HB2284 96TH GENERAL ASSEMBLY

LRB096 11075 RCE 21400 b

96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
HB2284

Introduced 2/18/2009, by Rep. LaShawn K. Ford

SYNOPSIS AS INTRODUCED:

240 ILCS 10/1	from Ch. 111 2/3, par. 119
240 ILCS 10/1.1	from Ch. 111 2/3, par. 119.1
240 ILCS 10/2	from Ch. 111 2/3, par. 120
240 ILCS 10/4	from Ch. 111 2/3, par. 122
240 ILCS 10/5	from Ch. 111 2/3, par. 123
240 ILCS 10/6	from Ch. 111 2/3, par. 124
240 ILCS 10/7	from Ch. 111 2/3, par. 125
240 ILCS 10/8	from Ch. 111 2/3, par. 126
240 ILCS 10/10	from Ch. 111 2/3, par. 128
240 ILCS 10/12	from Ch. 111 2/3, par. 130
240 ILCS 10/14	from Ch. 111 2/3, par. 132
240 ILCS 10/15	from Ch. 111 2/3, par. 133
240 ILCS 10/16	from Ch. 111 2/3, par. 134
240 ILCS 10/17	from Ch. 111 2/3, par. 135
240 ILCS 10/19	from Ch. 111 2/3, par. 137
240 ILCS 10/20	from Ch. 111 2/3, par. 138
240 ILCS 10/20.1 new
240 ILCS 10/20.2 new

Amends the Personal Property Storage Act. Provides for administration of the Act by the Illinois Commerce Commission (instead of the Department of Agriculture). Makes changes concerning applications by limited liability companies, bond or insurance amounts, violation of the Commission's rules, fees set by rule, investigators, civil penalties, license revocation, subpoenas, and oaths. Effective January 1, 2010.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning warehouses.

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

Section 5. The Personal Property Storage Act is amended by changing Sections 1, 1.1, 2, 4, 5, 6, 7, 8, 10, 12, 14, 15, 16, 17, 19, and 20 and by adding Sections 20.1 and 20.2 as follows:

(240 ILCS 10/1) (from Ch. 111 2/3, par. 119)

Sec. 1. No person shall operate a warehouse or engage in the business of storing personal property for a compensation, or hold himself out as being in the storage or warehouse business, or as offering storage or warehouse facilities, or advertise for, solicit or accept personal property for storage, without a license issued by the Commission Illinois Department of Agriculture, except that licenses issued under this Act by the Illinois Commerce Commission prior to May 4, 1967 shall remain valid for all purposes unless such license is terminated, surrendered or revoked as provided in this Act, and except further that licenses issued by the Illinois Department of Agriculture under this Act prior to January 1, 2010 shall remain valid for all purposes unless such license is terminated, surrendered, or revoked as provided in this Act. Recognized fair associations shall be licensed as set forth under the special provisions of Section 1.1. No person shall receive, hold, store or deliver any alcoholic liquors without a certificate of registration from the Department of Revenue in accordance with Article VII A of "An Act relating to alcoholic liquors", approved January 31, 1934, as heretofore and hereafter amended. The certificate of registration required by the Department of Revenue is in addition to the license required under this Act. This Act does not apply to warehouses licensed under "An Act to regulate refrigerated warehouses in the handling and storage of certain articles of food, and to repeal an Act therein named", approved May 25, 1955, as now or hereafter amended; public warehouses storing grain; garages customarily housing automobiles for in and out storage; storage of personal property in safety deposit vaults or boxes, lock boxes, and check rooms where personal effects, parcels and the like are received for temporary custody; and to the storage of personal property while it is being held in storage for scientific care for repairs or alterations, or is in the process of repair or alteration, or which is incidental to the business of manufacturing, selling, repairing, altering, cleaning, or glazing of furs or of any other garment or article of which fur forms any part thereof.

(Source: P.A. 81-158.)

