093_SB0610

 
                                     LRB093 07237 RCE 07394 b

 1        AN ACT concerning agriculture.

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

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

 9        (240 ILCS 40/1-5)
10        Sec.  1-5.  Purpose.    The   Illinois   grain   industry
11    comprises  a  significant  and  vital  part  of  the  State's
12    economy.    The  grain  industry  can function to its fullest
13    competitive and profitable potential,  thus  contributing  to
14    the  economic  health of this State, when it operates under a
15    coordinated and integrated structure.  The  purpose  of  this
16    Code is to provide a single system of governmental regulation
17    of  the  Illinois  grain  industry.   It  is also the primary
18    purpose of this  Code  to  promote  the  State's  welfare  by
19    improving  the  economic stability of agriculture through the
20    existence of the Illinois Grain Insurance Fund  in  order  to
21    protect  producers  in the event of the failure of a licensed
22    grain dealer or  licensed  warehouseman  and  to  ensure  the
23    existence  of  an  adequate  resource so that persons holding
24    valid claims may be compensated for losses occasioned by  the
25    failure  of a licensed grain dealer or licensed warehouseman.
26    To that end, this  Code  shall  be  liberally  construed  and
27    liberally  administered in favor of producers affected by the
28    failure of a licensed grain dealer or licensed warehouseman.
29        In addition, the  Illinois  grain  industry  comprises  a
30    significant and vital part of the State's economy and as such
31    can  function  to  its  fullest  competitive  and  profitable
 
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 1    potential,  thus  contributing to the economic health of this
 2    State, when it operates under a  coordinated  and  integrated
 3    regulatory structure. Thus, a further purpose of this Code is
 4    to  provide a single system of governmental regulation of the
 5    Illinois grain industry.
 6    (Source: P.A. 89-287, eff. 1-1-96.)

 7        (240 ILCS 40/1-10)
 8        Sec. 1-10.  Definitions.  As used in this Act:
 9        "Board" means the governing body of  the  Illinois  Grain
10    Insurance Corporation.
11        "Certificate"  means  a document, other than the license,
12    issued by the Department that certifies that a grain dealer's
13    license has been issued and is in effect.
14        "Claimant" means:
15        (a)  a person, including, without limitation, a lender:
16             (1)  who possesses warehouse receipts issued from an
17        Illinois location covering grain owned  or  stored  by  a
18        failed warehouseman; or
19             (2)  who  has  other  written  evidence of a storage
20        obligation  of  a  failed  warehouseman  issued  from  an
21        Illinois location in favor of the holder, including,  but
22        not  limited  to,  scale  tickets, settlement sheets, and
23        ledger cards; or
24             (3)  who has loaned money to a warehouseman and  was
25        to  receive  a  warehouse receipt issued from an Illinois
26        location as  security  for  that  loan,  who  surrendered
27        warehouse receipts as part of a grain sale at an Illinois
28        location,  or who delivered grain out of storage with the
29        warehouseman as part of  a  grain  sale  at  an  Illinois
30        location; and
31                  (i)  the  grain  dealer  or warehouseman failed
32             within  21  days  after  the  loan  of  money,   the
33             surrender  of warehouse receipts, or the delivery of
 
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 1             grain, as the case may be, and no warehouse  receipt
 2             was  issued  or  payment in full was not made on the
 3             grain sale, as the case may be; or
 4                  (ii)  written notice was given by the person to
 5             the Department within 21  days  after  the  loan  of
 6             money,  the  surrender of warehouse receipts, or the
 7             delivery of grain, as the case may be, stating  that
 8             no  warehouse  receipt was issued or payment in full
 9             made on the grain sale, as the case may be; or
10        (b)  a producer  not  included  in  item  (a)(3)  in  the
11    definition  of  "Claimant" who possesses evidence of the sale
12    at an Illinois location of grain delivered to a failed  grain
13    dealer, or its designee and who was not paid in full; or.
14        (c)  a  person  who made prepayments to a failed licensee
15    for agricultural production  inputs  (seed,  feed,  petroleum
16    products,  fertilizer, and chemicals) and, at the time of the
17    licensee's failure, had not received  possession  of  all  of
18    those prepaid agricultural production inputs.
19        "Class  I  warehouseman"  means  a  warehouseman  who  is
20    authorized  to  issue negotiable and non-negotiable warehouse
21    receipts.
22        "Class II  warehouseman"  means  a  warehouseman  who  is
23    authorized to issue only non-negotiable warehouse receipts.
24        "Code" means this the Grain Code.
25        "Collateral" means:
26        (a)  irrevocable letters of credit;
27        (b)  certificates of deposit;
28        (c)  cash or a cash equivalent; or
29        (d)  any  other  property acceptable to the Department to
30    the extent there exists equity in  that  property.   For  the
31    purposes  of  this  item (d), "equity" is the amount by which
32    the fair market value of the property exceeds the amount owed
33    to a creditor who has  a  valid,  prior,  perfected  security
34    interest  in  or  other  valid,  prior, perfected lien on the
 
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 1    property.
 2        "Corporation"  means   the   Illinois   Grain   Insurance
 3    Corporation.
 4        "Daily   position   record"   means   a  grain  inventory
 5    accountability  record  maintained  on  a  daily  basis  that
 6    includes  an  accurate  reflection  of   changes   in   grain
 7    inventory,  storage  obligations,  company-owned inventory by
 8    commodity, and other information  that  is  required  by  the
 9    Department.
10        "Daily  grain  transaction  report" means a record of the
11    daily transactions of a grain dealer showing  the  amount  of
12    all grain received and shipped during each day and the amount
13    on hand at the end of each day.
14        "Date of delivery of grain" means:
15        (a)  the  date  grain  is delivered to a grain dealer, or
16    its designee, for the purpose of sale;
17        (b)  the date grain is delivered to  a  warehouseman,  or
18    its designee for the purpose of storage; or
19        (c)  in   reference   to   grain   in   storage   with  a
20    warehouseman,  the  date  a  warehouse  receipt  representing
21    stored grain is delivered to  the  issuer  of  the  warehouse
22    receipt for the purpose of selling the stored grain or, if no
23    warehouse receipt was issued:
24             (1)  the date the purchase price for stored grain is
25        established; or
26             (2)  if  sold  by  price later contract, the date of
27        the price later contract.
28        "Department"   means   the   Illinois    Department    of
29    Agriculture.
30        "Depositor"  means a person who has evidence of a storage
31    obligation from a warehouseman.
32        "Director", unless otherwise provided, means the Illinois
33    Director of Agriculture, or the Director's designee.
34        "Electronic document" means a document that is generated,
 
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 1    sent, received, or stored by electrical,  digital,  magnetic,
 2    optical   electromagnetic,   or   any  other  similar  means,
 3    including  electronic  data  interchange,  electronic   mail,
 4    telegram, telex, or telecopy.
 5        "Electronic  warehouse receipt" means a warehouse receipt
 6    that is issued or transmitted in the form  of  an  electronic
 7    document.
 8        "Emergency  storage"  means space measured in bushels and
 9    used for a period of time not to exceed 3 months for  storage
10    of grain as a consequence of an emergency situation.
11        "Equity assets" means:
12        (a)  The equity in any property of the licensee or failed
13    licensee, other than grain assets.  For purposes of this item
14    (a):
15             (1)  "equity" is the amount by which the fair market
16        value  of  the  property  exceeds  the  amount  owed to a
17        creditor who has a valid security interest  in  or  other
18        valid  lien on the property that was perfected before the
19        date of failure of the licensee;
20             (2)  a creditor  is  not  deemed  to  have  a  valid
21        security  interest or other valid lien on property if (i)
22        the property can be directly traced  as  being  from  the
23        sale  of  grain  by the licensee or failed licensee; (ii)
24        the security interest was taken as additional  collateral
25        on  account  of  an antecedent debt owed to the creditor;
26        and  (iii)  the  security  interest  or  other  lien  was
27        perfected (A) on or within 90 days  before  the  date  of
28        failure  of  the  licensee  or (B) when the creditor is a
29        related person, within one year of the date of failure of
30        the licensee.
31        "Failure" means, in reference to a licensee:
32        (a)  a  formal declaration of insolvency;
33        (b)  a revocation of a license;
34        (c)  a failure to  apply  for  license  renewal,  leaving
 
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 1    indebtedness to claimants;
 2        (d)  a denial of license renewal, leaving indebtedness to
 3    claimants; or
 4        (e)  a   voluntary   surrender   of  a  license,  leaving
 5    indebtedness to claimants.
 6        "Federal warehouseman" means a warehouseman  licensed  by
 7    the   United   States  government  under  the  United  States
 8    Warehouse Act (7 U.S.C. 241 et seq.).
 9        "Fund" means the Illinois Grain Insurance Fund.
10        "Grain" means corn, soybeans, wheat, oats,  rye,  barley,
11    grain  sorghum, canola, buckwheat, flaxseed, edible soybeans,
12    and  other  like  agricultural  commodities   that   may   be
13    designated by rule.
14        "Grain assets" means:
15        (a)  all  grain  owned and all grain stored by a licensee
16    or failed licensee, wherever located,  including  redeposited
17    grain of a licensee or failed licensee;
18        (b)  (blank)  redeposited  grain  of a licensee or failed
19    licensee;
20        (c)  identifiable proceeds, including,  but  not  limited
21    to,  insurance  proceeds, received by or due to a licensee or
22    failed  licensee   resulting   from   the   sale,   exchange,
23    destruction, loss, or theft of grain, or other disposition of
24    grain by the licensee or failed licensee; or
25        (d)  assets  in  hedging  or  speculative margin accounts
26    held by commodity  or  security  exchanges  on  behalf  of  a
27    licensee  or  failed licensee and any moneys due or to become
28    due to a  licensee  or  failed  licensee,  less  any  secured
29    financing  directly  associated  with those assets or moneys,
30    from any transactions on those exchanges.
31        For  purposes  of  this  Act,  storage  charges,   drying
32    charges,  price  later  contract  service  charges, and other
33    grain service charges received by or due  to  a  licensee  or
34    failed  licensee  shall not be deemed to be grain assets, nor
 
                            -7-      LRB093 07237 RCE 07394 b
 1    shall such charges be deemed to be proceeds from the sale  or
 2    other  disposition  of  grain  by  a  licensee  or  a  failed
 3    licensee,  or  to  have been directly or indirectly traceable
 4    from, to have resulted from, or to have been derived in whole
 5    or in part from, or otherwise related to, the sale  or  other
 6    disposition of grain by the licensee or failed licensee.
 7        "Grain  dealer"  means  a  person  who is licensed by the
 8    Department to engage in the business  of  buying  grain  from
 9    producers.
10        "Grain  claimant"  means a person described in subsection
11    (a) or (b) of the definition of "Claimant".
12        "Grain Indemnity Trust Account"  means  a  trust  account
13    established  by  the  Director  under  Section 205-410 of the
14    Department of Agriculture Law (20 ILCS 205/205-410)  that  is
15    used for the receipt and disbursement of moneys paid from the
16    Fund and proceeds from the liquidation of and collection upon
17    grain assets, equity assets, collateral, and or guarantees of
18    or  relating  to failed licensees.  The Grain Indemnity Trust
19    Account shall be used to pay valid claims, authorized refunds
20    from  the  Fund,  and  expenses   incurred   in   preserving,
21    liquidating, and collecting upon grain assets, equity assets,
22    collateral, and guarantees relating to failed licensees.
23        "Guarantor" means a person who assumes all or part of the
24    obligations of a licensee to claimants.
25        "Guarantee"  means  a document executed by a guarantor by
26    which the guarantor assumes all or part of the obligations of
27    a licensee to claimants.
28        "Incidental  grain  dealer"  means  a  grain  dealer  who
29    purchases grain  only  in  connection  with  a  feed  milling
30    operation  and  whose total purchases of grain from producers
31    during the grain dealer's fiscal year do not exceed $100,000.
32        "Licensed  storage  capacity"  means  the  maximum  grain
33    storage  capacity  measured  in  bushels  approved   by   the
34    applicable licensing agency for use by a warehouseman.
 
                            -8-      LRB093 07237 RCE 07394 b
 1        "Licensee"  means  a  grain dealer or warehouseman who is
 2    licensed by the Department and a federal warehouseman that is
 3    a participant in the Fund, under subsection  (c)  of  Section
 4    30-10.
 5        "Official  grain  standards"  means  the  official  grade
 6    designations  as  adopted  by the United States Department of
 7    Agriculture under the United States Grain Standards  Act  and
 8    regulations adopted under that Act (7 U.S.C. 71 et seq. and 7
 9    CFR 810.201 et seq.).
10        "Permanent   storage  capacity"  means  the  capacity  of
11    permanent structures available for  storage  of  grain  on  a
12    regular and continuous basis, and measured in bushels.
13        "Person"  means  any individual or entity, including, but
14    not limited to,  a  sole  proprietorship,  a  partnership,  a
15    corporation,   a   cooperative,  an  association,  a  limited
16    liability company, an estate, or a trust, or  a  governmental
17    agency.
18        "Prepayment   claimant"   means  a  person  described  in
19    subsection (c) of the definition of "Claimant".
20        "Price later contract" means a written contract  for  the
21    sale  of  grain whereby any part of the purchase price may be
22    established by the seller after delivery of the  grain  to  a
23    grain  dealer according to a pricing formula contained in the
24    contract.  Title to the grain passes to the grain  dealer  at
25    the time of delivery.  The precise form and the general terms
26    and conditions of the contract shall be established by rule.
27        "Producer"  means  the owner, tenant, or operator of land
28    who has an interest in  and  receives  all  or  part  of  the
29    proceeds from the sale of the grain produced on the land.
30        "Producer protection holding corporation" means a holding
31    corporation  to  receive, hold title to, and liquidate assets
32    of or relating to a  failed  licensee,  including  assets  in
33    reference  to  collateral  or guarantees relating to a failed
34    licensee.
 
                            -9-      LRB093 07237 RCE 07394 b
 1        "Regulatory Fund" means the fund  created  under  Article
 2    35.
 3        "Related  persons"  means  affiliates  of a licensee, key
 4    persons of a licensee, owners of a licensee, and persons  who
 5    have  control  over  a  licensee.   For  the purposes of this
 6    definition:
 7             (a)  "Affiliate" means a person who  has  direct  or
 8        indirect  control  of  a  licensee,  is  controlled  by a
 9        licensee, or is under common control with a licensee.
10             (b)  "Key person" means an officer,  a  director,  a
11        trustee,  a  partner, a proprietor, a manager, a managing
12        agent, or the spouse of a  licensee.   An  officer  or  a
13        director  of  an  entity  organized  or  operating  as  a
14        cooperative,  however,  shall  not  be considered to be a
15        "key person".
16             (c)  "Owner" means the holder of: over  10%  of  the
17        total  combined voting power of a corporation or over 10%
18        of the total value of shares of all classes of stock of a
19        corporation; over a 10% interest in a  partnership;  over
20        10% of the value of a trust computed actuarially; or over
21        10%  of  the  legal  or  beneficial interest in any other
22        business, association, endeavor,  or  entity  that  is  a
23        licensee.  For purposes of computing these percentages, a
24        holder  is  deemed  to  own stock or other interests in a
25        business  entity  whether  the  ownership  is  direct  or
26        indirect.
27             (d)  "Control" means the power to exercise authority
28        over or direct the management or policies of  a  business
29        entity.
30             (e)  "Indirect" means an interest in a business held
31        by the holder not through the holder's actual holdings in
32        the  business,  but  through  the  holder's  holdings  in
33        another business or other businesses.
34             (f)  Notwithstanding  any  other  provision  of this
 
                            -10-     LRB093 07237 RCE 07394 b
 1        Act, the term "related person" does not include a lender,
 2        secured party, or other lien holder solely by  reason  of
 3        the existence of the loan, security interest, or lien, or
 4        solely  by  reason of the lender, secured party, or other
 5        lien holder having or  exercising  any  right  or  remedy
 6        provided  by  law  or  by  agreement with a licensee or a
 7        failed licensee.
 8        "Successor agreement"  means  an  agreement  by  which  a
 9    licensee  succeeds  to  the  grain  obligations  of  a former
10    licensee.
11        "Temporary storage space" means space measured in bushels
12    and used for 6 months or less  for  storage  of  grain  on  a
13    temporary  basis  due  to  a  need  for additional storage in
14    excess of permanent storage capacity.
15        "Trust account" means the Grain Indemnity Trust Account.
16        "Valid claim" means  a  request  for  payment  under  the
17    provisions  of  this Code claim, submitted by a claimant, the
18    whose amount and category of which have  been  determined  by
19    the  Department,  to  the  extent  that  determination is not
20    subject to further  administrative  review  or  appeal.  Each
21    grain  sale  transaction and each storage obligation shall be
22    considered a separate and discrete request for  payment  even
23    though  one  or more requests are contained on one claim form
24    or are filed with the Department in one document.
25        "Warehouse" means a building, structure, or enclosure  in
26    which  grain  is  stored  for  the  public  for compensation,
27    whether grain of different owners is  commingled  or  whether
28    identity of different lots of grain is preserved.
29        "Warehouse  receipt"  means  a receipt for the storage of
30    grain issued by a warehouseman.
31        "Warehouseman" means a person who is licensed:
32             (a)  by the Department to engage in the business  of
33        storing grain for compensation; or
34             (b)  under  the  United States Warehouse Act but who
 
                            -11-     LRB093 07237 RCE 07394 b
 1        participates in the Fund under subsection (c) of  Section
 2        30-10.
 3    (Source:  P.A.  91-213,  eff.  7-20-99;  91-239, eff. 1-1-00;
 4    92-16, eff. 6-28-01.)

