid
12        claims.
13        (e)  After all claimants have received 100% of the amount
14    of their valid claims, to the  extent  moneys  are  available
15    interest  at  the  rate of 6% per annum shall be assessed and
16    paid to the Fund on all moneys transferred from the  Fund  to
17    the Trust Account.
18        (f)  After  the  Fund is paid the interest as provided in
19    subsection (e) of this Section, then those claims barred  and
20    disallowed  under  subsection  (g)  of Section 25-10 shall be
21    paid on a pro rata basis only to the extent that  moneys  are
22    available.
23        (g)  Once  all  claims  become valid claims and have been
24    paid in full and all interest as provided in  subsection  (e)
25    of  this  Section is paid in full, and all claims are paid in
26    full under subsection (f), any remaining grain assets, equity
27    assets, collateral, and guarantees, and the proceeds realized
28    from liquidation of and collection  upon  the  grain  assets,
29    equity  assets,  collateral,  and  guarantees relating to the
30    failed licensee, shall be returned to the failed licensee  or
31    its  assignee,  or  as  otherwise  directed  by  a  court  of
32    competent jurisdiction.
33        (h)  If  amounts  in the Fund are insufficient to pay all
34    valid claims, the Corporation shall transfer from the Reserve
 
                            -83-     LRB093 03693 BDD 17074 a
 1    Fund to the Fund amounts  sufficient  to  satisfy  the  valid
 2    claims,  and  to  the extent the amounts thus transferred are
 3    insufficient to pay all valid claims,  the  General  Assembly
 4    shall  appropriate  to  the Corporation amounts sufficient to
 5    satisfy the valid claims.  If  for  any  reason  the  General
 6    Assembly   fails   to   make   an  appropriation  to  satisfy
 7    outstanding  valid   claims,   this   Code   constitutes   an
 8    irrevocable  and  continuing  appropriation  of  all  amounts
 9    necessary for that purpose and the irrevocable and continuing
10    authority  for  and direction to the State Comptroller and to
11    the State Treasurer  to  make  the  necessary  transfers  and
12    disbursements  from  the  revenues and funds of the State for
13    that purpose.  Subject to payments to warehouse claimants  as
14    set forth in subsection (c) of Section 25-20, the State shall
15    be first reimbursed, and the Reserve Fund shall thereafter be
16    reimbursed  to  the extent needed to restore the Reserve Fund
17    to a level of $2,000,000 of principal (not  including  income
18    on  the  assets  in the Reserve Fund) as soon as funds become
19    available for any amounts paid under subsection (g)  of  this
20    Section upon replenishment of the Fund from assessments under
21    subsections  subsection (d), (f), and (g) of Section 5-30 and
22    collection upon grain assets, equity assets, collateral,  and
23    guarantees relating to the failed licensee.
24        (i)  The  Department shall have those rights of equitable
25    subrogation which may result from a claimant  receiving  from
26    the  Fund  payment  in  full of the obligations of the failed
27    licensee to the claimant.
28    (Source: P.A. 91-213, eff. 7-20-99.)

29        (240 ILCS 40/30-5)
30        Sec. 30-5.  Illinois Grain Insurance Corporation.
31        (a)  The Corporation is  a  political  subdivision,  body
32    politic,  and public corporation. The governing powers of the
33    Corporation are vested in the Board of Directors composed  of
 