(240 ILCS 10/1.1) (from Ch. 111 2/3, par. 119.1)

Sec. 1.1. Governmental fairs as set forth under the Agricultural Fairs Act and the Illinois State Fair which store personal property for compensation or hold themselves out as offering storage or storage facilities for personal property shall be licensed under a limited special governmental fairs license. This special license shall be issued for personal property other than goods, wares, household goods, furniture and merchandise and shall be of the type of personal property as set forth by regulation of the Commission Department. Personal property stored by these licensees shall be primarily boats, farm machinery and other similar tangible personal property as authorized by regulation of the Commission Department. Each licensee shall have a signed contract with each depositor on forms as prescribed by the Commission Department and shall also comply with Section 10. If such licensee does not have a bond or legal liability policy as set forth in Section 6, then the receipt shall have stamped across its face in bold type "Not Insured." If a licensee under this Section complies with the requirements of Section 6, the licensee shall provide to the Commission Department evidence of such compliance as required in Section 6 of this Act. A governmental fairs licensee shall comply with all other requirements of this Act.

(Source: P.A. 81-158.)

(240 ILCS 10/2) (from Ch. 111 2/3, par. 120)

Sec. 2. Definitions. When used in this Act:

The term "Commission" means the Illinois Commerce Commission.

The term "warehouse" means any room, house, structure, building, place, yard or protected enclosure where personal property belonging to another is stored for a compensation.

The term "personal property" means all goods, wares, household goods, furniture, merchandise, or any other tangible personal property, of whatever kind, except that "grain" as defined in "The Public Grain Warehouse and Warehouse Receipts Act" is not included.

The term "Department" means the Illinois Department of Agriculture.

The term "operator", "warehouseman", or "personal property warehouseman" means any person, firm, partnership, association, or corporation owning, controlling, operating, managing or leasing any room, house, structure, building, place, yard or protected enclosure in or on which personal property is stored for a compensation within this State.

The term "person" means any individual, firm, partnership, association or corporation.

The term "depositor" means any person, who, for himself or another, delivers or causes to be delivered for storage any personal property in and to a warehouse.

The term "for a compensation" means direct or indirect charge for storage.

The term "lot" means the unit or units of property for which a separate account is kept by the warehouseman.

The term "storage" means the safe keeping of personal property in a warehouse.

The term "engaged in the business of storing personal property" means any person who holds himself out, by any means whatever, as accepting, or willing to accept, personal property for storage.

The term "receipt" means a warehouse receipt issued in conformity with the "Uniform Commercial Code", as heretofore and hereafter amended.

The term "warehouse representative" or "warehouse broker" means any person who, independently and not as a salaried agent of a duly licensed warehouseman, for a consideration, solicits, sells or otherwise attempts to procure deposits of personal property in personal property warehouses.

(Source: P.A. 83-1065.)

(240 ILCS 10/4) (from Ch. 111 2/3, par. 122)

Sec. 4. Applications. No person shall engage in business as a personal property warehouseman in the State of Illinois without a license therefor issued by the Commission Department. The application for a license to engage in business as a personal property warehouseman shall be filed with the Commission Department. Such application shall set forth the name of the applicant, the principal officers if the applicant is a corporation, the managers (if manager-managed) or the members (if member-managed), if the applicant is a limited liability company, or the active members of a partnership if the applicant is a partnership, the location of the principal office or place of business of the applicant and the location or locations in this State at which the applicant proposes to engage in business as a personal property warehouseman, and such additional information as the Commission Department, by regulation, may require. The application shall also set forth the location, character, and description of the building or place of the proposed warehouse, the kind of property, goods, ware, and merchandise expected to be stored therein, and the approximate number of square feet of floor space, or, if applicable, the total cubic capacity devoted to storage purposes. The Commission Department shall require information showing that the property to be used is reasonably suitable for warehouse purposes, that the applicant is qualified to conduct the business of storing personal property under this Act, and the applicant proposes to conduct the business in accordance with the laws of this State and the rules and regulations of the Commission Department.

(Source: P.A. 83-1065.)

(240 ILCS 10/5) (from Ch. 111 2/3, par. 123)

Sec. 5. Inspections. Upon the filing of an application, the Commission Department shall cause an inspection to be made of each the warehouse described in the application. Additional inspections of any warehouse may be made from time to time as the Commission Department deems necessary, in order to effectuate the purposes of this Act.