 5        (240 ILCS 40/1-15)
 6        Sec. 1-15.  Powers and duties of Director.  The  Director
 7    has  all powers necessary and proper to fully and effectively
 8    execute the provisions of this Code and has the general  duty
 9    to  implement  this  Code.   The Director's powers and duties
10    include, but are not limited to, the following:
11        (1)  The Director may, upon application, issue or  refuse
12    to  issue  licenses  under  this  Code,  and the Director may
13    extend,  renew,  reinstate,  suspend,   revoke,   or   accept
14    voluntary surrender of licenses under this Code.
15        (2)  The Director shall examine and inspect each licensee
16    at least once each calendar year. The examination shall cover
17    all   aspects  of  the  grain  operations  of  the  licensee,
18    including but not necessarily limited to options  trades  and
19    programs and farmer marketing programs.
20        The   Department   shall   perform  one  of  3  types  of
21    examinations of licensees.
22             (A) Basic Examination. The basic  examination  shall
23        be  performed when the licensee's merchandising and trade
24        practices involve minimal market risk, such as  when  the
25        licensee  uses  cash  back-to-back contracts, traditional
26        hedges with the Chicago Board of Trade, and  price  later
27        contracts. This examination shall include verification of
28        quality  and  quantity of all grain recorded as stored in
29        the facilities, as reconciled  with  the  daily  position
30        record.  All  storage and contractual categories of grain
31        risk as reflected in the daily position  record  and  the
32        long and short position shall be reconciled with detailed
33        lists.   A  representative  number  of  individual  grain
 
                            -12-     LRB093 07237 RCE 07394 b
 1        transactions shall  be  examined  (reposted)  for  proper
 2        recording,  summarizing,  and  control.  Financial ratios
 3        shall  be  computed  and  evaluated.  Other   examination
 4        guidelines may be provided by rule.
 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, such as when the licensee uses guaranteed
 9        minimum  price  contracts  or  purchases  options.   This
10        examination  shall  include all those things performed as
11        part  of  the  basic  examination.   In   addition,   the
12        intermediate  examination  shall  include  a  search  for
13        unrecorded  grain transactions, which may be performed by
14        mailing of confirmations to a  representative  number  of
15        patrons  and  vendors  and  to  all  grain brokers. Grain
16        transactions shall be reviewed for  proper  authorization
17        and  likelihood  of  delivery.  All grain risk, including
18        option risk, shall be evaluated  for  proper  offsets.  A
19        determination  shall  be  made  as  to  whether there are
20        sufficient grain assets and equity assets  to  cover  all
21        grain  risk  and  whether sufficient credit resources are
22        readily available  to  support  and  sustain  grain  risk
23        positions.  Other  examination guidelines may be provided
24        by rule. If it is  determined  that  grain  risk  in  not
25        adequately  covered,  then  the  Department  may  require
26        actions  to  be  taken to establish adequate cover or may
27        require that the licensee cease and desist certain  grain
28        operations  in  order  to  reduce  that  risk; additional
29        penalties may be provided by rule.
30             (C)  Advanced Examination. The advanced  examination
31        shall  be performed when the licensee's merchandising and
32        grain trading practices involve the most  risk,  such  as
33        when  the  licensee  has  discretionary trading authority
34        from producers, uses premium offer type contracts, writes
 
                            -13-     LRB093 07237 RCE 07394 b
 1        or sells options without an exact  offset  of  risk,  has
 2        contracts  with producers that cover multiple crop years,
 3        or has any property held as collateral by the Department.
 4        This examination shall include all those things performed
 5        as part of the basic  examination  and  the  intermediate
 6        examination.  In addition, the advanced examination shall
 7        include an evaluation of all grain market  risk  compared
 8        to  financial  ability  to support that outstanding risk.
 9        Grain positions shall be evaluated for risk in excess  of
10        normal  grain  merchandising  risk.  Economic conditions,
11        management ability, credit limits, and internal  controls
12        shall  be considered in determining appropriate levels of
13        risk for the licensee. A representative number  of  grain
14        transactions  shall  be  examined to verify the existence
15        and   proper   functioning    of    internal    controls.
16        Confirmations  shall be mailed to a representative number
17        of  patrons,  vendors,  and  brokers  to  ascertain   the
18        validity  of grain transactions. A determination shall be
19        made of the probability of continued  operations  by  the
20        licensee. Other examination guidelines may be provided by
21        rule.  If  it  is determined that grain risk is excessive
22        given the licensee's financial situation or that internal
23        controls are inadequate, then the  Department  may  order
24        the  licensee  to  cease  and desist certain of its grain
25        activities in order to appropriately reduce that risk and
26        may order further internal controls. Additional penalties
27        may be provided by rule.
28        Using these guidelines, the  Department  shall  determine
29    the  level  of examination to be applied to each licensee. In
30    addition, the Department may, in its sole discretion,  engage
31    the  services  of  accounting  experts, grain risk management
32    experts, or both as part of any advanced examination, and the
33    licensee being examined shall reimburse  the  Department  for
34    all related costs.
 
                            -14-     LRB093 07237 RCE 07394 b
 1        The  Director may inspect the premises used by a licensee
 2    at any time.  The books, accounts, records, and papers  of  a
 3    licensee  are  at  all times during business hours subject to
 4    inspection by  the  Director.   Each  licensee  may  also  be
 5    required  to make reports of its activities, obligations, and
 6    transactions that are deemed necessary  by  the  Director  to
 7    determine  whether the interests of producers and the holders
 8    of  warehouse   receipts   are   adequately   protected   and
 9    safeguarded.   The  Director  may take action or issue orders
10    that in the opinion of the Director are necessary to  prevent
11    fraud  upon or discrimination against producers or depositors
12    of grain by a licensee.  The  sole  and  exclusive  means  of
13    halting the warehouse and grain dealer business activities of
14    a  licensee, however, are set forth in Section 15-40 relating
15    to suspension and revocation of licenses.
16        (3)  The Director may, upon his or her initiative or upon
17    the written verified complaint of any  person  setting  forth
18    facts  that  if proved would constitute grounds for a refusal
19    to issue or renew a license or for a suspension or revocation
20    of a license, investigate the actions of any person  applying
21    for,  holding,  or  claiming to hold a license or any related
22    party of that person.
23        (4)  The Director (but not the Director's  designee)  may
24    issue  subpoenas  and  bring before the Department any person
25    and take testimony either at an administrative hearing or  by
26    deposition with witness fees and mileage fees and in the same
27    manner  as  prescribed  in  the Code of Civil Procedure.  The
28    Director or the Director's designee may administer  oaths  to
29    witnesses at any proceeding that the Department is authorized
30    by  law  to  conduct.   The  Director (but not the Director's
31    designee) may issue subpoenas  duces  tecum  to  command  the
32    production  of  records  relating  to  a licensee, guarantor,
33    related business, related person, or related party. Subpoenas
34    are subject to the rules of the Department.
 
                            -15-     LRB093 07237 RCE 07394 b
 1        (5)  Notwithstanding   other   judicial   remedies,   the
 2    Director may file a  complaint  and  apply  for  a  temporary
 3    restraining  order  or  preliminary  or  permanent injunction
 4    restraining  or  enjoining  any  person  from  violating   or
 5    continuing to violate this Code or its rules.
 6        (6)  The  Director  shall  act  as  Trustee for the Trust
 7    Account, act as  Trustee  over  all  collateral,  guarantees,
 8    grain  assets,  and  equity assets held by the Department for
 9    the benefit of claimants, and  exercise  certain  powers  and
10    perform  related  duties  under Section 20-5 of this Code and
11    Section 205-410 of the Department of Agriculture Law (20 ILCS
12    205/205-410), except that the provisions  of  the  Trust  and
13    Trustees  Act  do not apply to the Trust Account or any other
14    trust created under this Code.
15        (7)  The Director shall personally serve as president  of
16    the Corporation.
17        (8)  The  Director shall collect and deposit all monetary
18    penalties, printer registration fees, funds, and  assessments
19    authorized under this Code into the Fund.
20        (9)  The  Director  may  initiate any action necessary to
21    pay refunds from the Fund. The Director may initiate  refunds
22    for  errors  of  assessments  that  do  not exceed $2,000 per
23    licensee or grain seller without authorization by the Board.
24        (10)  The Director shall maintain a  holding  corporation
25    to  receive,  hold  title  to,  and  liquidate  assets  of or
26    relating to a failed licensee, including assets in  reference
27    to  collateral  or  guarantees, and deposit the proceeds into
28    the Fund.
29        (11)  The  Director  may  initiate,  participate  in,  or
30    withdraw from any proceedings to liquidate and  collect  upon
31    grain  assets,  equity  assets,  collateral,  and  guarantees
32    relating to a failed licensee, including, but not limited to,
33    all  powers  needed  to  carry  out the provisions of Section
34    20-15.
 
                            -16-     LRB093 07237 RCE 07394 b
 1        (12)  The Director, as Trustee or otherwise, may take any
 2    action that may be reasonable or appropriate to enforce  this
 3    Code and its rules.
 4    (Source:  P.A.  91-213,  eff.  7-20-99;  91-239, eff. 1-1-00;
 5    92-16, eff. 6-28-01.)

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

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

30        (240 ILCS 40/5-5)
31        Sec. 5-5.   Licenses required; applications; exemptions.
 
                            -17-     LRB093 07237 RCE 07394 b
 1        (a)  Except  as  provided in subsection (e), a person may
 2    not engage in the business of buying grain from producers, or
 3    storing  grain  for  compensation,  as  a  grain  dealer,  an
 4    incidental grain dealer, or a warehouseman in  the  State  of
 5    Illinois  without  a  license issued by the Department, or in
 6    the case of a federal  warehouseman,  by  the  United  States
 7    government.
 8        (b)  An application for a license shall be filed with the
 9    Department,  shall be in a form prescribed by the Department,
10    and shall set forth the name of the applicant, the  directors
11    and  officers if the applicant is a corporation, the partners
12    if the  applicant  is  a  partnership,  the  members  of  the
13    governing body and all persons with management or supervisory
14    authority  if  the  applicant  is  an  entity  other  than  a
15    corporation  or  partnership,  the  location of the principal
16    office or place of business of the applicant in Illinois  and
17    the  location or locations in Illinois at which the applicant
18    proposes to engage in business as a licensee, the fiscal year
19    of the applicant,  the  kind  of  grain  that  the  applicant
20    proposes  to buy, handle, or store, the type of business that
21    the applicant proposes to conduct, and additional information
22    that the Department may require by rule.
23        (c)  The  application  for  a  warehouseman  shall  state
24    whether the applicant proposes to store grain only for others
25    or for the applicant and for others and shall also state  the
26    storage  capacity  for  which  the  applicant  desires  to be
27    licensed.
28        (d)  If an applicant has been engaged in  business  as  a
29    grain  dealer  for  one  year  or more, the application shall
30    state the aggregate dollar amount paid to producers for grain
31    during the applicant's last completed fiscal  year.   If  the
32    applicant has been engaged in business for less than one year
33    or  has  not  engaged  in  the  business of buying grain from
34    producers as a grain dealer, the application shall state  the
 
                            -18-     LRB093 07237 RCE 07394 b
 1    estimated aggregate dollar amount to be paid by the applicant
 2    to  producers  for  grain purchased from producers during the
 3    applicant's first fiscal year.
 4        (e)  The following persons are exempt from being licensed
 5    as a grain dealer or incidental grain dealer:
 6             (1)  A person purchasing grain from  producers  only
 7        for resale as agricultural seed.
 8             (2)  A producer purchasing grain from producers only
 9        for its own use as seed or feed.
10        Any  producer  who  purchases or intends to purchase more
11    than 100,000 bushels of grain from other producers during any
12    fiscal period, for use as feed and seed,  and  also  uses  or
13    intends to use price later contracts for any portion of those
14    purchases,  however, must provide to the Department a bond to
15    guarantee the faithful performance of its payment obligations
16    for those purchases.
17    (Source: P.A. 89-287, eff. 1-1-96.)

18        (240 ILCS 40/5-10)
19        Sec. 5-10.  Financial statement and fee  requirements  to
20    obtain or amend a license.
21        (a)  Applications for a new license to operate as a Class
22    I  warehouseman  or grain dealer shall be accompanied by each
23    of the following:
24             (1)  A financial statement made within 90 days after
25        the  applicant's  fiscal  year  end   and   prepared   in
26        conformity  with generally accepted accounting principles
27        following an examination  conducted  in  accordance  with
28        generally  accepted  auditing standards that has attached
29        the unqualified opinion, or other opinion  acceptable  to
30        the   Department,  of  an  independent  certified  public
31        accountant licensed  under  Illinois  law  or  an  entity
32        permitted  to engage in the practice of public accounting
33        under item (b)(3) of Section 14 of  the  Illinois  Public
 
                            -19-     LRB093 07237 RCE 07394 b
 1        Accounting Act.
 2                  (A)  If  the  applicant  has  been  engaged  in
 3             business  prior  to  the  application, the financial
 4             statement shall set forth the financial position and
 5             results in operations for  the  most  recent  fiscal
 6             year  of  the  applicant.   The  financial statement
 7             shall consist  of  a  balance  sheet,  statement  of
 8             income, statement of retained earnings, statement of
 9             cash flows, notes to financial statements, and other
10             information as required by the Department.
11                  (B)  If  the  applicant has not been engaged in
12             business prior to  the  application,  the  financial
13             statement shall consist of a balance sheet, notes to
14             financial   statements,  and  other  information  as
15             required by the Department.
16             (2)  An  application  fee  of  $300  $100  for  each
17        license, $100  of  which  shall  be  deposited  into  the
18        General  Revenue  Fund  and the balance of which shall be
19        deposited into the Regulatory Fund.
20             (3)  A  fee  for  each  required  certificate.   The
21        amount  of  the  fee  for  each  certificate   shall   be
22        established  by  rule.   Fees shall be deposited into the
23        Regulatory Fund.
24        (b)  Applications for a new license to operate as a Class
25    II  warehouseman  or  incidental  grain   dealer   shall   be
26    accompanied by:
27             (1)  A  financial  statement  prepared in accordance
28        with the requirements of item (a)(1) of Section 5-10  or,
29        instead, a financial statement made within 90 days of the
30        date  of  the  application  prepared  or  certified by an
31        independent accountant and verified  under  oath  by  the
32        applicant.   The  financial statement shall set forth the
33        balance sheet and other information with respect  to  the
34        financial  resources of the applicant that the Department
 
                            -20-     LRB093 07237 RCE 07394 b
 1        may require.   If  the  applicant  has  been  engaged  in
 2        business   prior   to   the  application,  the  financial
 3        statement shall also set forth a statement of  income  of
 4        the applicant.
 5             (2)  An  application  fee  of  $150  $100  for  each
 6        license,  $100  of  which  shall  be  deposited  into the
 7        General Revenue Fund and the balance of  which  shall  be
 8        deposited into the Regulatory Fund.
 9             (3)  A  fee  for  each  required  certificate.   The
10        amount   of   the  fee  for  each  certificate  shall  be
11        established by rule.  Fees shall be  deposited  into  the
12        Regulatory Fund.
13        (c)  Applications  to  amend  a  warehouseman's  licensed
14    storage  capacity,  including  applications  in  reference to
15    temporary storage and emergency storage or to otherwise amend
16    a license, shall be accompanied by a filing fee of $100,  $50
17    of which shall be deposited into the General Revenue Fund and
18    the  balance  of which shall be deposited into the Regulatory
19    Fund $50.
20    (Source: P.A. 89-287, eff. 1-1-96.)

21        (240 ILCS 40/5-15)
22        Sec. 5-15.  Renewal of license.
23        (a)  The application for renewal of a  license  shall  be
24    filed  with  the Department annually within 90 days after the
25    licensee's fiscal year end.  The Department may, upon request
26    of the licensee, payment of an extension fee of $250 $50, $50
27    of which shall be deposited into the General Revenue Fund and
28    the balance of which shall be deposited into  the  Regulatory
29    Fund,  and  delivery  to  the  Department  of  a  preliminary
30    financial  statement  compiled  reviewed  by  an  independent
31    certified public accountant licensed under Illinois law or an
32    entity   permitted  to  engage  in  the  practice  of  public
33    accounting under item (b)(3) of Section 14  of  the  Illinois
 
                            -21-     LRB093 07237 RCE 07394 b
 1    Public  Accounting  Act  or,  in  the  case  of  a  Class  II
 2    warehouseman   or  incidental  grain  dealer,  a  preliminary
 3    financial statement reviewed  by  an  independent  accountant
 4    that  meets  the  financial requirements of subsection (b) of
 5    Section 5-25, extend, for up to but not  exceeding  30  days,
 6    the  period  of time during which the application for renewal
 7    of a license may  be  filed.  The  Department,  however,  may
 8    provide  by  rule  for  reducing  the  filing  period  for an
 9    application for renewal of a license to no less than 60  days
10    after  the  licensee's  fiscal  year  end  if  the Department
11    determines that an applicant has financial  deficiencies,  or
12    there are other factors, that would create a substantial risk
13    of  failure loss to potential claimants.  The Department must
14    give written notice of  the  reduced  filing  period  to  the
15    licensee at least 60 days before the earlier deadline imposed
16    by  the  Department  to file the application for renewal of a
17    license.  Notice is deemed given  when  mailed  by  certified
18    mail,  return  receipt requested, properly addressed and with
19    sufficient postage attached.
20        (b)  The application for renewal shall be accompanied  by
21    the financial statement required by Section 5-20.
22        (c)  Failure  to  meet all of the conditions to renew the
23    license may result in a denial of renewal of the license. The
24    licensee may request an administrative hearing to dispute the
25    denial of renewal, after which the Director  shall  enter  an
26    order either renewing or refusing to renew the license.
27    (Source: P.A. 89-287, eff. 1-1-96.)

28        (240 ILCS 40/5-20)
29        Sec.  5-20.  Financial statement and fee requirements for
30    the renewal of a license.
31        (a)  Applications for a renewal of a license  to  operate
32    as   a   Class  I  warehouseman  or  grain  dealer  shall  be
33    accompanied by each of the following:
 
                            -22-     LRB093 07237 RCE 07394 b
 1             (1)  A financial statement made within 90 days after
 2        the  applicant's  fiscal  year  end   and   prepared   in
 3        conformity  with generally accepted accounting principles
 4        following an examination  conducted  in  accordance  with
 5        generally  accepted  auditing standards that has attached
 6        the unqualified opinion, or other opinion  acceptable  to
 7        the   Department,  of  an  independent  certified  public
 8        accountant licensed  under  Illinois  law  or  an  entity
 9        permitted  to engage in the practice of public accounting
10        under item (b)(3) of Section 14 of  the  Illinois  Public
11        Accounting Act.  The financial statement shall consist of
12        a  balance  sheet,  statement  of  income,  statement  of
13        retained  earnings,  statement  of  cash  flows, notes to
14        financial statements, and other information  as  required
15        by  the  Department.   The  financial statement shall set
16        forth the financial position and  results  in  operations
17        for the most recent fiscal year of the applicant.
18             (2)  A  fee  of  $300 $100 for each license, $100 of
19        which shall be deposited into the  General  Revenue  Fund
20        and  the  balance  of  which  shall be deposited into the
21        Regulatory Fund.
22             (3)  A  fee  for  each  required  certificate.   The
23        amount  of  the  fee  for  each  certificate   shall   be
24        established  by  rule.   Fees shall be deposited into the
25        Regulatory Fund.
26        (b)  Applications for a renewal of a license  to  operate
27    as  a  Class II warehouseman or incidental grain dealer shall
28    be accompanied by each of the following:
29             (1)  A financial statement  prepared  in  accordance
30        with  the requirements of item (a)(1) of Section 5-10 or,
31        instead, a financial statement made within 90 days  after
32        the  date  of the application prepared or certified by an
33        independent accountant and verified  under  oath  by  the
34        applicant.   The  financial statement shall set forth the
 
                            -23-     LRB093 07237 RCE 07394 b
 1        balance sheet and statement of income  of  the  applicant
 2        and  other  information  with  respect  to  the financial
 3        resources  of  the  applicant  that  the  Department  may
 4        require.
 5             (2)  A fee of $150 $100 for each  license,  $100  of
 6        which  shall  be  deposited into the General Revenue Fund
 7        and the balance of which  shall  be  deposited  into  the
 8        Regulatory Fund.
 9             (3)  A  fee  for  each  required  certificate.   The
10        amount   of   the  fee  for  each  certificate  shall  be
11        established by rule.  Fees shall be  deposited  into  the
12        Regulatory Fund.
13    (Source: P.A. 89-287, eff. 1-1-96.)

14        (240 ILCS 40/5-25)
15        Sec.  5-25.   Licensing  standards and requirements.  The
16    Department shall issue, amend, or  renew  a  license  if  the
17    Department  is satisfied that the applicant or licensee meets
18    the  standards  and  requirements  of  this   Section.    The
19    standards and requirements of subsections (a) and (b) of this
20    Section  must  be  observed  and  complied  with at all times
21    during the term of the license.
22        (a)  General requirements.
23             (1)  The applicant or  licensee  must  have  a  good
24        business  reputation,  have not been involved in improper
25        manipulation of  books  and  records  or  other  improper
26        business  practices,  and  have  the  qualifications  and
27        background essential for the conduct of the business of a
28        licensee.   The  Department  must  be satisfied as to the
29        business reputation, background,  and  qualifications  of
30        the management and principal officers of the applicant or
31        licensee.    The Department may obtain criminal histories
32        of management and principal officers of the applicant  or
33        licensee.
 