                            -84-     LRB093 03693 BDD 17074 a
 1    the  Director,  who  shall personally serve as president; the
 2    Attorney General or his or her designee, who shall  serve  as
 3    secretary;  the  State  Treasurer or his or her designee, who
 4    shall serve as treasurer; the Director of the  Department  of
 5    Insurance  or  his  or  her  designee;  and  the chief fiscal
 6    officer  of  the  Department.  Three  members  of  the  Board
 7    constitute a quorum at any meeting  of  the  Board,  and  the
 8    affirmative  vote  of  3  members is necessary for any action
 9    taken by the Board at a meeting, except that a lesser  number
10    may  adjourn  a  meeting from time to time.  A vacancy in the
11    membership of the Board does not impair the right of a quorum
12    to exercise all the rights and perform all the duties of  the
13    Board and Corporation.
14        (b)  The  Corporation  has the following powers, together
15    with all powers incidental or necessary to the  discharge  of
16    those powers in corporate form:
17             (1)  To  have  perpetual succession by its corporate
18        name as a corporate body.
19             (2)  To  adopt,  alter,  and  repeal   bylaws,   not
20        inconsistent  with  the  provisions of this Code, for the
21        regulation and conduct of its affairs and business.
22             (3)  To adopt and make use of a corporate  seal  and
23        to alter the seal at pleasure.
24             (4)  To  avail  itself  of  the  use of information,
25        services, facilities,  and  employees  of  the  State  of
26        Illinois in carrying out the provisions of this Code.
27             (5)  To  receive  funds,  printer registration fees,
28        and penalties assessed by the Department under this Code.
29             (6)  To administer the Fund by  investing  funds  of
30        the  Corporation  that  the  Board  may determine are not
31        presently needed for its corporate purposes.
32             (7)  To receive funds from the  Trust   Account  for
33        deposit into the  Fund.
34             (8)  Upon  the  request  of  the  Director,  to make
 
                            -85-     LRB093 03693 BDD 17074 a
 1        payment from the Fund and the Reserve Fund to  the  Trust
 2        Account when payment is necessary to compensate claimants
 3        in accordance with the provisions of Section 25-20 or for
 4        payment  of  refunds  to licensees in accordance with the
 5        provisions of this Code.
 6             (9)  To authorize, receive, and  disburse  funds  by
 7        electronic means.
 8             (10)  To  make  any inquiry and investigation deemed
 9        appropriate with regard to the failure of  any  licensee,
10        including  but not limited to analyzing the causes of and
11        reasons for the failure;  determining  the  adequacy  and
12        accuracy  of Department examinations and other regulatory
13        measures  with  regard  to  the  failed   licensee;   and
14        analyzing  whether  the  handling  of the liquidation and
15        payment process by the Department was done  in  a  manner
16        that   served   the  interests  of  those  persons  whose
17        interests this Code was designed to protect.
18             (11) (9)  To have those powers that are necessary or
19        appropriate for the exercise of the  powers  specifically
20        conferred  upon the Corporation and all incidental powers
21        that are customary in corporations.
22        (c)  A committee of advisors shall be created to  provide
23    technical  assistance  and advice and make recommendations to
24    the Board.  The advisory committee shall assist the board  in
25    understanding  pertinent developments in grain production and
26    marketing and the grain  industry.   The  advisory  committee
27    shall  be  composed  of  one grain producer designated by the
28    Illinois Farm Bureau; one grain producer  designated  by  the
29    Illinois  Farmers Union; one grain producer designated by the
30    Illinois  Corn  Growers  Association;  one   grain   producer
31    designated   by   the   Illinois   Soybean   Association;   2
32    representatives  of  the  grain  industry,  designated by the
33    Grain and Feed Association of Illinois; and 2 representatives
34    of the lending industry, one each designated by the  Illinois
 
                            -86-     LRB093 03693 BDD 17074 a
 1    Bankers  Association  and  the Community Bankers of Illinois.
 2    Members of the advisory committee  shall  serve  terms  of  2
 3    years  from  the  date  of their designation.  Members of the
 4    advisory  committee  shall  have  the  right  to  attend  all
 5    meetings of the Board and participate in  Board  discussions,
 6    but shall not have a vote.
 7    (Source: P.A. 91-213, eff. 7-20-99.)

 8        (240 ILCS 40/30-10)
 9        Sec. 30-10.  Participants in the Fund.
10        (a)  A  licensee  under  this  Code  is  subject  to this
11    Article and shall collect and pay assessments into  the  Fund
12    as provided in Section 5-30.
13        (b)  Except   as  provided  in  subsection  (c)  of  this
14    Section, a person engaged in the business of a  grain  dealer
15    or  warehouseman  but  not licensed under this Code shall not
16    participate in or benefit from the  Fund  and  its  claimants
17    shall not receive proceeds from the Fund.
18        (c)  Participation of federal warehousemen.
19             (1)  A  federal  warehouseman may participate in the
20        Fund.  If a federal warehouseman chooses  to  participate
21        in  the Fund, it shall to the extent permitted by federal
22        law:
23                  (A)  pay assessments into the Fund;
24                  (B)  be deemed a licensee  and  a  warehouseman
25             under this Code;
26                  (C)  be subject to this Code; and
27                  (D)  execute  a  cooperative  agreement between
28             itself and the Department.
29             (2)  The cooperative agreement shall, at a  minimum,
30        provide  each of the following to the extent permitted by
31        federal law:
32                  (A)  Authorization for the Department to obtain
33             information   about   the    federal    warehouseman
 