Such inspection or inspections may include not only the building or premises used for storage purposes but the arrangement of the goods stored, nature of goods stored, safety of the building, accessibility to goods stored, precaution against fire hazards; whether fire extinguishers, fire apparatus, or hose are in good condition; whether all lots for which warehouse receipts have been issued are in storage; and any other things necessary to determine whether the warehouse is being operated in compliance with this Act. Investigators in the Commission's Transportation Bureau The inspector shall have the right to enter the property of any warehouseman at any reasonable time, for the purpose of making an inspection or performing any duties in connection with this Act.

If the inspection of any warehouse discloses a hazardous condition or conditions or any other violation of this Act or the Commission's rules, the operator shall, upon written notice from the Commission Department, take proper and immediate steps to correct the condition or conditions. Failure to comply with the notice shall be grounds for rejecting an application or for revoking a license.

(Source: P.A. 83-1065.)

(240 ILCS 10/6) (from Ch. 111 2/3, par. 124)

Sec. 6. Bond or legal liability insurance policy. Prior to the issuance of a license, the personal property warehouseman shall file with the Commission Department a surety bond, or legal liability insurance policy on a form prescribed by the Commission Department, signed by the warehouseman as principal and by a responsible company authorized to execute surety bonds within the State of Illinois. The bond shall contain provisions for faithful performance by the applicant of his duties as a warehouseman in accordance with this Act, the rules and regulations thereof, and the "Uniform Commercial Code", as now or hereafter amended. Such bond shall also contain provisions for the payment of any loss or damage sustained by any depositor of property stored.

The amount of such bond or insurance policy shall be in the amount set by the Commission by rule. is determined upon the following basis:

For less than 20,000 net square feet of floor space or for less than 50,000 net cubic feet of volume devoted to the storage of personal property, $5,000;

For 20,000 and less than 50,000 net square feet of floor space or for 50,000 and less than 100,000 net cubic feet of volume devoted to the storage of personal property, $10,000;

For 50,000 and less than 100,000 net square feet of floor space or for 100,000 and less than 200,000 net cubic feet of volume devoted to the storage of personal property, $15,000;

For 100,000 and less than 200,000 net square feet of floor space or for 200,000 and less than 300,000 net cubic feet of volume devoted to the storage of personal property, $20,000;

For 200,000 and less than 300,000 net square feet of floor space or for 300,000 and less than 400,000 net cubic feet of volume devoted to the storage of personal property, $25,000; and

For 300,000 or more net square feet of floor space or for 400,000 or more net cubic feet of volume devoted to the storage of personal property, $25,000 plus an additional $5,000 for each additional 100,000 net square feet, or net cubic feet of volume, or fraction thereof.

Such bond or insurance policy is to be made payable to the People of the State of Illinois, for the use and benefit of all persons aggrieved by the failure of the operator to comply with this Act, and shall not be cancelled during the period for which any license is issued, except upon at least 90 days' notice, in writing, to the Commission Department.

If bond other than a surety bond is filed, it must be secured by real estate having a value of not less than double the amount of such bond over and above all exemptions and liens thereon. Such bond shall be recorded and be a lien on the real estate for the amount thereof, and the recording fees paid by the applicant or operator.

Any operator may, in lieu of a bond, file with the Commission Department a certified copy of a legal liability insurance policy or a certificate of deposit. The principal amount of the legal liability insurance policy and the certificate of deposit shall be the same as that required for a surety bond under this Act. Any certificate of deposit filed with the Commission Department, in lieu of a surety bond, shall be payable to the Bureau Chief Director of the Commission's Transportation Bureau Department as Trustee and the interest thereon shall be made payable to the purchaser thereof.