                            -24-     LRB093 07237 RCE 07394 b
 1             (2)  The  applicant  or  licensee  must  maintain  a
 2        permanent business location in the State of Illinois.  At
 3        Each location where the licensee is transacting business,
 4        that  place  of  business shall remain open from at least
 5        one-half hour  before  the  daily  opening  to  at  least
 6        one-half  hour  after  the  daily  closing of the Chicago
 7        Board  of  Trade,  unless  otherwise  approved   by   the
 8        Department.
 9             (3)  The  applicant  or licensee must have insurance
10        on all grain in its possession or custody as required  in
11        this Code.
12             (4)  The applicant or licensee shall at all times at
13        its  principal business location in the State of Illinois
14        keep sufficiently detailed books and  records,  including
15        but  not  limited to Grain Seller Assessments, to reflect
16        compliance with all  requirements of this Code.
17             (5)  The applicant  or  licensee  and  each  of  its
18        officers, directors, partners, and managers must not have
19        been  found  guilty of a criminal violation of this Code,
20        any of  its  predecessor  statutes,  or  any  similar  or
21        related  statute or law of the United States or any other
22        state or jurisdiction within 10 3 years of  the  date  of
23        application for the issuance or renewal of a license.
24             (6)  The  applicant  or  licensee  and  each  of its
25        officers, directors, managers, and partners, that at  any
26        one  time  have been a licensee under this Code or any of
27        its predecessor statutes, or licensed under  any  similar
28        or  related  statute  or  law of the United States or any
29        other state  or  jurisdiction,  must  not  have  had  its
30        license  terminated  or revoked by the Department, by the
31        United States, or by any  other  state  or  jurisdiction,
32        within  2  years  of  the  date  of  application  for the
33        issuance or renewal  of  a  license  leaving  unsatisfied
34        indebtedness to claimants.
 
                            -25-     LRB093 07237 RCE 07394 b
 1             (7)  The  applicant  or  licensee  and  each  of its
 2        officers, directors, managers, and partners must not have
 3        been an officer,  director,  manager,  or  partner  of  a
 4        former licensee under this Code or any of its predecessor
 5        statutes,  or  of  a business formerly licensed under any
 6        similar or related statute or law of the United States or
 7        any other state or jurisdiction,  that  had  its  license
 8        terminated  or  revoked  by the Department, by the United
 9        States, or by any other state or jurisdiction,  within  2
10        years  of  the  date  of  application for the issuance or
11        renewal of a license, leaving unsatisfied indebtedness to
12        claimants, unless  the  applicant  or  licensee  makes  a
13        sufficient  showing to the Department that the applicable
14        person  or  related  party   was   not   materially   and
15        substantially  involved  as  a  principal in the business
16        that had its license terminated or revoked.   An  interim
17        or  temporary  manager  that is employed by a licensee to
18        reorganize the licensee or to manage the  licensee  until
19        its  business  is sold, transferred, or liquidated is not
20        in violation of this subsection  (7)  solely  because  of
21        that employment as an interim or temporary manager.
22        (b)  Financial requirements.
23             (1)  The applicant or licensee's financial statement
24        must  show  a current ratio of the total adjusted current
25        assets to the total adjusted current  liabilities  of  at
26        least one to one.
27                  (A)  Adjusted  current  assets  mean only those
28             stated current assets shown  on  the  balance  sheet
29             submitted  by  the  applicant  or  licensee that are
30             grain assets, as  defined  in  this  Code,  and  the
31             equity  value  of  any  equity assets, as defined in
32             this Code, and in addition shall  be  calculated  by
33             deducting  from  the  stated current assets shown on
34             the balance sheet  submitted  by  the  applicant  or
 
                            -26-     LRB093 07237 RCE 07394 b
 1             licensee  any  current  asset, as calculated in item
 2             (B) of this subdivision (1),  resulting  from  notes
 3             receivable   from      related   persons,   accounts
 4             receivable from related persons, stock subscriptions
 5             receivable,    and    any   other   related   person
 6             receivables.
 7                  (B)  A disallowed current asset shall be netted
 8             against any related liability and the net result, if
 9             an asset,  shall  be  subtracted  from  the  current
10             assets.
11             (2)  The applicant or licensee's financial statement
12        and  balance sheet must show an adjusted debt to adjusted
13        equity ratio of not more than 3 to one.
14                  (A)  Adjusted  debt  shall  be  calculated   by
15             totaling   current  and  long-term  liabilities  and
16             reducing the total liabilities, up to the amount  of
17             current  liabilities, by the liquid assets appearing
18             in the current asset section of  the  balance  sheet
19             submitted  by  the  applicant  or licensee.  For the
20             purposes of this Section, liquid assets include  but
21             are not limited to cash, depository accounts, direct
22             obligations   of  the  U.S.  Government,  marketable
23             securities,  grain  assets,   balances   in   margin
24             accounts, and tax refunds.
25                  (B)  Adjusted  equity  shall  be  calculated by
26             including only those assets that are  grain  assets,
27             as defined in this Code, and the equity value of any
28             equity  assets,  as  defined  in  this  Code, and in
29             addition by deducting  from  the  stated  net  worth
30             shown   on   the  balance  sheet  submitted  by  the
31             applicant or licensee any asset,  as  calculated  in
32             item  (C)  of  this  subdivision (2), resulting from
33             notes  receivable  from  related  persons,  accounts
34             receivable from related persons, stock subscriptions
 
                            -27-     LRB093 07237 RCE 07394 b
 1             receivable, or any other related person receivables.
 2                  (C)  A disallowed asset shall be netted against
 3             any related liability and  the  net  result,  if  an
 4             asset,  shall  be  subtracted  from  the  stated net
 5             worth,  or  if  a  liability  it  shall   remain   a
 6             liability.
 7             (3)  An  applicant or licensee must have an adjusted
 8        equity of at least $50,000 as determined  by  the  method
 9        specified in item (b)(2) of this Section.
10             (4)  For   the   purposes  of  this  Section,  notes
11        receivable from related persons, accounts receivable from
12        related persons, and any other related person receivables
13        are not a disallowed asset if the related person is  also
14        a licensee and meets all of the financial requirements of
15        this Code.
16             (5)  An  applicant  for  a  new license shall not be
17        permitted to  collateralize  the  requirements  of  items
18        (b)(1) and (b)(3) of this Section in order to satisfy the
19        requirements for a new license.
20    (Source: P.A. 89-287, eff. 1-1-96.)

21        (240 ILCS 40/5-30)
22        Sec.  5-30.    Grain  Insurance  Fund  assessments.   The
23    Illinois   Grain   Insurance   Fund   is   established  as  a
24    continuation of the fund created  under  the  Illinois  Grain
25    Insurance  Act, now repealed. Licensees, and applicants for a
26    new license, first sellers  of  grain  to  grain  dealers  at
27    Illinois   locations,  and  lenders  to  licensee  shall  pay
28    assessments as set forth in this Section.
29        (a)  Subject  to  subsection  (e)  of  this  Section,   a
30    licensee  that  is newly licensed after the effective date of
31    this Code shall  pay  an  assessment  into  the  Fund  for  3
32    consecutive  years.   These  assessments  are known as "newly
33    licensed assessments".  Except as provided  in  item  (6)  of
 
                            -28-     LRB093 07237 RCE 07394 b
 1    subsection   (b)  of  this  Section,  the  first  installment
 2    assessment shall be  paid  at  the  time  of  or  before  the
 3    issuance  of a new license, the second installment assessment
 4    shall be paid on or before the first anniversary date of  the
 5    issuance  of  the  new  license,  and  the  third installment
 6    assessment shall be paid on or before the second  anniversary
 7    date of the issuance of the new license.  For a grain dealer,
 8    the initial payment of each of the 3 installments assessments
 9    shall  be  based  upon  the  total  estimated  value of grain
10    purchases by the grain dealer for the  applicable  year  with
11    the  final  installment  assessment  amount determined as set
12    forth in item (6) of subsection (b) of this  Section.   After
13    the  licensee  has  paid  or  was  required  to pay the newly
14    licensed assessments first 3 assessments  to  the  Department
15    for  payment  into the Fund, the licensee shall be subject to
16    subsequent assessments as set forth in subsection (d) of this
17    Section.
18        (b)  Grain dealer newly licensed assessments.
19             (1)  The first installment assessment  for  a  grain
20        dealer shall be an amount equal to:
21                  (A)  $0.000145 multiplied by the total value of
22             grain  purchases for the grain dealer's first fiscal
23             year as shown in the final financial  statement  for
24             that  year  provided to the Department under Section
25             5-20; and
26                  (B)  $0.000255 multiplied by  that  portion  of
27             the  value of grain purchases for the grain dealer's
28             first fiscal year that  exceeds the adjusted  equity
29             of  the  licensee  multiplied by 20, as shown on the
30             final financial statement for the  licensee's  first
31             fiscal year provided to the Department under Section
32             5-20.
33             (2)  The  minimum  amount  assessment  for the first
34        installment assessment shall be $1,000  and  the  maximum
 
                            -29-     LRB093 07237 RCE 07394 b
 1        shall be $10,000.
 2             (3)  The  second  installment assessment for a grain
 3        dealer shall be an amount equal to:
 4                  (A)  $0.0000725 multiplied by the  total  value
 5             of  grain  purchases  for  the grain dealer's second
 6             fiscal  year  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             second fiscal year that exceeds the adjusted  equity
12             of  the  licensee  multiplied by 20, as shown on the
13             final financial statement for the licensee's  second
14             fiscal year provided to the Department under Section
15             5-20.
16             (4)  The  third  installment  assessment for a grain
17        dealer shall be an amount equal to:
18                  (A)  $0.0000725 multiplied by the  total  value
19             of  grain  purchases  for  the  grain dealer's third
20             fiscal  year  as  shown  in  the   final   financial
21             statement  for  that year provided to the Department
22             under Section 5-20; and
23                  (B)  $0.0001275 multiplied by that  portion  of
24             the  value of grain purchases for the grain dealer's
25             third fiscal year that exceeds the  adjusted  equity
26             of  the  licensee  multiplied by 20, as shown on the
27             final financial statement for the  licensee's  third
28             fiscal year.
29             (5)  The  minimum  amount  of  the  second and third
30        installments assessments shall be $500 per year  and  the
31        maximum for each year shall be $5,000.
32             (6)  Each  of the newly licensed first 3 assessments
33        shall be adjusted up or down based upon the actual annual
34        grain purchases for each  year  as  shown  in  the  final
 
                            -30-     LRB093 07237 RCE 07394 b
 1        financial   statement  for  that  year  provided  to  the
 2        Department under Section 5-20.  The adjustments shall  be
 3        determined  by  the Department within 30 days of the date
 4        of approval of renewal of a  license.  Refunds  shall  be
 5        paid   out   of   the  Fund  within  60  days  after  the
 6        Department's determination.  Additional amounts owed  for
 7        any  installment assessments shall be paid within 30 days
 8        after notification  by  the  Department  as  provided  in
 9        subsection (f) of this Section.
10             (7)  For the purposes of grain dealer newly licensed
11        assessments  under  subsection  (b)  of this Section, the
12        total value of grain purchases shall be the  total  value
13        of  first time grain purchases by Illinois locations from
14        producers.
15             (8)  The second and third installments shall be paid
16        to the Department within 60 days after the date posted on
17        the written notice of assessment.  The  Department  shall
18        immediately deposit all paid installments into the Fund.
19        (c)  Warehouseman newly licensed assessments.
20             (1)  The  first  assessment for a warehouseman shall
21        be an amount equal to:
22                  (A)  $0.00085 multiplied by the total permanent
23             storage capacity of the warehouseman at the time  of
24             license issuance; and
25                  (B)  $0.00099 multiplied by that portion of the
26             permanent  storage  capacity  of the warehouseman at
27             the  time  of  license  issuance  that  exceeds  the
28             adjusted equity of the licensee multiplied by 5, all
29             as shown on the final financial  statement  for  the
30             licensee  provided  to  the Department under Section
31             5-10.
32             (2)  The minimum amount  assessment  for  the  first
33        installment  assessment  shall  be $1,000 and the maximum
34        shall be $10,000.
 
                            -31-     LRB093 07237 RCE 07394 b
 1             (3)  The second and third  installments  assessments
 2        shall be an amount equal to:
 3                  (A)  $0.000425    multiplied   by   the   total
 4             permanent storage capacity of  the  warehouseman  at
 5             the time of license issuance; and
 6                  (B)  $0.000495  multiplied  by  that portion of
 7             the  permanent  licensed  storage  capacity  of  the
 8             warehouseman at the time of  license  issuance  that
 9             exceeds   the   adjusted   equity  of  the  licensee
10             multiplied by 5, as shown  on  the  final  financial
11             statement  for  the licensee's last completed fiscal
12             year provided to the Department under Section 5-20.
13             (4)  The minimum amount assessment  for  the  second
14        and  third  installments  assessments  shall  be $500 per
15        installment  assessment  and   the   maximum   for   each
16        installment assessment shall be $5,000.
17             (5)  Every warehouseman shall pay an assessment when
18        increasing  available  permanent  storage  capacity in an
19        amount equal to $0.001 multiplied by the total number  of
20        bushels  to  be added to permanent storage capacity.  The
21        minimum assessment on any increase in  permanent  storage
22        capacity shall be $50 and the maximum assessment shall be
23        $20,000.   The  assessment  based  upon  an  increase  in
24        permanent storage capacity shall be paid at or before the
25        time of approval of the  increase  in  permanent  storage
26        capacity.   This  assessment  on  the increased permanent
27        storage capacity does not relieve the warehouseman of any
28        assessments as  set  forth  in  subsection  (d)  of  this
29        Section.
30             (6)  Every  warehouseman  shall pay an assessment of
31        $0.0005 per  bushel  when  increasing  available  storage
32        capacity  by use of temporary storage space.  The minimum
33        assessment on temporary storage space shall be $100.  The
34        assessment based upon temporary storage  space  shall  be
 
                            -32-     LRB093 07237 RCE 07394 b
 1        paid  at  or before the time of approval of the amount of
 2        the temporary storage space.    This  assessment  on  the
 3        temporary  storage  space  capacity  does not relieve the
 4        warehouseman  of  any  assessments  as   set   forth   in
 5        subsection (d) of this Section.
 6             (7)  Every  warehouseman  shall pay an assessment of
 7        $0.001 per bushel  of  emergency    storage  space.   The
 8        minimum  assessment  on any emergency storage space shall
 9        be $100.  The assessment  based  upon  emergency  storage
10        space  shall be paid at or before the time of approval of
11        the  amount  of  the  emergency  storage   space.    This
12        assessment  on  the  emergency  storage  space  does  not
13        relieve  the warehouseman of any assessments as set forth
14        in subsection (d) of this Section.
15             (8)  The second and third installments shall be paid
16        to the Department within 60 days after the date posted on
17        the written notice of assessment.  The  Department  shall
18        immediately deposit all paid installments into the Fund.
19        (d)  Grain   dealer   single   assessments   and   double
20    assessments;   warehouseman  single  assessments  and  double
21    Subsequent assessments.
22             (1)  Subject to paragraph  (5)  of  this  subsection
23        (d),  if  on  the first working day of a calendar quarter
24        when a licensee is not already subject to  an  assessment
25        under  this  subsection (d) (the assessment determination
26        date),  if  the  equity  in  the  Fund  is  greater  than
27        $2,000,000 but less that $5,000,000 below  $3,000,000  on
28        September 1st of any year, every grain dealer who has, or
29        was  required  to  have,  already paid the newly licensed
30        first, second, and third assessments shall be assessed by
31        the Department in a total an amount equal to:
32                  (A)  $0.00009425 $0.0000725 multiplied  by  the
33             total   value  of  grain  purchases  for  the  grain
34             dealer's last completed fiscal year as shown in  the
 
                            -33-     LRB093 07237 RCE 07394 b
 1             final  financial statement for that year provided to
 2             the Department under Section 5-20; and
 3                  (B)  $0.00016575 $0.0001275 multiplied by  that
 4             portion  of  the  value  of  grain purchases for the
 5             grain  dealer's  last  completed  fiscal  year  that
 6             exceeds  the  adjusted  equity   of   the   licensee
 7             multiplied  by  20,  as shown on the final financial
 8             statement for the licensee's last  completed  fiscal
 9             year provided to the Department under Section 5-20.
10             The minimum total amount for the grain dealer single
11        a  subsequent  assessment shall be $250 $500 per year and
12        the maximum amount shall be $10,000 $5,000  per  12-month
13        period   year.      For  the  purposes  of  grain  dealer
14        assessments under this item (1) of subsection (d) of this
15        Section, the total value of grain purchases shall be  the
16        total  value  of  first  time grain purchases by Illinois
17        locations from producers.
18             (2)  Subject to paragraph  (5)  of  this  subsection
19        (d),  if  on  the first working day of a calendar quarter
20        when a licensee is not subject  to  an  assessment  under
21        this  subsection (d) (the assessment determination date),
22        if the equity in the Fund is greater than $2,000,000  but
23        less than $5,000,000 below $3,000,000 on September 1st of
24        any  year, every warehouseman who has, or was required to
25        have, already paid the newly licensed first, second,  and
26        third assessments shall be assessed a warehouseman single
27        assessment  by  the Department in a total an amount equal
28        to:
29                  (A)  $0.0005525  $0.000425  multiplied  by  the
30             total licensed storage capacity of the  warehouseman
31             as of September 1st of that year; and
32                  (B)  $0.0006435  $0.000495  multiplied  by that
33             portion of the  licensed  storage  capacity  of  the
34             warehouseman  as  of September 1st of that year that
 
                            -34-     LRB093 07237 RCE 07394 b
 1             exceeds  the  adjusted  equity   of   the   licensee
 2             multiplied  by  5,  as  shown on the final financial
 3             statement for the licensee's last  completed  fiscal
 4             year provided to the Department under Section 5-20.
 5             The  minimum  total amount for a warehouseman single
 6        subsequent assessment shall be  $250  $500  per  12-month
 7        period  year  and  the  maximum  amount  shall be $10,000
 8        $5,000 per 12-month period year.
 9             (3)  Subject to paragraph  (5)  of  this  subsection
10        (d),  if  on  the first working day of a calendar quarter
11        when a licensee is not subject  to  an  assessment  under
12        this  subsection (d) (the assessment determination date),
13        the equity in the Fund is $2,000,000 or less, every grain
14        dealer who has, or was required to have, already paid the
15        newly licensed  assessment  shall  be  assessed  a  grain
16        dealer  double  assessment  by  the Department in a total
17        amount equal to:
18                  (A)  $0.0001885 multiplied by the  total  value
19             of  grain  purchases  for  the  grain  dealer's last
20             completed fiscal year, as  shown  in  the  financial
21             statement  for  that year provided to the Department
22             under Section 5-20; and
23                  (B)  $0.0003375 multiplied by that  portion  of
24             the  value of grain purchases for the grain dealer's
25             last completed fiscal year that exceeds the adjusted
26             equity of the licensee multiplied by 20, as shown on
27             the final financial  statement  for  the  licensee's
28             last   completed   fiscal   year   provided  to  the
29             Department under Section 5-20.
30        The minimum total amount for  this  grain  dealer  double
31    assessment  shall be $500 per 12-month period and the maximum
32    amount shall be $20,000 per 12-month period.  For the purpose
33    of grain dealer assessments under this item  (3),  the  total
34    value  of  grain  purchases  shall  be  the  total  value  of
 