                            -87-     LRB093 03693 BDD 17074 a
 1             including,  but  not  limited to, bushel capacity of
 2             storage space, financial stability, and examinations
 3             performed  by  employees  of   the   United   States
 4             Department of Agriculture.
 5                  (B)  That   the  federal  warehouseman  submits
 6             itself to the jurisdiction  of  the  Department  and
 7             that  it  agrees  to be subject to and bound by this
 8             Code and deemed a licensee under this Code.
 9                  (C)  That in the event  of  a  failure  of  the
10             federal  warehouseman,  the  Department  shall  have
11             authority  to seize, liquidate, and collect upon all
12             grain assets, collateral, and guarantees relating to
13             the federal warehouseman as in the case of any other
14             licensee.
15                  (D)  Such other requirements as established  by
16             rule.
17             (3)  A federal warehouseman that participates in the
18        Fund  shall  at a minimum meet the licensing requirements
19        of this Code and shall comply with all requirements of  a
20        licensee and a warehouseman under this Code to the extent
21        permitted by federal law.
22        (d)  A federal warehouseman that participates in the Fund
23    or  a  warehouseman  that  desires to or has become a federal
24    warehouseman cannot withdraw from participation in  the  Fund
25    for  the  benefit of existing depositors until the occurrence
26    of all of the following:
27             (1)  Payment in full by the federal warehouseman or
28        withdrawing  warehouseman  of   all   assessments   under
29        subsection (a) of Section 5-30.
30             (2)  Payment in full by the federal warehouseman or
31        withdrawing  warehouseman  of  all assessments instituted
32        under subsection (d) of  Section  5-30  on  or  after  an
33        assessment  determination  date that occurs before if the
34        Fund is under $3,000,000 at any time  after  the  federal
 
                            -88-     LRB093 03693 BDD 17074 a
 1        warehouseman  or  withdrawing  warehouseman  notifies the
 2        Department that it desires to withdraw from participation
 3        in the Fund and before the issuance by the Department  of
 4        a certificate of withdrawal from the Fund.
 5             (3)  The  expiration  of 30 days following the later
 6        of:
 7                  (A)  the  date  the  federal  warehouseman   or
 8             withdrawing  warehouseman  has  ceased providing its
 9             depositors with coverage under the Fund;
10                  (B)  the  date  the  federal  warehouseman   or
11             withdrawing  warehouseman  has posted at each of its
12             locations  a  notice  stating  when  it  will  cease
13             providing its depositors  with  coverage  under  the
14             Fund;
15                  (C)  notification of all potential claimants by
16             the federal warehouseman or withdrawing warehouseman
17             of  the  date  on  which it will cease providing its
18             depositors with coverage under the Fund; and
19                  (D)  Completion of  an  audit  and  examination
20             satisfactory  to  the  Department as provided for in
21             this  Code  and  by  rule,  which  is  to   be   the
22             Department's final examination.
23             (4)  Obtaining   releases   of  liability  from  all
24        existing  depositors  or  posting  collateral  with   the
25        Department  for  270 days after withdrawing from the Fund
26        in  an  amount  equal  to  the  liability   to   existing
27        depositors  who  have  not  executed  releases before the
28        completion of the Department's final examination.
29             (5)  Compliance with all  notification  requirements
30        as provided for in this Code and by rule.
31             (6)  Issuance  by the Department of a certificate of
32        withdrawal from the Fund when the federal warehouseman or
33        withdrawing warehouseman has  met  all  requirements  for
34        withdrawal from participation in the Fund.
 