The legal liability insurance policy shall contain a loss payable endorsement making such policy payable to the People of the State of Illinois, with the Bureau Chief of the Commission's Transportation Bureau Director of the Department as Trustee. The legal liability insurance policy shall not be cancelled during the period for which any license is issued, except upon at least 90 days' notice in writing to the Commission Department. When in the discretion of the Commission Department, the legal liability insurance policy or the assets of a warehouseman appear to be insufficient, when compared to his storage obligations or to meet the bond requirements of the United States, or any agency or corporation controlled by the United States when they have a contract for storage with the warehouseman, or for any other reason it may appear necessary to the Commission Department, the Commission Department may require such additional bond or legal liability insurance policy as may be reasonable in the circumstances.

The Bureau Chief of the Commission's Transportation Bureau Director of Agriculture as trustee of the bond or policy shall have the authorities granted him in Section 205-410 of the Department of Agriculture Law (20 ILCS 205/205-410) and the rules and regulations adopted pursuant thereto.

Failure to keep such bond or insurance policy in effect is cause for the revocation of any license.

(Source: P.A. 91-239, eff. 1-1-00.)

(240 ILCS 10/7) (from Ch. 111 2/3, par. 125)

Sec. 7. Fees. Each applicant shall accompany its his application for a personal property warehouse license with and thereafter pay to the Commission Department an initial fee of $250 and an annual renewal fee of $150, plus an annual fee of $100 for each additional personal property warehouse operated by the applicant to keep and perpetuate the license, or such other amounts as the Commission may set by rule. The special governmental fairs annual license fee shall be $50, or such other amount as the Commission may by regulation prescribe.

(Source: P.A. 85-528.)

(240 ILCS 10/8) (from Ch. 111 2/3, par. 126)

Sec. 8. Issuance and period of license. Upon compliance with this Act by the applicant, the Commission Department shall issue a license or licenses to such applicant which is valid for one year from the date of its issuance unless said license is suspended or revoked after due process in accordance with this Act.

(Source: P.A. 83-1065.)

(240 ILCS 10/10) (from Ch. 111 2/3, par. 128)

Sec. 10. Warehouse Receipts. Every operator shall, upon the receipt of personal property for storage, issue and deliver to the depositor a negotiable or a non-negotiable warehouse receipt.

Negotiable warehouse receipt forms, complying in every respect with subsection (2) of Section 7-202 of the "Uniform Commercial Code", approved July 31, 1961, as amended, must be printed in a form prescribed by the Commission Department, and prenumbered by a bonded printer. Negotiable warehouse receipt forms must be kept under lock and key at the office of the warehouse operator. A register must be kept of each negotiable warehouse receipt issued. Endorsements shall be made on the negotiable warehouse receipt of any partial deliveries of goods covered by such receipt. Delivery of goods covered by a negotiable warehouse receipt without surrender of such negotiable warehouse receipt shall be prohibited.

Non-negotiable warehouse receipts shall conform with subsection (2) of Section 7-202 of the "Uniform Commercial Code", approved July 31, 1961, as amended.

The property of each depositor shall be specifically designated under a lot, product code, batch, or other control unit agreed upon by the warehouseman and depositor. Said designation shall also appear on the receipt for the purpose of identification, and a separate account and record shall be kept for each customer's property.

No operator shall issue any receipt unless the same shall state on the face thereof in conspicuous type whether or not such goods are insured for the benefit of the depositor against fire or any other casualty.

(Source: P.A. 83-1065.)

(240 ILCS 10/12) (from Ch. 111 2/3, par. 130)

Sec. 12. Advertisements.

It is unlawful for any person, firm, partnership, association, limited liability company, or corporation to hold himself, themselves, or itself out as a warehouseman or advertise for, or solicit business as a warehouseman without first complying with this Act; or advertising as being an insured warehouse unless the insurance is for the benefit of the depositor against fire or other casualties; or to use any stationery, cards, signs or other advertisements of a false, fraudulent, deceptive or misleading nature; or use the word storage, in any way, in connection with the business unless engaged in the storage business and licensed as a warehouse operator under this Act.

A personal property warehouseman has authority to use the services of warehouse representatives or warehouse brokers in Illinois provided the names and addresses of such warehouse representatives or warehouse brokers are listed on the license application of the personal property warehouseman.