                            -35-     LRB093 07237 RCE 07394 b
 1    first-time   grain   purchases  by  Illinois  locations  from
 2    producers.
 3             (4)  Subject to paragraph  (5)  of  this  subsection
 4        (d),  if  on  the first working day of a calendar quarter
 5        when a licensee is not subject  to  an  assessment  under
 6        this  subsection (d) (the assessment determination date),
 7        the equity in the  Fund  is  $2,000,000  or  less,  every
 8        warehouseman  who  has,  or was required to have, already
 9        paid the newly licensed assessments shall be  assessed  a
10        warehouseman  double  assessment  by  the Department in a
11        total amount equal to:
12                  (A)  $0.001105 multiplied by the  then  current
13             total licensed storage capacity of the warehouseman;
14             and
15                  (B)  $0.001287  multiplied  by  that portion of
16             the then current total licensed storage capacity  of
17             the warehouseman that exceeds the adjusted equity of
18             the  licensee multiplied by 5, as shown on the final
19             financial  statement   for   the   licensee's   last
20             completed  fiscal  year  provided  to the Department
21             under Section 5-20.  The  minimum  amount  for  this
22             Warehouseman  Double  Assessment  shall  be $500 per
23             12-month period and  the  maximum  amount  shall  be
24             $20,000 per 12-month period.
25             (5)  Following  the  payment  of the final quarterly
26        installment by grain dealers and warehousemen,  the  next
27        assessment  determination  date can be no sooner than the
28        first working  day  of  the  sixth  full  calendar  month
29        following the payment.
30             (6)  All assessments under paragraphs (1), (2), (3),
31        and  (4)  of this subsection (d) shall be effective as of
32        the  first  day  of  the  calendar  quarter   immediately
33        following  the assessment determination date and shall be
34        paid  to  the  Department  by  licensees   in   4   equal
 
                            -36-     LRB093 07237 RCE 07394 b
 1        installments  by  the  twentieth  day of each consecutive
 2        calendar quarter following notice by  the  Department  of
 3        the  assessment. The Department shall give written notice
 4        to all licensees of when the assessment is effective, and
 5        the rate of the assessment, by mail within 20 days before
 6        the assessment determination date.
 7             (7)  After an assessment under paragraph  (1),  (2),
 8        (3),  or  (4)  of  this subsection (d) is instituted, the
 9        amount of any  unpaid  installments  for  the  assessment
10        shall  not  be  adjusted  based  upon  any  change in the
11        financial statements or licensed storage  capacity  of  a
12        licensee.
13             (8)  If  the  due date for the payment by a licensee
14        of the third assessment under subsections (b) and (c)  of
15        this  Section  5-30 is after the assessment determination
16        date, that licensee shall not be subject to any of the  4
17        installments  of an assessment under paragraphs (1), (2),
18        (3), and (4) of this subsection (d).
19             (9)  The Department shall  immediately  deposit  all
20        paid  assessments  into the Fund. If the due date for the
21        payment by a licensee of the third  assessment  is  after
22        September  1st  in  a year when the equity in the Fund is
23        below $3,000,000, that licensee shall not be subject to a
24        subsequent assessment for that year.
25        (e)  Newly licensed; exemptions.
26             (1)  For the purpose of assessing fees for the  Fund
27        under  subsection (a) of this Section, and subject to the
28        provisions of item (e)(2) of this Section, the Department
29        shall consider the following to be newly licensed:
30                  (A)  A person that becomes a licensee  for  the
31             first time after the effective date of this Code.
32                  (B)  A licensee who has a lapse in licensing of
33             more   than   30  days.   A  license  shall  not  be
34             considered to be  lapsed  after  its  revocation  or
 
                            -37-     LRB093 07237 RCE 07394 b
 1             termination  if an administrative or judicial action
 2             is pending or if an order from an administrative  or
 3             judicial body continues an existing license.
 4                  (C)  A   grain   dealer   that   is  a  general
 5             partnership  in  which  there   is   a   change   in
 6             partnership  interests  and  that  change is greater
 7             than 50% during the partnership's fiscal year.
 8                  (D)  A  grain  dealer   that   is   a   limited
 9             partnership  in  which  there  is  a  change  in the
10             controlling interest of a general partner  and  that
11             change  is greater than 50% of the total controlling
12             interest during  the  limited  partnership's  fiscal
13             year.
14                  (E)  A grain dealer that is a limited liability
15             company  in  which  there  is a change in membership
16             interests and that change is greater than 50% during
17             the limited liability company's fiscal year.
18                  (F)  A grain dealer that is  the  result  of  a
19             statutory  consolidation if that person has adjusted
20             equity of less than 90%  of  the  combined  adjusted
21             equity  of the predecessor persons who consolidated.
22             For the purposes of  this  paragraph,  the  adjusted
23             equity  of  the resulting person shall be determined
24             from the approved or certified  financial  statement
25             submitted  to  the  Department  for the first fiscal
26             year of the resulting person.  For  the  purpose  of
27             this  paragraph, the combined adjusted equity of the
28             predecessor persons shall be determined by combining
29             the adjusted equity of each  predecessor  person  as
30             set  forth  in the most recent approved or certified
31             financial  statement  of  each  predecessor   person
32             submitted to the Department.
33                  (G)  A  grain  dealer  that  is the result of a
34             statutory merger if that person has adjusted  equity
 
                            -38-     LRB093 07237 RCE 07394 b
 1             of  less than 90% of the combined adjusted equity of
 2             the  predecessor  persons  who  merged.    For   the
 3             purposes  of  this paragraph, the adjusted equity of
 4             the resulting person shall be  determined  from  the
 5             approved  or certified financial statement submitted
 6             to the Department for the first fiscal year  of  the
 7             resulting  person  ending after the merger.  For the
 8             purposes of this paragraph,  the  combined  adjusted
 9             equity   of   the   predecessor   persons  shall  be
10             determined by combining the adjusted equity of  each
11             predecessor  person  as set forth in the most recent
12             approved or certified financial statement  submitted
13             to  the  Department for the last fiscal year of each
14             predecessor person ending on the date of  or  before
15             the merger.
16                  (H)  A   grain   dealer   that   is  a  general
17             partnership  in  which  there   is   a   change   in
18             partnership interests and that change is 50% or less
19             during the partnership's fiscal year if the adjusted
20             equity  of  the partnership after the change is less
21             than 90% of the adjusted equity of  the  partnership
22             before   the   change.   For  the  purpose  of  this
23             paragraph, the adjusted equity  of  the  partnership
24             after  the  change  shall  be  determined  from  the
25             approved  or certified financial statement submitted
26             to the Department for the first fiscal  year  ending
27             after   the   change.   For  the  purposes  of  this
28             paragraph, the adjusted equity  of  the  partnership
29             before  the  change  shall  be  determined  from the
30             approved or certified financial statement  submitted
31             to  the  Department  for the last fiscal year of the
32             partnership ending on the  date  of  or  before  the
33             change.
34                  (I)  A   grain   dealer   that   is  a  limited
 
                            -39-     LRB093 07237 RCE 07394 b
 1             partnership in  which  there  is  a  change  in  the
 2             controlling  interest  of a general partner and that
 3             change is 50%  or  less  of  the  total  controlling
 4             interest during the partnership's fiscal year if the
 5             adjusted  equity of the partnership after the change
 6             is less than 90%  of  the  adjusted  equity  of  the
 7             partnership  before the change.  For the purposes of
 8             this  paragraph,  the   adjusted   equity   of   the
 9             partnership  after  the  change  shall be determined
10             from the approved or certified  financial  statement
11             submitted  to  the  Department  for the first fiscal
12             year ending after the change.  For the  purposes  of
13             this   paragraph,   the   adjusted   equity  of  the
14             partnership before the change  shall  be  determined
15             from  the  approved or certified financial statement
16             submitted to the Department for the last fiscal year
17             of the partnership ending on the date of  or  before
18             the change.
19                  (J)  A grain dealer that is a limited liability
20             company  in  which  there  is a change in membership
21             interests and that change is  50%  or  less  of  the
22             total   membership   interests  during  the  limited
23             liability company's  fiscal  year  if  the  adjusted
24             equity  of  the  limited liability company after the
25             change is less than 90% of the  adjusted  equity  of
26             the  limited  liability  company  before the change.
27             For the purposes of  this  paragraph,  the  adjusted
28             equity  of  the  limited liability company after the
29             change shall be  determined  from  the  approved  or
30             certified   financial  statement  submitted  to  the
31             Department for the first fiscal  year  ending  after
32             the change.  For the purposes of this paragraph, the
33             adjusted  equity  of  the  limited liability company
34             before the  change  shall  be  determined  from  the
 
                            -40-     LRB093 07237 RCE 07394 b
 1             approved  or certified financial statement submitted
 2             to the Department for the last fiscal  year  of  the
 3             limited  liability  company ending on the date of or
 4             before the change.
 5                  (K)  A grain dealer that is  the  result  of  a
 6             statutory  consolidation or merger if one or more of
 7             the predecessor  persons that consolidated or merged
 8             into the resulting  grain dealer was not a  licensee
 9             under  this Code at the time of the consolidation or
10             merger.
11             (2)  For the purpose of assessing fees for the  Fund
12        as  set  forth  in  subsection  (a)  of this Section, the
13        Department shall consider  the  following  as  not  being
14        newly   licensed  and,  therefore,  exempt  from  further
15        assessment unless an assessment is required by subsection
16        (d) of this Section:
17                  (A)  A person  resulting  solely  from  a  name
18             change of a licensee.
19                  (B)  A  warehouseman  changing  from  a Class I
20             warehouseman to a Class II warehouseman  or  from  a
21             Class  II  warehouseman  to  a  Class I warehouseman
22             under this Code.
23                  (C)  A licensee that  becomes  a  wholly  owned
24             subsidiary of another licensee.
25                  (D)  Subject to item (e)(1)(K) of this Section,
26             a   person   that  is  the  result  of  a  statutory
27             consolidation if that  person  has  adjusted  equity
28             greater  than  or  equal  to  90%  of  the  combined
29             adjusted  equity  of  the  predecessor  persons  who
30             consolidated.   For  the purposes of this paragraph,
31             the adjusted equity of the resulting person shall be
32             determined from the approved or certified  financial
33             statement  submitted to the Department for the first
34             fiscal  year  of  the  resulting  person.   For  the
 
                            -41-     LRB093 07237 RCE 07394 b
 1             purpose of this  paragraph,  the  combined  adjusted
 2             equity   of   the   predecessor   persons  shall  be
 3             determined  by  combining  the  net  worth  of  each
 4             predecessor person as set forth in the  most  recent
 5             approved  or  certified  financial statement of each
 6             predecessor person submitted to the Department.
 7                  (E)  Subject to item (e)(1)(K) of this Section,
 8             a person that is the result of a statutory merger if
 9             that person has  adjusted  equity  greater  than  or
10             equal  to 90% of the combined adjusted equity of the
11             predecessor persons who merged.  For the purposes of
12             this paragraph, the adjusted equity of the resulting
13             person shall be  determined  from  the  approved  or
14             certified   financial  statement  submitted  to  the
15             Department  for  the  first  fiscal  year   of   the
16             resulting  person  ending after the merger.  For the
17             purposes of this paragraph,  the  combined  adjusted
18             equity   of   the   predecessor   persons  shall  be
19             determined by combining the adjusted equity of  each
20             predecessor  person  as set forth in the most recent
21             approved or certified financial statement, submitted
22             to the Department for the last fiscal year  of  each
23             predecessor  person  ending on the date of or before
24             the merger.
25                  (F)  A general partnership in which there is  a
26             change  in  partnership interests and that change is
27             50% or less during the partnership's fiscal year and
28             the adjusted equity of  the  partnership  after  the
29             change  is  greater  than  or  equal  to  90% of the
30             adjusted  equity  of  the  partnership  before   the
31             change.   For  the  purposes  of this paragraph, the
32             adjusted equity of the partnership after the  change
33             shall  be  determined from the approved or certified
34             financial statement submitted to the Department  for
 
                            -42-     LRB093 07237 RCE 07394 b
 1             the  first fiscal year ending after the change.  For
 2             the purposes of this paragraph, the adjusted  equity
 3             of  the  partnership  before  the  change  shall  be
 4             determined  from the approved or certified financial
 5             statement submitted to the Department for  the  last
 6             fiscal year of the partnership ending on the date of
 7             or before the change.
 8                  (G)  A  limited partnership in which there is a
 9             change in the  controlling  interest  of  a  general
10             partner  and that change is 50% or less of the total
11             controlling interest during the partnership's fiscal
12             year and the  adjusted  equity  of  the  partnership
13             after  the change is greater than or equal to 90% of
14             the adjusted equity of the  partnership  before  the
15             change.   For  the  purposes  of this paragraph, the
16             adjusted equity of the partnership after the  change
17             shall  be  determined from the approved or certified
18             financial statement submitted to the Department  for
19             the  first fiscal year ending after the change.  For
20             the purposes of this paragraph, the adjusted  equity
21             of  the  partnership  before  the  change  shall  be
22             determined  from the approved or certified financial
23             statement submitted to the Department for  the  last
24             fiscal year of the partnership ending on the date of
25             or before the change.
26                  (H)  A limited liability company in which there
27             is  a change in membership interests and that change
28             is 50% or less of  the  total  membership  interests
29             during  the  limited liability company's fiscal year
30             if the adjusted  equity  of  the  limited  liability
31             company after the change is greater than or equal to
32             90%  of the adjusted equity of the limited liability
33             company before the change.  For the purposes of this
34             paragraph,  the  adjusted  equity  of  the   limited
 
                            -43-     LRB093 07237 RCE 07394 b
 1             liability   company   after   the  change  shall  be
 2             determined from the approved or certified  financial
 3             statement  submitted to the Department for the first
 4             fiscal  year  ending  after  the  change.   For  the
 5             purposes of this paragraph, the adjusted  equity  of
 6             the  limited  liability  company  before  the change
 7             shall be determined from the approved  or  certified
 8             financial  statement submitted to the Department for
 9             the  last  fiscal  year  of  the  limited  liability
10             company ending on the date of or before the  change.
11                  (I)  A licensed warehouseman that is the result
12             of a statutory merger or consolidation to the extent
13             the  combined  storage  capacity  of  the  resulting
14             warehouseman  has  been  assessed  under  this  Code
15             before the statutory merger or consolidation, except
16             that   any   storage   capacity   of  the  resulting
17             warehouseman that has not previously  been  assessed
18             under  this  Code  shall  be assessed as provided in
19             items (c)(5), (c)(6), and (c)(7) of this Section.
20                  (J)  A federal warehouseman who participated in
21             the Fund under Section 30-10  and  who  subsequently
22             received  an  Illinois  license  to  the  extent the
23             storage capacity of the  warehouseman  was  assessed
24             under this Code prior to Illinois licensing.
25        (f)  Grain   seller   single   assessments   and   double
26    assessments. Assessments under this subsection (f) apply only
27    to  the  first sale of grain to a grain dealer at an Illinois
28    location.
29             (1)  Subject to paragraph  (3)  of  this  subsection
30        (f),  if  on  the first working day of a calendar quarter
31        when  a  grain  seller  is  not  already  subject  to  an
32        assessment under  this  subsection  (f)  (the  assessment
33        determination  date),  the  equity in the Fund is greater
34        than $2,000,000 and less than $5,000,000, each person who
 
                            -44-     LRB093 07237 RCE 07394 b
 1        settles for grain (sold to a grain dealer at an  Illinois
 2        location)  during  the  12-month period commencing on the
 3        first  day  of  the  succeeding  calendar  quarter   (the
 4        assessment  period)  shall  pay  an  assessment  equal to
 5        $0.0002 (the grain seller single  assessment)  multiplied
 6        by  the  net  market  value of grain settled for (payment
 7        received for grain sold).
 8             (2)  Subject to paragraph  (3)  of  this  subsection
 9        (f),  if  on  the first working day of a calendar quarter
10        when  a  grain  seller  is  not  already  subject  to  an
11        assessment under  this  subsection  (f)  (the  assessment
12        determination date), the equity in the Fund is $2,000,000
13        or  less,  each  person  who settles for grain (sold to a
14        grain  dealer  at  an  Illinois  location)   during   the
15        assessment  period  shall  pay  an  assessment  equal  to
16        $0.0004  (the  grain seller double assessment) multiplied
17        by the net market value of grain settled for.
18             (3)  The next assessment determination date  can  be
19        no  sooner  than the first working day of the fourth full
20        calendar  month  following  the  end  of  the  assessment
21        period.
22             (4)  "Net market value" of  grain  means  the  gross
23        sales  price of that grain adjusted by application of the
24        grain dealer's discount schedule in effect at the time of
25        sale and  after  deduction  of  any  statutory  commodity
26        check-offs. Other charges such as storage charges, drying
27        charges,  and  transportation costs shall not be deducted
28        in arriving at the net market value of grain  sold  to  a
29        grain  dealer.  The  net  market  value of grain shall be
30        determined from the settlement sheet or other  applicable
31        written  evidence  of  the  sale  of  grain  to the grain
32        dealer.
33             (5)  All assessments under paragraphs (1) and (2) of
34        this subsection (f) shall commence on the  first  day  of
 
                            -45-     LRB093 07237 RCE 07394 b
 1        the calendar quarter immediately following the assessment
 2        determination  date and shall continue for a period of 12
 3        consecutive calendar months.  The  assessments  shall  be
 4        collected  by  licensees at the time of settlement during
 5        the assessment period, and shall be remitted by licensees
 6        to the Department by the twentieth day of  each  calendar
 7        quarter,  commencing  with  the  second  calendar quarter
 8        following  the   assessment   determination   date.   The
 9        Department  shall give written notice to all licensees of
10        when an assessment under this subsection (f) is to  begin
11        and  end, and the appropriate level of the assessment, by
12        mail within 20 days before the  assessment  determination
13        date.
14             (6)  Assessments  under  this  subsection  (f) apply
15        only to grain for which settlement  is  made  during  the
16        assessment  period,  without regard to the date the grain
17        was sold to the licensee.
18             (7)  The collection and  remittance  of  assessments
19        from  first sellers of grain under this subsection (f) is
20        the sole responsibility of  the  licensees  to  whom  the
21        grain is sold. Sellers of grain shall not be penalized by
22        reason  of  any  licensee's  failure  to comply with this
23        subsection (f). Failure of  a  licensee  to  collect  any
24        grain  seller  single  assessment  or grain seller double
25        assessment shall not relieve the grain seller from paying
26        the assessment, and the grain seller shall promptly remit
27        the uncollected assessments upon demand by the  licensee,
28        which  may  be  accounted  for  in  settlement  of  grain
29        subsequently  sold to that licensee. Licensees who do not
30        collect assessments as required by this  subsection  (f),
31        or  who  do not remit those assessments to the Department
32        within the time deadlines  required  by  this  subsection
33        (f),  shall  remit  the  amount  of  the assessments that
34        should have  been  remitted  to  the  Department  and  in
 
                            -46-     LRB093 07237 RCE 07394 b
 1        addition  shall  be  subject  to a monetary penalty in an
 2        amount not to exceed $25,000.
 3             (8)  Notwithstanding the other  provisions  of  this
 4        subsection  (f),  no  assessment  shall be levied against
 5        grain sold by the Department as a result of a failure.
 6        (g)  Lender  single   assessments   and   lender   double
 7    assessments
 8             (1)  Subject  to  paragraph  (3)  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  assessment  determination
12        date),  the equity in the Fund is greater than $2,000,000
13        and less than $5,000,000, each person  holding  warehouse
14        receipts  on  grain  stored  at  an  Illinois location to
15        secure a loan to a licensee shall be assessed at the rate
16        of $0.0002 on the average daily  balance  of  outstanding
17        loan    amounts    so    secured   (the   lender   single
18        assessment)during the 12-month period commencing with the
19        first  day  of  the  succeeding  calendar  quarter   (the
20        assessment period).
21             (2)  Subject  to  paragraph  (3)  of this subsection
22        (g), if on the first working day of  a  calendar  quarter
23        when  a  person  is  not already subject to an assessment
24        under this subsection (g) (the  assessment  determination
25        date), the equity in the Fund is $2,000,000 or less, each
26        person  holding  warehouse receipts on grain stored at an
27        Illinois location to secure a loan to a licensee shall be
28        assessed at the rate of  $0.0004  on  the  average  daily
29        balance  of  outstanding  loan  amounts  so  secured (the
30        lender double  assessment)  during  the  12-month  period
31        commencing  with the first day of the succeeding calendar
32        quarter (the assessment period).
33             (3)  The next assessment determination date  can  be
34        no  sooner  than the first working day of the fourth full
 
                            -47-     LRB093 07237 RCE 07394 b
 1        calendar  month  following  the  end  of  the  Assessment
 2        Period.
 3             (4)  All  amounts  due  from  persons   under   this
 4        subsection  (g) shall be paid to the Department within 20
 5        days after the end of the assessment period. Persons  not
 6        paying the assessments in accordance with this subsection
 7        (g)  shall  be  required  to  remit  the amounts of those
 8        assessments and, in  addition,  shall  be  subject  to  a
 9        monetary  penalty  in an amount not to exceed $25,000. It
10        is the responsibility of a licensee to inform each of its
11        lenders as to the onset of an assessment  for  which  the
12        lender  might  be  liable.  The  notification  must be in
13        writing and must be sent within 5 days after the licensee
14        receives notice of an assessment from the Department.
15             (5)  For purposes of this  subsection  (g),  persons
16        who  receive  warehouse  receipts  as  part  of so-called
17        "repurchase" arrangements are deemed to have made a  loan
18        to the licensee secured by the warehouse receipts and are
19        subject to assessment under this subsection (g).
20        (h)  Equity in the Fund shall exclude any amount of money
21    in  the  Fund  that  has  been  transferred  from the General
22    Revenue Fund under subsection (h) of  Section  25-20.  Except
23    for  the  first  assessment  made  under  this  Section,  and
24    assessments  under  items  (c)(5), (c)(6), and (c)(7) of this
25    Section, all assessments shall  be  paid  to  the  Department
26    within 60 days after the date posted on the written notice of
27    assessment.      The   Department   shall  forward  all  paid
28    assessments to the Fund.
29    (Source: P.A. 91-213, eff. 7-20-99.)