                            -89-     LRB093 03693 BDD 17074 a
 1        (e)  Before a federal warehouseman or a warehouseman that
 2    desires  to or has become a federal warehouseman may withdraw
 3    from participation in the Fund, it must pay for an audit  and
 4    examination  and must provide to the Department all names and
 5    addresses  of  potential  claimants  for  the   purposes   of
 6    notification of withdrawal of participation in the Fund.
 7    (Source: P.A. 89-287, eff. 1-1-96.)

 8        (240 ILCS 40/30-25 new)
 9        Sec.  30-25.  Grain  Insurance Reserve Fund. Upon payment
10    in full of all money that has been transferred  to  the  Fund
11    prior  to  June  30,  2003  from  the General Revenue Fund as
12    provided for under subsection (h) of Section 25-20, the State
13    of Illinois shall remit $2,000,000 to the Corporation  to  be
14    held  in  a  separate  and discrete account to be used to the
15    extent the assets in the Fund  are  insufficient  to  satisfy
16    claimants  as payment of their claims become due as set forth
17    in subsection (h) of Section 25-20.  The  remittance  of  the
18    $2,000,000 reserve shall be made to the Corporation within 60
19    days  of payment in full of all money transferred to the Fund
20    as set forth above in this Section 30-25. All income received
21    by the Reserve Fund shall be deposited in the Fund within  35
22    days of the end of each calendar quarter.

23        (240 ILCS 40/Art. 35 heading new)
24                     ARTICLE 35. REGULATORY FUND

25        (240 ILCS 40/35-5 new)
26        Sec. 35-5.  Regulatory Fund.
27        (a)  The  Regulatory  Fund  is created as a trust fund in
28    the  State  Treasury.  The  Regulatory  Fund  shall   receive
29    license, certificate, and extension fees under Sections 5-10,
30    5-15,  and  5-20  and  funds  under subsection (g) of Section
31    25-20 and shall pay expenses as set forth in this Article 35.
 
                            -90-     LRB093 03693 BDD 17074 a
 1        (b)  Any funds received by the  Director  under  Sections
 2    5-10,  5-15,  and 5-20 and funds disbursed for deposit to the
 3    Regulatory Fund under subsection (g) of Section  25-20  shall
 4    be  deposited  with the Treasurer as ex officio custodian and
 5    held separate and apart from any public money of this  State,
 6    with  interest  accruing  on  moneys  in  the Regulatory Fund
 7    deposited into the Regulatory  Fund.  Disbursement  from  the
 8    Fund for expenses as set forth in this Article 35 shall be by
 9    voucher ordered by the Director, accompanied by documentation
10    satisfactory  to the Treasurer and the Comptroller supporting
11    the  payment   warrant   drawn   by   the   Comptroller   and
12    countersigned by the Treasurer. Moneys in the Regulatory Fund
13    shall not be subject to appropriation by the General Assembly
14    but  shall  be  subject  to  audit  by  the  Auditor General.
15    Interest earned on moneys deposited into the Regulatory  Fund
16    shall be deposited into the Regulatory Fund.
17        (c)  Fees   deposited  into  the  Regulatory  Fund  under
18    Sections 5-10, 5-15, and 5-20 shall be expended only for  the
19    following program expenses of the Department;
20             (1)  Implementation  and  monitoring  of programs of
21        the Department  solely  under  this  Code,  including  an
22        electronic warehouse receipt program.
23             (2)  Employment  or  engagement  of certified public
24        accountants to assist  in  oversight  and  regulation  of
25        licensees  in  the  course of an intermediate or advanced
26        examination under Section 1-15.
27             (3)  Training and education of examiners  and  other
28        Department  employees in reference to Department programs
29        established to implement the Department's  duties  solely
30        under the Code.
31        (d)  Any   expenses   incurred   by   the  Department  in
32    performance of its duties under Article 20 of the Code  shall
33    be  reimbursed  to  the Department out of the net assets of a
34    liquidation to the extent available under subsection  (q)  of
 
                            -91-     LRB093 03693 BDD 17074 a
 1    Section 25-20 and shall be deposited into the Regulatory Fund
 2    and  shall  be expended solely for program expenses under the
 3    Code.

 4        Section 99.  Effective date.  This Act takes effect  upon
 5    becoming law.".