No person shall set himself out to be a warehouse representative or a warehouse broker, or do business as such, without first being so listed by a duly licensed warehouseman. A warehouseman may, by giving written notice in duplicate to the Commission Department, amend his license application at any time to add or delete the name or names of warehouse representatives or warehouse brokers retained by him.

(Source: P.A. 77-1341.)

(240 ILCS 10/14) (from Ch. 111 2/3, par. 132)

Sec. 14. Authority of investigator's inspectors-Police power.

Investigators Inspectors of the Commission's Transportation Bureau Department have full power and authority in the performance of their official duties to enter into or upon any place, building or premises of any warehouse at any reasonable time for the purpose of inspecting such warehouse operating under this Act, and the books and records of the operator thereof, or for the purpose of obtaining any information pertaining to the manner in which such warehouse business is being conducted. Any such investigator inspector has the same powers as are now held by or hereafter conferred upon, any regular law enforcement officer to arrest, with or without formal warrant, any violator or violators of this Act.

(Source: Laws 1967, p. 451.)

(240 ILCS 10/15) (from Ch. 111 2/3, par. 133)

Sec. 15. Interference with or impersonation of investigator inspector.

No person shall in any way or manner obstruct, hinder or molest any warehouse investigator inspector in the performance of his duties as required by this Act. It is unlawful for any person to falsely represent that he is a warehouse investigator inspector or to falsely represent that he is authorized to inspect warehouses on behalf of the Commission Department, or to demand of any operator the examination or production of the records of such operator unless he is a duly authorized investigator inspector of the Commission's Transportation Bureau Department.

(Source: Laws 1967, p. 451.)

(240 ILCS 10/16) (from Ch. 111 2/3, par. 134)

Sec. 16. Rules and regulations.

The Commission Department has the authority to exercise general supervision and regulation over all warehouses included under this Act, and has authority to make all necessary rules and regulations, and adopt forms of application, bond, receipt, and such other forms as may be required to effectuate the purposes of this Act.

(Source: Laws 1967, p. 451.)

(240 ILCS 10/17) (from Ch. 111 2/3, par. 135)

Sec. 17. Violations, Administrative Action and Review. Violations of this Act shall be classified as follows:

(a) Category I Violations, which include:

(i) Technical violations causing no harm to persons or property.

(ii) Prior practices or conditions that have been voluntarily remedied.

Category I violations shall be handled by a warning notice issued by the Commission Department to the warehouseman stating that such practices shall not be allowed to recur. Receipt of such notice shall be acknowledged by the warehouseman.

(b) Category II Violations, which include:

(i) Practices or conditions that if continued could cause significant loss to depositors.

(ii) Practices or conditions that if continued could cause serious hazard to public health or safety.

(iii) Operating a personal property warehouse without a license.

The Commission Department may, upon its own motion and shall upon the verified complaint in writing of any person setting forth facts which if proved would constitute a Category II violation, investigate the actions of any person or persons operating a personal property warehouse. The Commission Department shall issue a formal notice to the warehouse operator that he is required to take proper and immediate steps to correct the practices or conditions, and that failure to do so could be cause for revocation of license and other legal penalties as provided in this Act. The warehouse operator shall, if he believes that the complaint is improper, unjust, or unfounded, request a hearing which shall be set up in conformance with established practice for Commission administrative hearings. If the warehouse operator fails to correct the alleged practices or conditions, or fails to request a hearing within a stipulated time, his license shall be revoked, and the Commission may impose civil penalties in the amount provided under the Illinois Commercial Transportation Law. The Commission Department may also seek appropriate judicial action. In the case of practices or conditions that constitute serious hazard to public health or safety, the Commission Department shall cooperate with the appropriate federal, state, and local agencies or authorities.

(c) Category III Violations, which include:

(i) Conversion of a depositor's goods to the warehouseman's own use.

(ii) Practices or conditions that have caused significant loss or damage to depositors.