30        (240 ILCS 40/10-5)
31        Sec. 10-5.  Duties and requirements of licensees.
32        (a)  Each licensee shall have adequate property insurance
33    covering grain in its  possession  or  custody  and  adequate
 
                            -48-     LRB093 07237 RCE 07394 b
 1    liability, property, theft, hazard, and workers' compensation
 2    insurance.
 3             (1)  Every   insurance   policy   shall   contain  a
 4        provision that it will not be cancelled by the  principal
 5        or  the insurance company except on 60 days prior written
 6        notice  to  the  Director  and  the  principal   insured.
 7        Cancellation  of the policy does not affect the liability
 8        accrued or that may accrue under the  policy  before  the
 9        expiration  of the 60 days.  The notice shall contain the
10        termination date.
11             (2)  Each licensee shall keep  a  general  insurance
12        account  showing  the  policy  number,  issuing  company,
13        amount,  binding  date,  and expiration date of insurance
14        coverage and the property covered by insurance.
15             (3)  In reference to a warehouseman, notwithstanding
16        any provision to the contrary contained in the  warehouse
17        receipts  involved,  a  warehouseman  is not obligated to
18        provide   property   insurance   on   Commodity    Credit
19        Corporation  grain ("CCC-owned grain"). The warehouseman,
20        however, shall continue to carry the  insurance  required
21        on loan grain that becomes CCC-owned grain until the date
22        stated  in  a  written  notice  from  CCC  or  its  agent
23        instructing  the  warehouseman to cancel the insurance on
24        the grain as of that date.  If  CCC-owned  grain  is  not
25        covered  by property insurance, recovery by the Commodity
26        Credit Corporation from the Fund shall be reduced by  the
27        amount  of  property  insurance  proceeds that would have
28        been available to cover any loss to CCC-owned  grain  had
29        the CCC-owned grain been covered by property insurance.
30        (b)  A  licensee  shall immediately notify the Department
31    when  there  is  a  change  of  management  or  cessation  of
32    operations or change in fiscal year end.
33        (c)  All grain trades, grain merchandising  transactions,
34    grain  origination  plans  and  programs, and transactions or
 
                            -49-     LRB093 07237 RCE 07394 b
 1    arrangements that represent or reflect rights and obligations
 2    in grain must be clearly  identified  and  disclosed  in  the
 3    books  and records of the licensee, for audit and examination
 4    purposes.
 5    (Source: P.A. 89-287, eff. 1-1-96.)

 6        (240 ILCS 40/10-10)
 7        Sec. 10-10.  Duties and requirements of grain dealers.
 8        (a)  Long and short market position.
 9             (1)  Grain dealers shall at all  times  maintain  an
10        accurate  and  current  long  and  short  market position
11        record for each grain  commodity.   The  position  record
12        shall  at a minimum contain the net position of all grain
13        owned, wherever located, grain purchased  and  sold,  and
14        any grain option contract purchased or sold.
15             (2)  Grain  dealers,  except grain dealers regularly
16        and  continuously  reporting  to  the  Commodity  Futures
17        Trading Commission or grain dealers who have obtained the
18        permission of the Department to have different open  long
19        or  short market positions, may maintain an open position
20        in the grain commodity of which the grain dealer buys the
21        greatest number of bushels per fiscal year not to  exceed
22        one bushel for each $10 of adjusted equity at fiscal year
23        end  up  to a maximum open position of 50,000 bushels and
24        one-half that number of bushels up to 25,000 bushels  for
25        all other grain commodities that the grain dealer buys. A
26        grain  dealer,  however, may maintain an open position of
27        up to  5,000 bushels for each grain commodity  the  grain
28        dealer buys.
29        (b)  The  license  issued  by  the  Department to a grain
30    dealer shall  be  posted  in  the  principal  office  of  the
31    licensee  in  this  State.   A certificate shall be posted in
32    each location where the licensee engages  in  business  as  a
33    grain dealer.  In the case of a licensee operating a truck or
 
                            -50-     LRB093 07237 RCE 07394 b
 1    tractor trailer unit for the purpose of purchasing grain, the
 2    licensee  shall  have  a certificate carried in each truck or
 3    tractor trailer unit used in connection with  the  licensee's
 4    grain dealer business.
 5        (c)  The  licensee  must  have  at  all  times sufficient
 6    financial resources to pay  producers  on  demand  for  grain
 7    purchased from them.
 8        (d)  A  licensee that is solely a grain dealer shall on a
 9    daily basis maintain an  accurate  and  current  daily  grain
10    transaction report.
11        (e)  A  licensee  that  is  both  a  grain  dealer  and a
12    warehouseman shall at all  times  maintain  an  accurate  and
13    current daily position record.
14        (f)  In  the  case  of  a  change of ownership of a grain
15    dealer, the obligations of a grain dealer do not cease  until
16    the  grain  dealer  has  surrendered  all  unused price later
17    contracts to the Department and the successor has executed  a
18    successor's  agreement  that is acceptable to the Department,
19    or  the  successor  has  otherwise  provided  for  the  grain
20    obligations of its predecessor in a manner that is acceptable
21    to the Department.
22        (g)  If a grain dealer proposes to cease  doing  business
23    as  a  grain dealer and there is no successor, it is the duty
24    of the grain dealer  to  surrender  all  unused  price  later
25    contracts  to  the  Department,  together  with  an affidavit
26    accounting for all grain dealer obligations setting forth the
27    arrangements made with producers for final disposition of the
28    grain dealer obligations and  indicating  the  procedure  for
29    payment  in full of all outstanding grain obligations.  It is
30    the duty of the Department to give notice by publication that
31    a grain dealer has ceased doing business without a successor.
32    After payment in full of all outstanding  grain  obligations,
33    it is the duty of the grain dealer to surrender its license.
34    (Source: P.A. 91-213, eff. 7-20-99.)
 
                            -51-     LRB093 07237 RCE 07394 b
 1        (240 ILCS 40/10-15)
 2        Sec. 10-15.  Price later contracts.
 3        (a)  Price  later  contracts  shall  be  written on forms
 4    prescribed or authorized  by  the  Department.   Price  later
 5    contract  forms  shall  be  printed by a person authorized to
 6    print those contracts by the Department after that person has
 7    agreed to comply with each of the following:
 8             (1)  That all price later contracts shall be printed
 9        as  prescribed by the Department  and  shall  be  printed
10        only for a licensed grain dealer.
11             (2)  That   all   price  later  contracts  shall  be
12        numbered consecutively and a  complete  record  of  these
13        contracts  shall be retained showing for whom printed and
14        the consecutive numbers printed on the contracts.
15             (3)  That a duplicate copy of all invoices  rendered
16        for  printing  price  later  contracts that will show the
17        consecutive numbers printed on  the  contracts,  and  the
18        number  of contracts printed, shall be promptly forwarded
19        to the Department.
20             (4)  that  the  person  shall  register   with   the
21        Department  and pay an annual registration fee of $100 to
22        print price later contracts.
23        (b)  A grain  dealer  purchasing  grain  by  price  later
24    contract  shall  at  all  times  own  grain, rights in grain,
25    proceeds from the sale of grain, and other assets  acceptable
26    to  the  Department as set forth in this Code totaling 90% of
27    the unpaid balance of  the  grain  dealer's  obligations  for
28    grain  purchased  by price later contract.  That amount shall
29    at all times remain unencumbered and shall be represented  by
30    the aggregate of the following:
31             (1)  Grain owned by the grain dealer valued by means
32        of  the  hedging  procedures method that includes marking
33        open contracts to market.
34             (2)  Cash on hand.
 
                            -52-     LRB093 07237 RCE 07394 b
 1             (3)  Cash held on  account  in  federally  or  State
 2        licensed financial institutions.
 3             (4)  Investments   held   in   time   accounts  with
 4        federally or State licensed financial institutions.
 5             (5)  Direct obligations of the U.S. government.
 6             (6)  Funds on deposit in grain margin accounts.
 7             (7)  Balances due or to become due to  the  licensee
 8        on price later contracts.
 9             (8)  Marketable securities, including mutual funds.
10             (9)  Irrevocable  letters  of credit in favor of the
11        Department and acceptable to the Department.
12             (10)  Price later contract service charges due or to
13        become due to the licensee.
14             (11)  Other evidence of proceeds from  or  of  grain
15        that is acceptable to the Department.
16        (c)  For  the  purpose  of  computing the dollar value of
17    grain  and  the  balance  due   on   price   later   contract
18    obligations,  the  value  of  grain  shall  be figured at the
19    current market price.
20        (d)  Title to grain sold by price  later  contract  shall
21    transfer  to  a  grain  dealer  at  the  time  on the date of
22    delivery of the grain.  Therefore, no storage  charges  shall
23    be  made  with  respect  to  grain  purchased  by price later
24    contract.   A  service  charge  for  handling  the  contract,
25    however, may be made.
26        (e)  Subject to subsection (f)  of  this  Section,  if  a
27    price  later  contract is not signed by all parties within 30
28    days of the last date of delivery of  grain  intended  to  be
29    sold  by  price later contract, then the grain intended to be
30    sold by price later contract shall  be  priced  on  the  next
31    business  day after 30 days from the last date of delivery of
32    grain intended to be sold by  price  later  contract  at  the
33    market  price  of the grain at the close of the next business
34    day after the 29th day. When the grain is priced  under  this
 
                            -53-     LRB093 07237 RCE 07394 b
 1    subsection,  the grain dealer shall send notice to the seller
 2    of the grain within 10 days. The  notice  shall  contain  the
 3    number  of bushels sold, the price per bushel, all applicable
 4    discounts, the net proceeds, and a notice  that  states  that
 5    the  Grain  Insurance  Fund  shall  provide  protection for a
 6    period of only 160 days from  the  date  of  pricing  of  the
 7    grain.
 8        (f)  If  grain  is  in storage with a warehouseman and is
 9    intended to be sold by price later contract, that grain shall
10    be considered as remaining in storage and not be deemed  sold
11    by  price  later  contract  until  the  date  the price later
12    contract is signed by all parties.
13        (g)  Scale  tickets  or  other  approved  documents  with
14    respect to grain purchased by a grain dealer by  price  later
15    contract  shall  contain  the  following:  "Sold Grain; Price
16    Later".
17        (h)  Price later contracts shall be issued  consecutively
18    and recorded by the grain dealer as established by rule.
19        (i)  A licensee grain dealer shall not issue a collateral
20    warehouse  receipt  on  grain  purchased  by  a  price  later
21    contract  to  the extent the purchase price has not been paid
22    by the licensee grain dealer.
23        (j)  Failure to comply  with  the  requirements  of  this
24    Section may result in suspension of the privilege to purchase
25    grain by price later contract for up to one year.
26        (k)  When  a producer with a price later contract selects
27    a price for all or any part of the grain represented by  that
28    contract,  then  within  3  business  days  after  that price
29    selection,  the  licensee  shall  mail  to  that  producer  a
30    confirmation of the price selection, clearly  and  succinctly
31    indicating the price selected.
32        (l)  A  licensee  shall send letters, by registered mail,
33    to  the  holders  of  all  of  its  outstanding  price  later
34    contracts no more than 60 days  and  no  less  than  30  days
 
                            -54-     LRB093 07237 RCE 07394 b
 1    before  the  end  of the 365-day period that commenced on the
 2    later of the date of execution of each  of  the  price  later
 3    contracts or delivery of the grain covered by the price later
 4    contracts.   These   letters   shall   be   headed  "Reminder
 5    Notification" and shall clearly indicate the date the 365-day
 6    period of coverage under the Code  ends  for  each  of  those
 7    outstanding price later contracts.
 8    (Source: P.A. 91-213, eff. 7-20-99.)

 9        (240 ILCS 40/10-20)
10        Sec. 10-20.  Duties and requirements of warehouseman.
11        (a)  It  is the duty of every warehouseman to receive for
12    storage any grain that may be tendered to it in the  ordinary
13    course of business so far as the licensed storage capacity of
14    the  warehouse  permits  and  if  the  grain  is  of  a  kind
15    customarily  stored  by  the  warehouseman and is in suitable
16    condition for storage.
17             (1)  If the condition of grain offered  for  storage
18        might  adversely  affect  the  condition  of grain in the
19        warehouse, a warehouseman need not receive the grain  for
20        storage,  but  if  a warehouseman does receive the grain,
21        then it must be stored in a manner that  will  not  lower
22        the grade of other grain in the warehouse.
23             (2)  A    warehouseman   shall   provide   competent
24        personnel and equipment to weigh and grade all  grain  in
25        and out of storage.
26             (3)  A  warehouseman  shall  maintain  all  licensed
27        warehouse facilities in a manner suitable to preserve the
28        quality and quantity of grain stored.
29        (b)  For the purposes of the Department's examinations, a
30    warehouseman  shall  provide  and  maintain safe and adequate
31    means of ingress and egress to the  various  and  surrounding
32    areas  of  the  facilities, storage bins, and compartments of
33    the warehouse.
 
                            -55-     LRB093 07237 RCE 07394 b
 1        (c)  A warehouseman shall at all times have a  sufficient
 2    quantity  of  grain  of  like  kind  and  quality to meet its
 3    outstanding storage obligations.
 4        (d)  A warehouseman shall not store grain  in  excess  of
 5    the capacity for which it is licensed.
 6        (e)  A   warehouseman   may   redeposit  grain  from  its
 7    warehouse with another warehouseman or a federal warehouseman
 8    in an  additional quantity not to exceed the licensed storage
 9    capacity of its own warehouse.
10             (1)  If grain is redeposited  as  provided  in  this
11        Section,  a  warehouseman  must  retain  the  receipt  it
12        obtains  from  the  second  warehouseman  as proof of the
13        redeposit  and  retain  sufficient   control   over   the
14        redeposited   grain   as  is  necessary  to  comply  with
15        directions   of   the   original   depositor    regarding
16        disposition of the redeposited grain.
17             (2)  While  grain  is en route from the redepositing
18        warehouseman to the second warehouseman,  a  redepositing
19        warehouseman  must retain an original or a duplicate bill
20        of lading instead of and until such time  as  it  obtains
21        possession   of   the   warehouse  receipt  as  proof  of
22        disposition of the redeposited grain.
23        (f)  Schedule of rates and licenses.
24             (1)  A warehouseman shall file its schedule of rates
25        with the Department and shall post its warehouse  license
26        and  a  copy  of  the  schedule of rates on file with the
27        Department in a conspicuous place in each location of the
28        warehouseman where grain is received.
29             (2)  The schedule  of  rates  shall  be  on  a  form
30        prescribed  by the Department and shall include the names
31        and genuine signatures of all persons authorized to  sign
32        warehouse receipts issued by the warehouseman.
33             (3)  To  change the schedule of rates or the name of
34        any person  authorized  to  sign  warehouse  receipts,  a
 
                            -56-     LRB093 07237 RCE 07394 b
 1        warehouseman  must  file  with  the  Department a revised
 2        schedule of  rates  and,  thereafter,  post  the  revised
 3        schedule  of  rates  at each location of the warehouseman
 4        where grain is received.  The revised schedule  of  rates
 5        shall  be deemed filed with the Department on the earlier
 6        of the date it is delivered to the Department  or  mailed
 7        to  the  Department  by certified mail properly addressed
 8        with sufficient postage attached.  The  revised  schedule
 9        of  rates  shall be effective on the date the schedule of
10        rates  is  posted  after  delivery  or  mailing  to   the
11        Department  in  accordance  with  this  Section.  Revised
12        schedules of rates shall apply only  to  grain  delivered
13        for  storage  after  the  effective  date  of the revised
14        schedule of rates.  No grain in storage at  the  time  of
15        the  effective  date of a revised schedule of rates shall
16        be subject to a revised schedule of rates until one  year
17        after  the  date  of  delivery of grain, unless otherwise
18        provided by a written contract.
19             (4)  The schedule  of  rates  may  provide  for  the
20        negotiation  of  different  rates for large deliveries of
21        grain if those rates are applied on a  uniform  basis  to
22        all depositors under the same circumstances.
23        (g)  A  warehouseman  may  refuse  to accept grain if the
24    identity of the grain is to be preserved.  If a  warehouseman
25    accepts  grain  and  the  identity  of  the  grain  is  to be
26    preserved, the evidence of storage shall state  on  its  face
27    that  the grain is stored with its identity preserved and the
28    location of that grain.
29        (h)  A  warehouseman  shall  at  all  times  maintain  an
30    accurate and current daily position record on a daily basis.
31        (i)  In the case of a change of ownership of a warehouse,
32    the obligations of a warehouseman  do  not  cease  until  its
33    successor  is properly licensed under this Code or the United
34    States Warehouse Act, it has surrendered all unused warehouse
 
                            -57-     LRB093 07237 RCE 07394 b
 1    receipts to the Department and  has  executed  a  successor's
 2    agreement,  or  the  successor has otherwise provided for the
 3    obligations of its predecessor.
 4        (j)  If a warehouseman proposes to cease  doing  business
 5    as  a  warehouseman and there is no successor, it is the duty
 6    of  the  warehouseman  to  surrender  all  unused   warehouse
 7    receipts  to  the  Department,  together  with  an  affidavit
 8    accounting  for  all  warehouse  receipts  setting  forth the
 9    arrangements made with depositors for  final  disposition  of
10    the grain in storage and indicating the procedure for payment
11    in full of all outstanding obligations. After payment in full
12    of  all  outstanding  obligations,  it  is  the  duty  of the
13    warehouseman to surrender its license.
14        (k)  Requests by a warehouseman for special examinations,
15    grain  inventory  computation,  or  verification   of   grain
16    quantity or quality shall be accompanied by a fee of $200.
17        (l)  For   purposes  of  this  Section,  "like  kind  and
18    quality" means the type of commodity  and  a  combination  of
19    grade,  specialty  traits,  if any, and class or sub-class as
20    applicable.
21        (m)  Nothing in this Section  is  deemed  to  prohibit  a
22    warehouseman from entering into agreements with depositors of
23    grain relating to allocation or reservation of storage space.
24    (Source: P.A. 89-287, eff. 1-1-96.)

25        (240 ILCS 40/15-15)
26        Sec. 15-15.  Violations of open position limits.
27        (a)  Violations of maximum allowable open position limits
28    by  more  than  1,000 bushels but less than twice the maximum
29    allowable open position limits.
30             (1)  If a licensee violates  the  maximum  allowable
31        open  position limits of item (a)(2) of Section 10-10 and
32        the open position is more than  1,000  bushels  but  less
33        than  twice  the  maximum allowable open position limits,
 
                            -58-     LRB093 07237 RCE 07394 b
 1        the licensee shall be required to:
 2                  (A)  Post collateral with the Department in  an
 3             amount   equal  to  $1 per bushel for each bushel of
 4             soybeans in excess of  the  maximum  allowable  open
 5             position  limits  and  50  cents  per bushel of each
 6             bushel for all other grain in excess of the  maximum
 7             allowable  open position limits or $2,500, whichever
 8             is greater; and
 9                  (B)   Pay a penalty in an amount not to  exceed
10             $250.
11             (2)  If a licensee commits 2 violations as set forth
12        in  item (a) (1) of Section 15-10 within a 2 year period,
13        the licensee must:
14                  (A)  post collateral with the Department in  an
15             amount  equal  to  $1  per bushel for each bushel of
16             soybeans in excess of  the  maximum  allowable  open
17             position  limits  and  50  cents  per bushel of each
18             bushel for all other grain in excess of the  maximum
19             allowable  open position limits or $5,000, whichever
20             is greater; and
21                  (B)  pay a penalty in the amount of $750 $500.
22             (3)  If a licensee commits 3 or more  violations  as
23        set forth in item (a)(1) of Section 15-10 within a 5 year
24        period, the licensee must:
25                  (A)  post  collateral with the Department in an
26             amount equal to $2 per bushel  for  each  bushel  of
27             soybeans  in  excess  of  the maximum allowable open
28             position limits and $1 per bushel of each bushel for
29             all other grain in excess of the  maximum  allowable
30             open   position  limits  or  $10,000,  whichever  is
31             greater; and
32                  (B)  pay a penalty in an  amount  greater  than
33             $2,000 $1,000 but less than $20,000 $10,000.
34        (b)  Violations of maximum allowable open position limits
 
                            -59-     LRB093 07237 RCE 07394 b
 1    that  equal  or  exceed  twice  the  maximum  allowable  open
 2    position.
 3             (1)  If  a  licensee  violates the maximum allowable
 4        open position limits of item (a)(2) of Section 10-10  and
 5        the  open  position  equals  or exceeds twice the maximum
 6        allowable open position limits, the licensee must:
 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  and 50 cents per bushel for each bushel of
11             all other grain in excess of the  maximum  allowable
12             open   position   limits  or  $5,000,  whichever  is
13             greater; and
14                  (B)  pay a penalty in the amount of $500.00.
15             (2)  If a licensee commits 2 violations as set forth
16        in item (b)(1) of Section 15-10 within a 2  year  period,
17        the licensee must:
18                  (A)  post  collateral with the Department in an
19             amount equal to $2 per bushel  for  each  bushel  of
20             soybeans  in  excess  of  the maximum allowable open
21             position limits and $1 per bushel for each bushel of
22             all other grain in excess of the  maximum  allowable
23             open  position  limits  or    $10,000,  whichever is
24             greater; and
25                  (B)  pay a penalty in an  amount  greater  than
26             $750 $500 but less 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 15-5 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  for  each  bushel
34             for  all  other  grain  in  excess  of  the  maximum
 
                            -60-     LRB093 07237 RCE 07394 b
 1             allowable open position limits or $10,000, whichever
 2             is 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    (Source: P.A. 89-287, eff. 1-1-96.)

 6        (240 ILCS 40/15-20)
 7        Sec. 15-20.  Grain quantity and grain quality violations.
 8        (a)  Grain quantity deficiencies of more than $1,000  but
 9    less than $20,000.
10             (1)  If  a  licensee  fails  to  have  a  sufficient
11        quantity  of  grain  in store to meet outstanding storage
12        obligations  and  the  value  of   the   grain   quantity
13        deficiency  as  determined  by  the  formula set forth in
14        subsection (c) of Section 15-20 is more than  $1,000  but
15        less than $20,000, the licensee must:
16                  (A)  post  collateral with the Department in an
17             amount equal to the  value  of  the  grain  quantity
18             deficiency or $2,500, whichever is greater; and
19                  (B)  pay a penalty of $250.
20             (2)  If a licensee commits 2 violations as set forth
21        in  item  (a)(1) of Section 15-20 within a 2 year period,
22        the licensee must:
23                  (A)  post collateral with the Department in  an
24             amount  equal  to  the  value  of the grain quantity
25             deficiency or $10,000, whichever is greater; and
26                  (B)  pay a penalty of $750 $500.
27             (3)  If a licensee commits 3 or more  violations  as
28        set forth in item (a)(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 the  value  of  the  grain  quantity
32             deficiency or $20,000, whichever is greater; and
33                  (B)  pay  a  penalty  of  no  less  than $2,000
 
                            -61-     LRB093 07237 RCE 07394 b
 1             $1,000 and no greater than $20,000 $10,000.
 2        (b)  Grain quantity deficiencies of $20,000 or more.
 3             (1)  If a licensee fails to have sufficient quantity
 4        of grain in store to meet outstanding storage obligations
 5        and  the  value  of  the  grain  quantity  deficiency  as
 6        determined by the formula set forth in subsection (c)  of
 7        Section  15-20  equals  or  exceeds $20,000, the licensee
 8        must:
 9                  (A)  post collateral with the Department in  an
10             amount  equal  to  twice  the  value  of  the  grain
11             quantity deficiency; and
12                  (B)  pay a penalty of $500.
13             (2)  If a licensee commits 2 violations as set forth
14        in  item  (b)(1) of Section 15-20 within a 2 year period,
15        the licensee must:
16                  (A)  post collateral with the Department in  an
17             amount  equal  to  twice  the  value  of  the  grain
18             quantity   deficiency   or   $20,000,  whichever  is
19             greater; and
20                  (B)  pay a penalty of no less  than  $750  $500
21             and no greater than $15,000 $10,000.
22             (3)  If  a  licensee commits 3 or more violations as
23        set forth in item (b)(1) of Section 15-20 within a 5 year
24        period, the licensee must:
25                  (A)  post collateral with the Department in  an
26             amount  equal  to  twice  the  value  of  the  grain
27             quantity   deficiency   or   $40,000,  whichever  is
28             greater; and
29                  (B)  pay a  penalty  of  no  less  than  $2,000
30             $1,000 and no greater than $20,000 $10,000.
31        (c)  To   determine  the  value  of  the  grain  quantity
32    deficiency for the purposes of this Section, the  rate  shall
33    be $1 per bushel for soybeans and 50 cents per bushel for all
34    other grains.
 
                            -62-     LRB093 07237 RCE 07394 b
 1        (d)  If  a  licensee  fails to have sufficient quality of
 2    grain in store to meet outstanding storage  obligations  when
 3    the value of the grain quality deficiency exceeds $1,000, the
 4    licensee  must  post  collateral  with  the  Department in an
 5    amount equal to the value of the  grain  quality  deficiency.
 6    For  the  purposes  of  this  Section, the value of the grain
 7    quality deficiency shall be determined by applying prevailing
 8    market discount factors to all grain quality factors.
 9    (Source: P.A. 89-287, eff. 1-1-96; 89-463, eff. 5-31-96.)

10        (240 ILCS 40/15-30)
11        Sec. 15-30.  Financial and record  keeping  deficiencies;
12    collateral and guarantees.
13        (a)  An   applicant   or   a  licensee  has  a  financial
14    deficiency  if  it  does  not  meet  the  minimum   financial
15    requirements  of  Section  5-25 and subsection (b) of Section
16    10-15 of this Code.
17        (b)  A  licensee   must   collateralize   all   financial
18    deficiencies  at the rate of one dollar's worth of collateral
19    for each dollar of the aggregate sum of the individual  ratio
20    deficiencies,  the  net  worth  deficiencies,  and  90% asset
21    requirement deficiencies.
22        (c)  A licensee who  is  found  to  have  record  keeping
23    deficiencies,  other  than  in reference to violations as set
24    forth in subsection (b) of  Section  10-15  and  in  Sections
25    15-15  and  15-20,  may be required by the Department to post
26    collateral up to the amount of $10,000.
27        (d)  If an applicant for a new license or a renewal of  a
28    license  has  financial  deficiencies  or  the Department has
29    reason  to  believe  that  the  financial  stability  of   an
30    applicant  or  a  licensee is in question, the Department may
31    require the applicant or licensee to provide the  Department,
32    in  addition  to  collateral,  personal,  corporate, or other
33    related  person  guarantees  in  a  form  and  in  an  amount
 
                            -63-     LRB093 07237 RCE 07394 b
 1    satisfactory to the Department.
 2        (e)  Subject to  subsection  (c)  of  Section  5-15,  the
 3    posting of collateral and the delivery of guarantees does not
 4    relieve  a licensee of the continuing obligation to otherwise
 5    comply with the requirements imposed by the Code.
 6    (Source: P.A. 89-287, eff. 1-1-96.)

 7        (240 ILCS 40/15-35)
 8        Sec. 15-35.  Return of collateral and guarantees.  If the
 9    next fiscal year's financial statement of a licensee received
10    by  the  Department  and  an  examination  performed  by  the
11    Department  after  delivery  or  posting  of   any   required
12    collateral  or  the  guarantee  indicates  compliance  by the
13    licensee with all statutory requirements  of  this  Code  for
14    which  the  collateral  and  guarantees  were  required,  the
15    collateral  and  guarantee shall be returned within 90 days a
16    reasonable period of time to the licensee and  the  guarantor
17    following  a  written  request for the return.  The financial
18    statement must comply with the requirements of Section 5-20.
19    (Source: P.A. 89-287, eff. 1-1-96.)

20        (240 ILCS 40/15-40)
21        Sec. 15-40.  Suspension and revocation of license.
22        (a)  The Director shall may suspend a  license  and  take
23    possession  and control of all grain assets and equity assets
24    (except that the  Department  may  not  take  possession  and
25    control  of  any  equity  asset  on  which  there  is a valid
26    security interest or other  valid  lien  without  the  prior,
27    written  permission  of  the secured party or lien holder) of
28    the suspended  licensee  if  the  Department  has  reason  to
29    believe that any of the following has occurred:
30             (1)  A  licensee  has  made  a formal declaration of
31        insolvency; failed to apply for license renewal,  leaving
32        indebtedness  to  claimants;  or  been  denied  a license
 
                            -64-     LRB093 07237 RCE 07394 b
 1        renewal, leaving indebtedness to claimants experienced  a
 2        failure  or is unable to financially satisfy claimants in
 3        accordance with applicable statute, rule, or agreement if
 4        a bona fide dispute does not exist between  the  licensee
 5        and a claimant.
 6             (2)  A  licensee  has  failed  to pay a producer, on
 7        demand, for grain purchased from that producer,  assuming
 8        no  bona  fide dispute exists with regard to the payment,
 9        and does not make that payment after being ordered to  do
10        so by the Department.
11             (3)  A  licensee  is otherwise unable to financially
12        satisfy  claimants  in  accordance  with  any  applicable
13        statute, rule, or agreement, assuming a bona fide dispute
14        does not exist between the licensee and the claimant.
15             (4)  A  licensee  has  violated  any  of  the  other
16        provisions of this Code and the violation, or the pattern
17        of the violations, indicates an immediate danger of  loss
18        to  potential claimants violated any of the provisions of
19        this Code and   the  violation  or  the  pattern  of  the
20        violations  indicates  an  immediate  danger  of  loss to
21        potential claimants.
22             (5) (3)  A  licensee  has  failed  fails  to  pay  a
23        penalty or post  collateral or  guarantees  by  the  date
24        ordered by the Director.
25             (6) (4)  A  licensee  has  failed  fails  to  pay an
26        assessment as required by Section 5-30.
27        (b)  The Director may revoke a  license  if  any  of  the
28    following   occurs:   (1)  the   Director   finds,  after  an
29    administrative  hearing,  that  any  of   the   grounds   for
30    suspension  under  item  (a)(1),  (a)(2),  (a)(3), or (a)(4),
31    (a)(5), or (a)(6) of Section 15-40 have occurred.
32        (c) (2)  When a licensee voluntarily files for bankruptcy
33    under the federal bankruptcy laws, that filing constitutes  a
34    revocation of the license of the licensee on the day that the
 
                            -65-     LRB093 07237 RCE 07394 b
 1    filing occurs.
 2        (d) (3)  When an order for relief is entered in reference
 3    to  a licensee as a consequence of a petition for involuntary
 4    bankruptcy filed under  the  federal  bankruptcy  laws,  that
 5    order  constitutes a revocation of the license on the date of
 6    that order.
 7        (e) (c)   Within 10 days after suspension of  a  license,
 8    an  administrative  hearing  shall  be commenced to determine
 9    whether the license shall be reinstated or revoked.  Whenever
10    an administrative hearing is scheduled, the licensee shall be
11    served with written notice of the date, place,  and  time  of
12    the  hearing  at  least  5 days before the hearing date.  The
13    notice may be served by personal service on the  licensee  or
14    by mailing it by registered or certified mail, return receipt
15    requested, to the licensee's place of business.  The Director
16    may,  after  a  hearing,  issue  an  order either revoking or
17    reinstating the license.
18    (Source: P.A. 89-287, eff. 1-1-96.)

19        (240 ILCS 40/15-45)
20        Sec. 15-45.  Criminal offenses.
21        (a)  A person who causes a warehouse receipt for grain to
22    be issued knowing that the grain  for  which  that  warehouse
23    receipt  is issued is not under the licensee's control at the
24    time of issuing that  warehouse  receipt,  or  who  causes  a
25    licensee  to issue a warehouse receipt for grain knowing that
26    the warehouse receipt contains any false  representation,  is
27    guilty of a Class 2 3 felony.
28        (b)  A   person   who,   knowingly   and  without  lawful
29    authority,  disposes  of  grain  represented  by  outstanding
30    warehouse  receipts  or  covered   by   unreceipted   storage
31    obligations is guilty of a Class 2 3 felony.
32        (c)  A   person   who,   knowingly   and  without  lawful
33    authority:
 
                            -66-     LRB093 07237 RCE 07394 b
 1             (1)  withholds records from the Department;
 2             (2)  keeps, creates, or files  with  the  Department
 3        false, misleading, or inaccurate records;
 4             (3)  alters   records   without  permission  of  the
 5        Department; or
 6             (4)  presents to the Department any materially false
 7        or misleading records;
 8    is guilty of a Class 2 3 felony.
 9        (d)  A licensee who, after suspension  or  revocation  of
10    its license, knowingly and without legal authority refuses to
11    surrender  to the Department all books, accounts, and records
12    relating to the  licensee  that  are  in  its  possession  or
13    control is guilty of a Class 2 3 felony.
14        (e)  A   licensee   who   knowingly  impedes,  obstructs,
15    hinders, or otherwise prevents or  attempts  to  prevent  the
16    Director  from  performing his or her duties under this Code,
17    or  who  knowingly  refuses  to  permit  inspection  of   its
18    premises,  books,  accounts, or records by the Department, is
19    guilty of a Class A misdemeanor.
20        (f)  A person  who,  knowingly  and  without  a  license,
21    engages  in  the business of a grain dealer or a warehouseman
22    for which a license is required under the Code is guilty of a
23    Class A misdemeanor.
24        (g)  A person who, intentionally, knowingly  and  without
25    lawful authority:
26             (1)  fails to maintain sufficient assets as required
27        by subsection (b) of Section 10-15; or
28             (2)  issues  a collateral warehouse receipt covering
29        grain purchased by a price later contract to  the  extent
30        the purchase price has not been paid by the grain dealer;
31    is guilty of a Class 3 4 felony.
32        (h)  In  case  of  a  continuing  violation,  each  day a
33    violation occurs constitutes a separate and distinct offense.
34    (Source: P.A. 89-287, eff. 1-1-96.)
 
                            -67-     LRB093 07237 RCE 07394 b
 1        (240 ILCS 40/20-10)
 2        Sec. 20-10.  Lien on grain assets and equity assets.
 3        (a)  A statutory lien  shall  be  imposed  on  all  grain
 4    assets and equity assets in favor of and to secure payment of
 5    obligations of the licensee to:
 6             (1)  A  person,  including,  without  limitation,  a
 7        lender:
 8                  (A)  who  possesses  warehouse  receipts issued
 9             from an Illinois warehouse location  covering  grain
10             owned or stored by a warehouseman;
11                  (B)  who   has  other  written  evidence  of  a
12             storage obligation of a warehouseman issued from  an
13             Illinois  warehouse location in favor of the holder,
14             including,  but  not  limited  to,  scale   tickets,
15             settlement sheets, and ledger cards; or
16                  (C)  who has loaned money to a warehouseman and
17             was  to receive a warehouse receipt from an Illinois
18             location as security for that loan,  who surrendered
19             warehouse receipts as a part of a grain sale  at  an
20             Illinois location, or who has delivered grain out of
21             storage  with  the warehouseman as a part of a grain
22             sale at an Illinois location and:
23                       (i)  the  grain  dealer  or   warehouseman
24                  experienced    a   failure   within   21   days
25                  thereafter, a warehouse receipt was not issued,
26                  and payment in full was not made; or
27                       (ii)  written  notice  was  given  by  the
28                  person  to  the  Department  within   21   days
29                  thereafter stating that a warehouse receipt was
30                  not issued and payment in full was not made.
31             (2)  A  producer  who possesses evidence of the sale
32        at an Illinois location of grain delivered to that failed
33        a grain dealer, or its designee, and who  was  not  fully
34        paid in full.
 
                            -68-     LRB093 07237 RCE 07394 b
 1             (3)  A  person  who  made  prepayments  to  a failed
 2        licensee for agricultural production inputs (seed,  feed,
 3        petroleum  products,  fertilizer,  and  chemicals) and at
 4        time  of  the  licensee's  failure   had   not   received
 5        possession   of   all   of   those  prepaid  agricultural
 6        production inputs.
 7        This statutory lien arises, attaches, and is perfected at
 8    the date of delivery of grain, and is  at  that  time  deemed
 9    assigned by the operation of this Code to the Department.
10        (b)  The  lien on grain assets created under this Section
11    shall be preferred and prior to any other lien,  encumbrance,
12    or  security  interest  relating to those assets described in
13    the definition of "grain assets" in Section 1-10,  regardless
14    of  the  time  the  other  lien,  encumbrances,   or security
15    interest attached or became perfected.  The  lien  on  equity
16    assets created under this Section shall also be preferred and
17    prior  to  any  other lien, encumbrance, or security interest
18    relating to "equity assets" as defined in Section 1-10 to the
19    extent a creditor does not have a valid security interest in,
20    or other lien on, the property that was  perfected  prior  to
21    the  date  of  failure  of  the  licensee. The lien on equity
22    assets  created  under  this  Section,  however,   shall   be
23    subordinate  and  subject  to any other lien, encumbrance, or
24    security interest relating to "equity assets" as  defined  in
25    Section  1-10  to  the extent a creditor has a valid security
26    interest in or other valid lien  on  the  property  that  was
27    perfected prior to the date of failure of the licensee.
28        (c)  To  the  extent  any  portion of this Code conflicts
29    with  any  portion  of  the  Uniform  Commercial  Code,   the
30    provisions of this Code control.
31        (d)  If an adversarial proceeding is commenced to recover
32    "grain  assets"  or "equity assets" upon which a lien created
33    under this Section is imposed and if the Department  declines
34    to  take part in that adversarial proceeding, the Department,
 
                            -69-     LRB093 07237 RCE 07394 b
 1    upon application to  the  Director  by  any  claimant,  shall
 2    assign  to  the  claimant  the  statutory  lien to permit the
 3    claimant to pursue the lien in  the  adversarial  proceeding,
 4    but  only  if  the assignment and adversarial proceeding will
 5    not delay the Department's liquidation  and  distribution  of
 6    grain  assets,  equity  assets,  collateral,  and guarantees,
 7    including proceeds thereof, to all  claimants  holding  valid
 8    claims.
 9    (Source: P.A. 89-287, eff. 1-1-96.)