The Commission Department may, upon its own motion and shall upon the verified complaint in writing of any person setting forth facts which if proved would constitute a Category III violation, investigate the actions of any person or persons operating a personal property warehouse. The Commission Department shall issue a formal notice to the warehouse operator that he is required to take proper and immediate steps to correct the practices or conditions, and that failure to do so will be cause for revocation of license and additional legal penalties as provided in this Act. The warehouse operator shall, if he believes that the alleged violation is unfounded, request a hearing which shall be set up in conformance with established practice for administrative hearings. If the warehouse operator fails to correct the alleged practices or conditions, or fails to request a hearing within a stipulated time, the operator's license shall be revoked, and the Commission may impose civil penalties in the amount provided under the Illinois Commercial Transportation Law. The Commission may also seek appropriate judicial action.

In connection with any investigation or hearing conducted by the Commission Department under this Act, the Commission Department, over the signature of the Bureau Chief of the Commission's Transportation Bureau or any Transportation Bureau Hearing Examiner Director, is authorized to issue subpoenas and to bring before the Commission Department any person or persons in this State and to take testimony either orally or by deposition or by exhibit. The Bureau Chief of the Commission's Transportation Bureau or any Transportation Bureau Hearing Examiner Director is authorized to issue subpoenas for any or all documents relating to complainant records. The Bureau Chief of the Commission's Transportation Bureau or any Transportation Bureau Hearing Examiner Director or his designee may administer oaths to witnesses at any hearing which the Commission Department is authorized by law to conduct.

The Illinois Administrative Procedure Act, as amended, and the rules and regulations adopted thereunder shall apply to and govern all administrative actions taken by the Commission Department, where applicable, unless otherwise prescribed by this Act. Judicial review of final administrative decisions may be had in accordance with the provisions of the Administrative Review Law, as now or hereafter amended.

(Source: P.A. 83-1065.)

(240 ILCS 10/19) (from Ch. 111 2/3, par. 137)

Sec. 19. Penalty. Any person who engages in business as a personal property warehouseman without securing a license or who does not have a valid license, or who commits one or more Category II or Category III violations of this Act, or who shall impede, obstruct, hinder or otherwise prevent or attempt to prevent the Commission Director or his duly authorized agent in the performance of its his duty in connection with this Act, or who refuses to permit inspection of his premises or records as provided in this Act shall be guilty of a Class B misdemeanor for the first violation, and be guilty of a Class A misdemeanor for each subsequent violation. In addition, the Commission may impose civil penalties in the amount provided under the Illinois Commercial Transportation Law. In case of a continuing violation or violations, each day that each violation occurs constitutes a separate and distinct offense.

It shall be the duty of each State's Attorney to whom any violation is reported to cause appropriate proceedings to be instituted and prosecuted in the circuit court without delay, provided that the Bureau Chief of the Commission's Transportation Bureau Director has previously given the warehouseman involved an administrative hearing as provided for in this Act.

The Commission Director may apply for and the circuit court may grant a temporary restraining order or preliminary or permanent injunction restraining any person from committing or continuing to commit a Category II or III violation.

(Source: P.A. 83-1065.)

(240 ILCS 10/20) (from Ch. 111 2/3, par. 138)

Sec. 20. Power to enforce.

The Commission Department has full power and authority to carry out this Act.

(Source: Laws 1967, p. 451.)

(240 ILCS 10/20.1 new)

Sec. 20.1. Grandfathered rules. Rules promulgated by the Illinois Department of Agriculture under this Act shall remain valid until amended or repealed by the Commission. All references in those rules to the "Department" shall, on and after the effective date of this amendatory Act of the 96th General Assembly, be deemed references to the "Commission". All references in those rules to the "Director" shall, on and after the effective date of this amendatory Act of the 96th General Assembly, be deemed references to the "Bureau Chief of the Commission's Transportation Bureau.

(240 ILCS 10/20.2 new)

Sec. 20.2. Applicability of Illinois Commercial Transportation Law. Except as provided elsewhere in this Act, Subchapter I, Articles II, III, V, VI, & VII, and Subchapter II of the Illinois Commercial Transportation Law apply to the Commission in the administration and enforcement of this Act.

Section 99. Effective date. This Act takes effect January 1, 2010.