10        (240 ILCS 40/20-15)
11        Sec.  20-15.   Liquidation  procedures.   When a licensee
12    experiences a failure, the Department has  the  authority  to
13    and shall:
14        (a)  Immediately  post  notice  at  all  locations of the
15    failed licensee stating that the licensee has  experienced  a
16    failure  and  that  the license has been terminated and is no
17    longer effective.
18        (b)  Immediately take physical control and possession  of
19    the  failed licensee's facility, including but not limited to
20    all offices and grain storage facilities, books, records, and
21    any other property necessary or desirable to liquidate  grain
22    assets and equity assets.
23        (c)  Give  public  notice  and notify all known potential
24    claimants by certified mail of the licensee's failure and the
25    processes necessary to file grain claims with the  Department
26    as set forth in Section 25-5.
27        (d)  Perform an examination of the failed licensee.
28        (e)  Seize  and  take  possession of, protect, liquidate,
29    and collect upon all grain assets, collateral, and guarantees
30    of or  relating  to  the  failed  licensee  and  deposit  the
31    proceeds  into  the Trust Account. If at any time it appears,
32    however, in the judgment of the Department that the costs  of
33    seizing and taking possession of, liquidating, and collecting
 
                            -70-     LRB093 07237 RCE 07394 b
 1    upon  any  or  all  of  the  grain  assets,  collateral,  and
 2    guarantees  equals  or  exceeds  the expected recovery to the
 3    Department, the Department may elect not  to  pursue  seizing
 4    and  taking  possession  of, liquidating, and collecting upon
 5    any or all of the assets.
 6        (f)  Seize, take possession of, protect,  liquidate,  and
 7    collect  upon  the  equity  assets of the failed licensee and
 8    deposit the proceeds into the Trust account if the Department
 9    has first obtained the  written  consent  of  all  applicable
10    secured  parties  or lien holders, if any.  If at any time it
11    appears, however, in the judgment of the Department that  the
12    costs  of  seizing and taking possession of, liquidating, and
13    collecting upon any or all of the  equity  assets  equals  or
14    exceeds   the   expected  recovery  to  the  Department,  the
15    Department  may  elect  not  to  pursue  seizing  and  taking
16    possession of, liquidating, and collecting upon any or all of
17    the equity assets.  If  the  Department  does  not  otherwise
18    pursue  seizing  and  taking  possession of, liquidating, and
19    collecting upon any of the equity assets, the Department  may
20    bring   or  participate  in  any  liquidation  or  collection
21    proceedings involving the applicable secured parties or other
22    interested party, if any,  and  shall  have  the  rights  and
23    remedies  provided by law, including the right to enforce its
24    lien by any available judicial procedure.
25        If an applicable secured party or lien  holder  does  not
26    consent  to  the  Department  seizing,  taking possession of,
27    liquidating,  or  collecting  upon  the  equity  assets,  the
28    secured party or  lien  holder  shall  have  the  rights  and
29    remedies provided by law or by agreement with the licensee or
30    failed  licensee, including the right to enforce its security
31    interest or lien by any available judicial procedure.
32        (g)  Make available on demand to  an  applicable  secured
33    party  or  lien  holder  the  equity asset, to the extent the
34    Department seized or otherwise gained possession  or  control
 
                            -71-     LRB093 07237 RCE 07394 b
 1    of  the  equity  asset,  but the secured party or lien holder
 2    does not consent to the Department liquidating and collecting
 3    upon the equity asset.
 4    (Source: P.A. 89-287, eff. 1-1-96.)

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

29        (240 ILCS 40/25-5)
30        Sec. 25-5.   Adjudication of claims.  When a licensee has
31    experienced a  failure,  the  Department  shall  process  the
32    claims in the following manner:
 
                            -72-     LRB093 07237 RCE 07394 b
 1        (a)  The  Department  shall  publish once each week for 3
 2    successive weeks in a newspaper of general circulation within
 3    the county of the licensee, and shall mail or deliver to each
 4    claimant whose name and post office address are known or  are
 5    reasonably ascertainable by the Department, a notice stating:
 6             (1)  That the licensee has experienced a failure and
 7        the date of that failure.
 8             (2)  The  place and post office address where claims
 9        may be filed.
10             (3)  The procedure for filing claims, as  determined
11        by rule.
12             (4)  That a claimant's claims shall be barred if not
13        filed with the Department on or before the later of:
14                  (A)  the  claim  date,  which  shall be 90 days
15             after the date of failure of the licensee; or
16                  (B)  7 days from the date notice was mailed  to
17             a  claimant  if  the  date notice was mailed to that
18             claimant is on or before the claim date.
19        (b)  Time of notice.
20             (1)  The first date of publication of the notice  as
21        provided  for  in subsection (a) of this Section shall be
22        within 30 days after the date of failure.
23             (2)  The  published  notice  as  provided   for   in
24        subsection  (a)  of this Section shall be published in at
25        least 3 newspapers of general  circulation  in  the  area
26        formerly served by the failed licensee.
27             (3)  The notice as provided for in subsection (a) of
28        this  Section  shall  be mailed by certified mail, return
29        receipt requested, within  60  days  after  the  date  of
30        failure  to  each  claimant  whose  name  and post office
31        address are known by the Department within 60 days  after
32        the date of failure.
33        (c)  Every  claim filed must be in writing, and verified,
34    and signed by a person who has the legal authority to file  a
 
                            -73-     LRB093 07237 RCE 07394 b
 1    claim  on  behalf  of the claimant and must state information
 2    sufficient to notify the Department  of  the  nature  of  the
 3    claim and the amount sought.
 4        (d)  A  claim  shall  be  barred  and  disallowed  in its
 5    entirety if:
 6             (1)  notice is published and given to  the  claimant
 7        as  provided  for  in  subsections  (a)  and  (b) of this
 8        Section and the claimant does not file a claim  with  the
 9        Department on or before the claim date; or
10             (2)  the  claimant's  name or post office address is
11        not known by the Department or  cannot,  within  60  days
12        after  the  date of failure, be reasonably ascertained by
13        the Department and the claimant does  not  file  a  claim
14        with  the  Department on or before the later of the claim
15        date or 7 days after the date notice was mailed  to  that
16        claimant  if  the date notice was mailed to that claimant
17        is on or before the claim date.
18        (e)  Subsequent notice.
19             (1)  If, more than 60 days after the date of failure
20        but before the claim date, the Department learns  of  the
21        name  and  post  office  address  of  a  claimant who was
22        previously not notified by the Department  by  mail,  the
23        Department  shall  mail by certified mail, return receipt
24        requested, the notice to the claimant as provided for  in
25        subsection (a) of this Section.
26             (2)  The  notice  mailed  as  provided  for  in item
27        (e)(1) of this Section shall not  extend  the  period  of
28        time  in  which  a claimant may file its claim beyond the
29        claim date. A claimant to whom  notice  is  mailed  under
30        item  (e)(1)  of  this  Section,  however, shall have the
31        later of the claim date or 7 days after the  date  notice
32        was mailed to file a claim with the Department.
33        (f)  The   Department   shall   determine  the  validity,
34    category, and amount of each claim within 120 days after  the
 
                            -74-     LRB093 07237 RCE 07394 b
 1    date  of  failure  of  the  licensee and. (g)  The Department
 2    shall give written notice within that  time  period  to  each
 3    claimant  and  to  the  failed  licensee  of the Department's
 4    determination as to the validity,  category,  and  amount  of
 5    each claim.
 6        (g) (h)  A  claimant or the failed licensee may request a
 7    hearing on the  Department's  determination  within  30  days
 8    after  receipt of the written notice and the hearing shall be
 9    held in the county in which the failed  licensee  is  located
10    and  in  accordance  with rules. Under no circumstances shall
11    payment to claimants who have  not  requested  a  hearing  be
12    delayed  by  reason  of  the  request  for  a  hearing by any
13    unrelated claimant.
14        (h)  Within 30 days after a failure of  a  licensee,  the
15    Director  shall  appoint  an Administrative Law Judge for the
16    hearings.  The Director shall appoint a  person  licensed  to
17    practice   law   in   this  State;  who  is  believed  to  be
18    knowledgeable  with  regard  to  agriculture  and  the  grain
19    industry in Illinois; who has no conflict  of  interest;  and
20    who  at the time of his or her appointment is not working for
21    or employed by the Department in any capacity whatsoever.
22        (i)  For the purposes of this  Article,  the  "reasonably
23    ascertainable"   standard   shall   be   satisfied  when  the
24    Department conducts a review of the failed  licensee's  books
25    and records and an interview of office and clerical personnel
26    of the failed licensee.
27        (j)  The  time periods and deadlines in this Section 25-5
28    are absolute, and  they  are  not  to  be  tolled,  or  their
29    operation  halted  or  delayed,  by  reason  of  a bankruptcy
30    filing, litigation, administrative order, or any other reason
31    whatsoever. In the event of a bankruptcy by a  licensee,  the
32    Director shall, with dispatch, authorize or take legal action
33    and  authorize or commence proceedings that are necessary and
34    appropriate to lift the automatic stay or make  it  otherwise
 
                            -75-     LRB093 07237 RCE 07394 b
 1    inapplicable  to the actions of the Department with regard to
 2    the claims determination process. In  all  other  cases,  the
 3    Department shall expeditiously act to remove any order of any
 4    court  or  administrative  agency that might attempt to delay
 5    the time periods and  deadlines  contained  in  this  Section
 6    25-5.
 7    (Source: P.A. 89-287, eff. 1-1-96.)

 8        (240 ILCS 40/25-10)
 9        Sec. 25-10.  Claimant compensation.  Within 30 days after
10    the  day  on  which a claim becomes a valid claim, a claimant
11    shall be compensated to the extent  of  its  valid  claim  as
12    provided in this Section.
13        It  is  the  express intent of this legislation that each
14    undisputed portion of a claim shall  be  paid  in  accordance
15    with  the  deadlines of this Code, even if there are disputed
16    portions of the claim. For example, the amount calculated for
17    an "unpriced  obligation"  shall  be  paid  to  the  claimant
18    despite  the fact that claimant additionally seeks the amount
19    for a "priced obligation".
20        In addition, in the event of a bankruptcy filing when the
21    automatic stay that purportedly applies  to  the  payment  of
22    amounts due to valid claimants under this Code by reason of a
23    failure,  or  in  the  event of any other order of a court or
24    administrative  agency  that  purports  to  halt,  delay,  or
25    otherwise prevent the payment of all  amounts  due  to  valid
26    claimants  under this Code within the time deadline provided,
27    then the Department shall do the following: within  the  time
28    deadlines  stated  in this Code, pay all valid claimants, pro
29    rata, from all amounts not considered to be in the bankruptcy
30    estate;  provide   to   each   valid   claimant   a   written
31    communication indicating the amount being paid and the amount
32    yet  due, providing an explanation as to why the full payment
33    has not been made,  and  containing  a  promise  to  pay  the
 
                            -76-     LRB093 07237 RCE 07394 b
 1    remaining  amounts yet due as soon as funds become available;
 2    and expeditiously and vigorously take legal or administrative
 3    action, and commence  legal  or  administrative  proceedings,
 4    that  are  necessary  and  appropriate  to remove or lift any
 5    orders of  any  court  or  administrative  agency  that  have
 6    halted,  delayed,  or  impeded  in any way the payment of all
 7    amounts due to valid claimants under this Code.
 8        Each claimant shall be compensated in accordance with the
 9    following provisions:
10        (a)  Subject to subsection (i)  of  this  Section,  valid
11    claims filed by warehouse claimants shall be paid 100% of the
12    amount determined by the Department. Any person lending money
13    to a licensee and taking warehouse receipts on grain from the
14    licensee as collateral to secure the loan must demonstrate to
15    the  Department,  as  part  of  that person's warehouse claim
16    filing, that it used the same care  and  reasonable  business
17    practices  to  confirm the existence of the grain collateral,
18    prior to taking the warehouse receipts, as it ordinarily uses
19    to confirm the existence of other types of collateral, taking
20    into account, however, reasonable differences between  stored
21    grain  and  other  types  of  collateral. The warehouse claim
22    filing shall  contain  a  written  statement  specifying  the
23    measures  taken  to  confirm  the existence of the grain. The
24    Department may require further information in that regard, in
25    the sole discretion of  the  Department.  If  the  Department
26    concludes that the lender making the claim did not adequately
27    confirm  the  existence of the collateral, in accordance with
28    this subsection, the  warehouse  claim  shall  be  denied  in
29    accordance with the following provisions:
30        (a)  Valid  claims  filed by warehouse claimants shall be
31    paid 100% of the amount determined by the Department  out  of
32    the  net  proceeds  of the liquidation of grain assets as set
33    forth in this subsection (a).  To the extent the net proceeds
34    are insufficient, warehouse claimants shall be paid their pro
 
                            -77-     LRB093 07237 RCE 07394 b
 1    rata share of the net proceeds of the  liquidation  of  grain
 2    assets  and,  subject  to  subsection (j) of this Section, an
 3    additional amount per claimant not to exceed the  balance  of
 4    their respective claims out of the Fund.
 5        (b)  Subject  to  subsection  (j) of this Section, if the
 6    net proceeds as set forth in subsection (a) of  this  Section
 7    are  insufficient  to  pay  in full all valid claims filed by
 8    warehouse claimants as payment becomes due, the balance shall
 9    be paid out of the Fund in accordance with subsection (b)  of
10    Section 25-20.
11        (b) (c)  Valid claims filed by producers who:
12             (1)  have  delivered grain within 21 days before the
13        date of  failure,  or  the  date  of  suspension  if  the
14        suspension  results  in  a  failure, for which pricing of
15        that grain has been completed before date of failure; or
16             (2)  gave written notice to the Department within 21
17        days of the date of delivery of grain, if the pricing  of
18        that  grain  has been completed, that payment in full for
19        that grain has not been made;
20    shall be paid, subject to subsection (i) (j) of this Section,
21    100% of the amount of  the  valid  claim  determined  by  the
22    Department.  Valid claims that are included in subsection (b)
23    (c) of this Section shall receive no payment under subsection
24    (c)  (d)  of  this  Section,  and any claimant having a valid
25    claim  under  this  subsection  (b)  (c)  determined  by  the
26    Department to be in excess of the  limits,  if  any,  imposed
27    under  subsection  (i) (j) of this Section shall be paid only
28    sums in excess of those limits to the extent additional money
29    is available under subsection (d)(2) of Section 25-20.
30        (c) (d)  Valid claims that are not included in subsection
31    (b) (c) of this Section that are filed by producers where the
32    later date of completion of who  completed  delivery  or  and
33    pricing  of  the  grain  in  reference  to  the  valid claim,
34    whichever is later,  within  160  days  before  the  date  of
 
                            -78-     LRB093 07237 RCE 07394 b
 1    failure shall be limited in payment from the Fund to paid 85%
 2    of the amount of the valid claim determined by the Department
 3    or  $300,000  $100,000,  whichever  is less, per claimant. In
 4    computing the 365-day period, the phrase "the  later  of  the
 5    date"  means  the  date  closest  to the date of failure.  In
 6    addition, for claims filed by producers for grain sold  on  a
 7    price  later  contract,  however,  the  later  of the date of
 8    execution of the contract or the date of delivery of grain in
 9    reference to the grain covered by the  price  later  contract
10    must not be more than 365 270 days before the date of failure
11    in  order  for  the  claimant to receive any compensation. In
12    computing the 365-day period, the phrase "the  later  of  the
13    date" means the date closest to the date of failure.
14        (d) (e)  Valid  claims  filed by producers for grain sold
15    on a price later contract, for which the final price has  not
16    been  established,  shall be limited in payment from the Fund
17    to paid 85% of the amount of the valid claims  determined  by
18    the  Department  or $300,000 $100,000, whichever is less, per
19    claimant, if the later  of  the  date  of  execution  of  the
20    contract or the date of delivery of grain in reference to the
21    grain  covered  by  the  price later contract occurred not no
22    more than 270 days before the date of failure.  In  computing
23    the  365-day period, the phrase "the later of the date" means
24    the date closest to the date of failure.
25        The execution of subsequent price later contracts by  the
26    producer  and  the licensee for grain previously covered by a
27    price later contract shall not extend the coverage of a claim
28    beyond the original 365 270 days.
29        (e) (f)  The maximum payment from the Fund  to  producers
30    under  subsections  (c)  (d)  and  (d)  (e)  of this Section,
31    combined, shall be $300,000 $100,000 per claimant.
32        (f) (g)  The  following  claims  shall  be   barred   and
33    disallowed in their entirety and shall not be entitled to any
34    recovery from the Fund or the Trust Account:
 
                            -79-     LRB093 07237 RCE 07394 b
 1             (1)  Claims filed by producers who completed pricing
 2        of the grain in reference to their claim in excess of 160
 3        days before the date of failure.
 4             (2)  Claims  filed  by producers for grain sold on a
 5        price  later  contract  if  the  later  of  the  date  of
 6        execution of the contract or  the  date  of  delivery  of
 7        grain  in  reference  to  the  grain covered by the price
 8        later contract occurred more than 365 270 days before the
 9        date of failure.  The phrase "the  later  of"  means  the
10        date closest to the date of failure.
11             (3)  Claims  filed  by  any  claimant that are based
12        upon or acquired by fraudulent or  illegal  acts  of  the
13        claimant.
14        (g) (h)  To  the  extent moneys are available, additional
15    pro rata payments may be made to claimants  under  subsection
16    (d) of Section 25-20.
17        (h) (i)  For  purposes  of this Section, a claim filed in
18    connection with warehouse receipts that are possessed under a
19    collateral pledge of a producer, or that  are  subject  to  a
20    perfected  security  interest,  or  that  were  acquired by a
21    secured party  or  lien  holder  under  an  obligation  of  a
22    producer, shall be deemed to be a claim filed by the producer
23    and  not  a  claim  filed  by  the  secured party or the lien
24    holder, regardless of whether  the  producer  is  in  default
25    under  that  collateral  pledge, security agreement, or other
26    obligation.
27        (i) (j)  With respect to  any  failure  occurring  on  or
28    after  July  1, 1998, the maximum payment out of the Fund for
29    claimants under subsection  (a)  or,  (b),  or  (c)  of  this
30    Section  shall  be  $1,000,000  per  claimant and the maximum
31    payment out of the Fund for claimants under subsections  (b),
32    (c),  and  (d),  and  (e) of this Section, combined, shall be
33    $1,000,000 per claimant.
34        (j)  The amounts to be paid to warehouse valid  claimants
 
                            -80-     LRB093 07237 RCE 07394 b
 1    and   grain   dealer  valid  claimants  shall  be  calculated
 2    according to the following:
 3             (1)  Valid claimants who have warehouse  claims,  or
 4        who  have  grain  dealer claims for grain sold, delivered
 5        but unpriced as  of  the  date  of  failure,  shall  have
 6        "unpriced  obligations",  and to determine the per bushel
 7        value of these valid claims the Department shall  use  an
 8        average  of  the  cash  bid prices on the date of failure
 9        from grain dealers located within the market area of  the
10        failed  licensee,  and  the cash bid price offered by the
11        failed  licensee   on   the   date   of   failure,   less
12        transportation,  handling costs, and discounts applicable
13        as of that date.
14             (2)  Valid claimants who have  grain  dealer  claims
15        for  grain  sold, delivered, and priced as of the date of
16        failure shall have "priced obligations",  and  the  price
17        per bushel to be used in calculating the compensation due
18        these valid claimants shall be that which has been agreed
19        upon  by  the  failed  licensee  and  the  claimant, less
20        applicable discounts. For purposes of this  item  (2),  a
21        person  has  "priced"  his  or her grain if he or she has
22        done those things necessary under the agreement  to  set,
23        choose,  or  select  a price for any portion of the grain
24        under the agreement, without regard to whether he or  she
25        has  received  a check in payment for the grain, or could
26        have received a check in payment for the grain, prior  to
27        the failure.
28        (k)  Arrangements   whereby  a  producer  agrees  with  a
29    licensee to defer receipt of payment of amounts due from  the
30    sale  of  grain  are  covered  by this Code and are not to be
31    considered loans by the producer  to  the  licensee,  despite
32    payments  to the producer as an inducement for the leaving of
33    moneys with the licensee, unless the  licensee  has  executed
34    and  delivered  to  the  producer  a promissory note covering
 
                            -81-     LRB093 07237 RCE 07394 b
 1    those amounts.
 2        (l)  Prepayment claimants shall receive payment for their
 3    valid claims in accordance with Section  25-20(a).  Under  no
 4    circumstances  shall  moneys from the Fund be used to pay any
 5    portion of a prepayment claim.
 6    (Source: P.A. 91-213, eff. 7-20-99.)

 7        (240 ILCS 40/25-20)
 8        Sec. 25-20.  Priorities and repayments.
 9        (a)  All valid claims shall be paid first from the  Trust
10    Account,  as  provided in Section 25-10, with the moneys from
11    the Trust Account being distributed on a pro  rata  basis  to
12    all   claimants   first   from  the  proceeds  realized  from
13    liquidation of and collection upon the grain assets  relating
14    to  the  failed  licensee, as to warehouse claimants, and the
15    equity assets as to a secured party or lien  holder  who  has
16    consented  to  the Department liquidating and collecting upon
17    the equity asset as set forth in subsection  (f)  of  Section
18    20-15,  and  the  remaining  equity  assets,  collateral, and
19    guarantees relating to  the  failed  licensee,  as  to  grain
20    dealer claimants.
21        (b)  If  the  proceeds  realized  from liquidation of and
22    collection upon the grain assets, equity assets,  collateral,
23    and   guarantees   relating   to   the  failed  licensee  are
24    insufficient to pay all valid grain  claims  as  provided  in
25    Section  25-10  and subsection (a) of this Section as payment
26    on those claims becomes due, the Director shall request  from
27    the Board sufficient funds to be transferred from the Fund to
28    the  Trust Account to pay the balance owed to grain claimants
29    as determined under Section 25-10.  If a request is  made  by
30    the  Director  for  a  transfer of funds to the Trust Account
31    from the Fund, the Board shall act on that request within  25
32    days  after  the  date  of  that  request.   Once  moneys are
33    transferred from the Fund to the Trust Account, the  Director
 
                            -82-     LRB093 07237 RCE 07394 b
 1    shall  pay  the balance owed to grain claimants in accordance
 2    with Section 25-10.
 3        (c)  Net proceeds from liquidation of grain assets as set
 4    forth in subsection (a) of  Section  25-10  received  by  the
 5    Department, to the extent not already paid to grain warehouse
 6    claimants,  shall  be  prorated  among the fund and all grain
 7    warehouse claimants who have not had their valid claims  paid
 8    in full.
 9             (1)  The  pro rata distribution to the Fund shall be
10        based upon the total amount of valid claims of all  grain
11        warehouse  claimants who have had their valid claims paid
12        in  full.   The  pro  rata  distribution  to  each  grain
13        warehouse claimant who has  not  had  his  or  her  valid
14        claims  paid in full shall be based upon the total amount
15        of that grain claimant's original valid claims.
16             (2)  If the net proceeds  from  the  liquidation  of
17        grain  assets  as  set forth in subsection (a) of Section
18        25-10 exceed all amounts  needed  to  satisfy  all  valid
19        claims  filed  by  grain warehouse claimants, the balance
20        remaining shall be paid into the Trust Account or as  set
21        forth in subsection (h).
22        (d)  Subject to subsections (c) and (h):
23             (1)  The  proceeds  realized from liquidation of and
24        collection  upon  the  grain   assets,   equity   assets,
25        collateral,   and   guarantees  relating  to  the  failed
26        licensee or any  other  assets  relating  to  the  failed
27        licensee  that  are  received  by  the Department, to the
28        extent not already paid to claimants, shall be first used
29        to repay the Fund for moneys  transferred  to  the  Trust
30        Account.
31             (2)  After the Fund is repaid in full for the moneys
32        transferred  from  it  to  pay  the valid grain claims in
33        reference to a failed licensee,  any  remaining  proceeds
34        realized  from  liquidation  of  and  collection upon the
 
                            -83-     LRB093 07237 RCE 07394 b
 1        grain assets, equity assets, collateral,  and  guarantees
 2        relating  to  the  failed licensee thereafter received by
 3        the Department shall be prorated to the claimants holding
 4        valid grain claims who have  not  received  100%  of  the
 5        amount  of their valid grain claims based upon the unpaid
 6        amount of their valid grain claims.
 7        (e)  After all grain claimants have received 100% of  the
 8    amount  of  their  valid  claims,  to  the  extent moneys are
 9    available interest at the rate  of  6%  per  annum  shall  be
10    assessed  and paid to the Fund on all moneys transferred from
11    the Fund to the Trust Account.
12        (f)  After the Fund is paid the interest as  provided  in
13    subsection  (e) of this Section, then those claims barred and
14    disallowed under paragraphs (1) and (2) of subsection (f) (g)
15    of Section 25-10 shall be paid on a pro rata  basis  only  to
16    the extent that moneys are available.
17        (g)  Once  all  grain claims become valid claims and have
18    been paid in full and all interest as provided in  subsection
19    (e)  of this Section is paid in full, and all claims are paid
20    in full under subsection (f),  any  remaining  grain  assets,
21    equity  assets,  collateral, and guarantees, and the proceeds
22    realized from liquidation of and collection  upon  the  grain
23    assets, equity assets, collateral, and guarantees relating to
24    the  failed licensee, shall be paid to the Regulatory Fund as
25    reimbursement for expenses  incurred  by  the  Department  in
26    performance  of  its  duties under Article 20 of this Code in
27    reference to the failed licensee, and, to the extent not paid
28    to the Regulatory Fund,  shall  be  returned  to  the  failed
29    licensee or its assignee, or as otherwise directed by a court
30    of competent jurisdiction.
31        (h)  If  amounts  in the Fund are insufficient to pay all
32    valid grain claims, the General Assembly shall appropriate to
33    the Corporation amounts sufficient to satisfy the valid grain
34    claims.  If for any reason the General Assembly fails to make
 
                            -84-     LRB093 07237 RCE 07394 b
 1    an appropriation to satisfy outstanding valid  grain  claims,
 2    this   Code   constitutes   an   irrevocable  and  continuing
 3    appropriation of all amounts necessary for that  purpose  and
 4    the irrevocable and continuing authority for and direction to
 5    the  State Comptroller and to the State Treasurer to make the
 6    necessary transfers and disbursements from the  revenues  and
 7    funds  of the State for that purpose.  Subject to payments to
 8    warehouse claimants as set forth in subsection (c) of Section
 9    25-20, the State shall be reimbursed as soon as funds  become
10    available  for  any amounts paid under subsection (g) of this
11    Section upon replenishment of the Fund from assessments under
12    subsection (d) of Section  5-30  and  collection  upon  grain
13    assets, equity assets, collateral, and guarantees relating to
14    the failed licensee.
15        (i)  The  Department shall have those rights of equitable
16    subrogation which may result from a claimant  receiving  from
17    the  Fund  payment  in  full of the obligations of the failed
18    licensee to the claimant.
19    (Source: P.A. 91-213, eff. 7-20-99.)

20        (240 ILCS 40/30-5)
21        Sec. 30-5.  Illinois Grain Insurance Corporation.
22        (a)  The Corporation is  a  political  subdivision,  body
23    politic,  and public corporation. The governing powers of the
24    Corporation are vested in the Board of Directors composed  of
25    the  Director,  who  shall personally serve as president; the
26    Attorney General or his or her designee, who shall  serve  as
27    secretary;  the  State  Treasurer or his or her designee, who
28    shall serve as treasurer; the Director of the  Department  of
29    Insurance  or  his  or  her  designee;  and  the chief fiscal
30    officer  of  the  Department.  Three  members  of  the  Board
31    constitute a quorum at any meeting  of  the  Board,  and  the
32    affirmative  vote  of  3  members is necessary for any action
33    taken by the Board at a meeting, except that a lesser  number
 
                            -85-     LRB093 07237 RCE 07394 b
 1    may  adjourn  a  meeting from time to time.  A vacancy in the
 2    membership of the Board does not impair the right of a quorum
 3    to exercise all the rights and perform all the duties of  the
 4    Board and Corporation.
 5        (b)  The  Corporation  has the following powers, together
 6    with all powers incidental or necessary to the  discharge  of
 7    those powers in corporate form:
 8             (1)  To  have  perpetual succession by its corporate
 9        name as a corporate body.
10             (2)  To  adopt,  alter,  and  repeal   bylaws,   not
11        inconsistent  with  the  provisions of this Code, for the
12        regulation and conduct of its affairs and business.
13             (3)  To adopt and make use of a corporate  seal  and
14        to alter the seal at pleasure.
15             (4)  To  avail  itself  of  the  use of information,
16        services, facilities,  and  employees  of  the  State  of
17        Illinois in carrying out the provisions of this Code.
18             (5)  To  receive  funds,  printer registration fees,
19        and penalties assessed by the Department under this Code.
20             (6)  To administer the Fund by  investing  funds  of
21        the  Corporation  that  the  Board  may determine are not
22        presently needed for its corporate purposes.
23             (7)  To receive funds from the  Trust   Account  for
24        deposit into the  Fund.
25             (8)  Upon  the  request  of  the  Director,  to make
26        payment from the Fund to the Trust Account  when  payment
27        is  necessary  to compensate claimants in accordance with
28        the provisions of Section 25-20 or for payment of refunds
29        to licensees in accordance with the  provisions  of  this
30        Code.
31             (9)  To  authorize,  receive,  and disburse funds by
32        electronic means.
33             (10)  To make any inquiry and  investigation  deemed
34        appropriate  with  regard to the failure of any licensee,
 
                            -86-     LRB093 07237 RCE 07394 b
 1        including but not limited to analyzing the causes of  and
 2        reasons  for  the  failure;  determining the adequacy and
 3        accuracy of Department examinations and other  regulatory
 4        measures   with   regard  to  the  failed  licensee;  and
 5        analyzing whether the handling  of  the  liquidation  and
 6        payment  process  by  the Department was done in a manner
 7        that  served  the  interests  of  those   persons   whose
 8        interests this Code was designed to protect.
 9             (11) (9)  To have those powers that are necessary or
10        appropriate  for  the exercise of the powers specifically
11        conferred upon the Corporation and all incidental  powers
12        that are customary in corporations.
13        (c)  A  committee of advisors shall be created to provide
14    technical assistance and advice and make  recommendations  to
15    the  Board.  The advisory committee shall assist the board in
16    understanding pertinent developments in grain production  and
17    marketing  and  the  grain  industry.  The advisory committee
18    shall be composed of one grain  producer  designated  by  the
19    Illinois  Farm  Bureau;  one grain producer designated by the
20    Illinois Farmers Union; one grain producer designated by  the
21    Illinois   Corn   Growers  Association;  one  grain  producer
22    designated by  the  Illinois  Soybean  Association;  and  one
23    representative of the grain industry, designated by the Grain
24    and  Feed  Association  of Illinois.  Members of the advisory
25    committee shall serve terms of 2 years from the date of their
26    designation.  Members of the advisory  committee  shall  have
27    the right to attend all meetings of the Board and participate
28    in Board discussions, but shall not have a vote.
29    (Source: P.A. 91-213, eff. 7-20-99.)

30        (240 ILCS 40/30-10)
31        Sec. 30-10.  Participants in the Fund.
32        (a)  A  licensee  under  this  Code  is  subject  to this
33    Article and shall collect and pay assessments into  the  Fund
 
                            -87-     LRB093 07237 RCE 07394 b
 1    as provided in Section 5-30.
 2        (b)  Except   as  provided  in  subsection  (c)  of  this
 3    Section, a person engaged in the business of a  grain  dealer
 4    or  warehouseman  but  not licensed under this Code shall not
 5    participate in or benefit from the  Fund  and  its  claimants
 6    shall not receive proceeds from the Fund.
 7        (c)  Participation of federal warehousemen.
 8             (1)  A  federal  warehouseman may participate in the
 9        Fund.  If a federal warehouseman chooses  to  participate
10        in  the Fund, it shall to the extent permitted by federal
11        law:
12                  (A)  pay assessments into the Fund;
13                  (B)  be deemed a licensee  and  a  warehouseman
14             under this Code;
15                  (C)  be subject to this Code; and
16                  (D)  execute  a  cooperative  agreement between
17             itself and the Department.
18             (2)  The cooperative agreement shall, at a  minimum,
19        provide  each of the following to the extent permitted by
20        federal law:
21                  (A)  Authorization for the Department to obtain
22             information   about   the    federal    warehouseman
23             including,  but  not  limited to, bushel capacity of
24             storage space, financial stability, and examinations
25             performed  by  employees  of   the   United   States
26             Department of Agriculture.
27                  (B)  That   the  federal  warehouseman  submits
28             itself to the jurisdiction  of  the  Department  and
29             that  it  agrees  to be subject to and bound by this
30             Code and deemed a licensee under this Code.
31                  (C)  That in the event  of  a  failure  of  the
32             federal  warehouseman,  the  Department  shall  have
33             authority  to seize, liquidate, and collect upon all
34             grain assets, collateral, and guarantees relating to
 
                            -88-     LRB093 07237 RCE 07394 b
 1             the federal warehouseman as in the case of any other
 2             licensee.
 3                  (D)  Such other requirements as established  by
 4             rule.
 5             (3)  A federal warehouseman that participates in the
 6        Fund  shall  at a minimum meet the licensing requirements
 7        of this Code and shall comply with all requirements of  a
 8        licensee and a warehouseman under this Code to the extent
 9        permitted by federal law.
10        (d)  A federal warehouseman that participates in the Fund
11    or  a  warehouseman  that  desires to or has become a federal
12    warehouseman cannot withdraw from participation in  the  Fund
13    for  the  benefit of existing depositors until the occurrence
14    of all of the following:
15             (1)  Payment in full by the federal warehouseman or
16        withdrawing  warehouseman  of   all   assessments   under
17        subsection (a) of Section 5-30.
18             (2)  Payment in full by the federal warehouseman or
19        withdrawing  warehouseman  of  all assessments instituted
20        under subsection (d) of  Section  5-30  on  or  after  an
21        assessment  determination  date that occurs before if the
22        Fund is under $3,000,000 at any time  after  the  federal
23        warehouseman  or  withdrawing  warehouseman  notifies the
24        Department that it desires to withdraw from participation
25        in the Fund and before the issuance by the Department  of
26        a certificate of withdrawal from the Fund.
27             (3)  The  expiration  of 30 days following the later
28        of:
29                  (A)  the  date  the  federal  warehouseman   or
30             withdrawing  warehouseman  has  ceased providing its
31             depositors with coverage under the Fund;
32                  (B)  the  date  the  federal  warehouseman   or
33             withdrawing  warehouseman  has posted at each of its
34             locations  a  notice  stating  when  it  will  cease
 
                            -89-     LRB093 07237 RCE 07394 b
 1             providing its depositors  with  coverage  under  the
 2             Fund;
 3                  (C)  notification of all potential claimants by
 4             the federal warehouseman or withdrawing warehouseman
 5             of  the  date  on  which it will cease providing its
 6             depositors with coverage under the Fund; and
 7                  (D)  Completion of  an  audit  and  examination
 8             satisfactory  to  the  Department as provided for in
 9             this  Code  and  by  rule,  which  is  to   be   the
10             Department's final examination.
11             (4)  Obtaining   releases   of  liability  from  all
12        existing  depositors  or  posting  collateral  with   the
13        Department  for  270 days after withdrawing from the Fund
14        in  an  amount  equal  to  the  liability   to   existing
15        depositors  who  have  not  executed  releases before the
16        completion of the Department's final examination.
17             (5)  Compliance with all  notification  requirements
18        as provided for in this Code and by rule.
19             (6)  Issuance  by the Department of a certificate of
20        withdrawal from the Fund when the federal warehouseman or
21        withdrawing warehouseman has  met  all  requirements  for
22        withdrawal from participation in the Fund.
23        (e)  Before a federal warehouseman or a warehouseman that
24    desires  to or has become a federal warehouseman may withdraw
25    from participation in the Fund, it must pay for an audit  and
26    examination  and must provide to the Department all names and
27    addresses  of  potential  claimants  for  the   purposes   of
28    notification of withdrawal of participation in the Fund.
29    (Source: P.A. 89-287, eff. 1-1-96.)

30        (240 ILCS 40/Art. 35 heading new)
31                     ARTICLE 35. REGULATORY FUND

32        (240 ILCS 40/35-5 new)
 
                            -90-     LRB093 07237 RCE 07394 b
 1        Sec. 35-5.  Regulatory Fund.
 2        (a)  The  Regulatory  Fund  is created as a trust fund in
 3    the  State  Treasury.  The  Regulatory  Fund  shall   receive
 4    license, certificate, and extension fees under Sections 5-10,
 5    5-15,  and  5-20  and  funds  under subsection (g) of Section
 6    25-20 and shall pay expenses as set forth in this Article 35.
 7        (b)  Any funds received by the  Director  under  Sections
 8    5-10,  5-15,  and 5-20 and funds disbursed for deposit to the
 9    Regulatory Fund under subsection (g) of Section  25-20  shall
10    be  deposited  with the Treasurer as ex officio custodian and
11    held separate and apart from any public money of this  State,
12    with  interest  accruing  on  moneys  in  the Regulatory Fund
13    deposited into the Regulatory  Fund.  Disbursement  from  the
14    Fund for expenses as set forth in this Article 35 shall be by
15    voucher ordered by the Director, accompanied by documentation
16    satisfactory  to the Treasurer and the Comptroller supporting
17    the payment arrant drawn by the Comptroller and countersigned
18    by the Treasurer. Moneys in the Regulatory Fund shall not  be
19    subject to appropriation by the General Assembly but shall be
20    subject  to  audit by the Auditor General. Interest earned on
21    moneys deposited into the Regulatory Fund shall be  deposited
22    into the Regulatory Fund.
23        (c)  Fees   deposited  into  the  Regulatory  Fund  under
24    Sections 5-10, 5-15, and 5-20 shall be expended only for  the
25    following program expenses of the Department;
26             (1)  Implementation  and  monitoring  of programs of
27        the Department  solely  under  this  Code,  including  an
28        electronic warehouse receipt program.
29             (2)  Employment  or  engagement  of certified public
30        accountants to assist  in  oversight  and  regulation  of
31        licensees.
32             (3)  Training  and  education of examiners and other
33        Department employees in reference to Department  programs
34        established  to  implement the Department's duties solely
 
                            -91-     LRB093 07237 RCE 07394 b
 1        under the Code.
 2        (d)  Any  expenses  incurred   by   the   Department   in
 3    performance  of its duties under Article 20 of the Code shall
 4    be reimbursed to the Department out of the net  assets  of  a
 5    liquidation  to  the extent available under subsection (q) of
 6    Section 25-20 and shall be deposited into the Regulatory Fund
 7    and shall be expended solely for program expenses  under  the
 8    Code.

 9        Section  99.  Effective date.  This Act takes effect upon
10    becoming law.