State of Illinois
91st General Assembly
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91_SB1070eng

 
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 1        AN ACT to amend the Grain Code by changing Sections 1-10,
 2    1-15, 5-30, 10-10, 10-15, 10-25, 25-10, 25-20, and 30-5.

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

 5        Section  5.   The  Grain  Code  is  amended  by  changing
 6    Sections 1-10, 1-15, 5-30, 10-10, 10-15, 10-25, 25-10, 25-20,
 7    and 30-5 as follows:

 8        (240 ILCS 40/1-10)
 9        Sec. 1-10.  Definitions.  As used in this Act:
10        "Board"  means  the  governing body of the Illinois Grain
11    Insurance Corporation.
12        "Certificate" means a document, other than  the  license,
13    issued by the Department that certifies that a grain dealer's
14    license has been issued and is in effect.
15        "Claimant" means:
16        (a)  a person, including, without limitation, a lender:
17             (1)  who possesses warehouse receipts issued from an
18        Illinois  location  covering  grain  owned or stored by a
19        failed warehouseman; or
20             (2)  who has other written  evidence  of  a  storage
21        obligation  of  a  failed  warehouseman  issued  from  an
22        Illinois  location in favor of the holder, including, but
23        not limited to, scale  tickets,  settlement  sheets,  and
24        ledger cards; or
25             (3)  who  has loaned money to a warehouseman and was
26        to receive a warehouse receipt issued  from  an  Illinois
27        location  as  security  for  that  loan,  who surrendered
28        warehouse receipts as part of a grain sale at an Illinois
29        location, or who delivered grain out of storage with  the
30        warehouseman  as  part  of  a  grain  sale at an Illinois
31        location; and
 
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 1                  (i)  the grain dealer  or  warehouseman  failed
 2             within   21  days  after  the  loan  of  money,  the
 3             surrender of warehouse receipts, or the delivery  of
 4             grain,  as the case may be, and no warehouse receipt
 5             was issued or payment in full was not  made  on  the
 6             grain sale, as the case may be; or
 7                  (ii)  written notice was given by the person to
 8             the  Department  within  21  days  after the loan of
 9             money, the surrender of warehouse receipts,  or  the
10             delivery  of grain, as the case may be, stating that
11             no warehouse receipt was issued or payment  in  full
12             made on the grain sale, as the case may be; or
13        (b)  a  producer  not  included  in  item  (a)(3)  in the
14    definition of "Claimant" who possesses evidence of  the  sale
15    at  an Illinois location of grain delivered to a failed grain
16    dealer and who was not paid in full.
17        "Class  I  warehouseman"  means  a  warehouseman  who  is
18    authorized to issue negotiable and  non-negotiable  warehouse
19    receipts.
20        "Class  II  warehouseman"  means  a  warehouseman  who is
21    authorized to issue only non-negotiable warehouse receipts.
22        "Code" means the Grain Code.
23        "Collateral" means:
24        (a)  irrevocable letters of credit;
25        (b)  certificates of deposit;
26        (c)  cash or a cash equivalent; or
27        (d)  any other property acceptable to the  Department  to
28    the  extent  there  exists  equity in that property.  For the
29    purposes of this item (d), "equity" is the  amount  by  which
30    the fair market value of the property exceeds the amount owed
31    to  a  creditor  who  has  a valid, prior, perfected security
32    interest in or other lien on the property.
33        "Corporation"  means   the   Illinois   Grain   Insurance
34    Corporation.
 
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 1        "Daily   position   record"   means   a  grain  inventory
 2    accountability  record  maintained  on  a  daily  basis  that
 3    includes  an  accurate  reflection  of   changes   in   grain
 4    inventory,  storage  obligations,  company-owned inventory by
 5    commodity, and other information  that  is  required  by  the
 6    Department.
 7        "Daily  grain  transaction  report" means a record of the
 8    daily transactions of a grain dealer showing  the  amount  of
 9    all grain received and shipped during each day and the amount
10    on hand at the end of each day.
11        "Date of delivery of grain" means:
12        (a)  the  date  grain  is delivered to a grain dealer for
13    the purpose of sale;
14        (b)  the date grain is delivered to  a  warehouseman  for
15    the purpose of storage; or
16        (c)  in   reference   to   grain   in   storage   with  a
17    warehouseman,  the  date  a  warehouse  receipt  representing
18    stored grain is delivered to  the  issuer  of  the  warehouse
19    receipt for the purpose of selling the stored grain or, if no
20    warehouse receipt was issued:
21             (1)  the date the purchase price for stored grain is
22        established; or
23             (2)  if  sold  by  price later contract, the date of
24        the price later contract.
25        "Department"   means   the   Illinois    Department    of
26    Agriculture.
27        "Depositor"  means a person who has evidence of a storage
28    obligation from a warehouseman.
29        "Director", unless otherwise provided, means the Illinois
30    Director of Agriculture, or the Director's designee.
31        "Emergency storage" means space measured in  bushels  and
32    used  for a period of time not to exceed 3 months for storage
33    of grain as a consequence of an emergency situation.
34        "Equity assets" means:
 
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 1        (a)  The equity in any property of the licensee or failed
 2    licensee, other than grain assets.  For purposes of this item
 3    (a):
 4             (1)  "equity" is the amount by which the fair market
 5        value of the  property  exceeds  the  amount  owed  to  a
 6        creditor  who  has  a valid security interest in or other
 7        lien on the property that was perfected before  the  date
 8        of failure of the licensee;
 9             (2)  a  creditor  is  not  deemed  to  have  a valid
10        security interest or other lien on property  if  (i)  the
11        property can be directly traced as being from the sale of
12        grain  by  the  licensee  or  failed  licensee;  (ii) the
13        security interest was taken as additional  collateral  on
14        account  of  an antecedent debt owed to the creditor; and
15        (iii) the security interest or other lien  was  perfected
16        (A)  on  or  within 90 days before the date of failure of
17        the licensee or  (B)  when  the  creditor  is  a  related
18        person,  within  one  year  of the date of failure of the
19        licensee.
20        "Failure" means, in reference to a licensee:
21        (a)  a  formal declaration of insolvency;
22        (b)  a revocation of a license;
23        (c)  a failure to  apply  for  license  renewal,  leaving
24    indebtedness to claimants;
25        (d)  a denial of license renewal, leaving indebtedness to
26    claimants; or
27        (e)  a   voluntary   surrender   of  a  license,  leaving
28    indebtedness to claimants.
29        "Federal warehouseman" means a warehouseman  licensed  by
30    the   United   States  government  under  the  United  States
31    Warehouse Act (7 U.S.C. 241 et seq.).
32        "Fund" means the Illinois Grain Insurance Fund.
33        "Grain" means corn, soybeans, wheat, oats,  rye,  barley,
34    grain  sorghum, canola, buckwheat, flaxseed, edible soybeans,
 
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 1    and other like agricultural commodities designated by rule.
 2        "Grain assets" means:
 3        (a)  all grain owned and all grain stored by  a  licensee
 4    or failed licensee, wherever located;
 5        (b)  redeposited grain of a licensee or failed licensee;
 6        (c)  identifiable  proceeds,  including,  but not limited
 7    to, insurance proceeds, received by or due to a  licensee  or
 8    failed   licensee   resulting   from   the   sale,  exchange,
 9    destruction, loss, or theft of grain, or other disposition of
10    grain by the licensee or failed licensee; or
11        (d)  assets in hedging  or  speculative  margin  accounts
12    held  by  commodity  or  security  exchanges  on  behalf of a
13    licensee or failed licensee and any moneys due or  to  become
14    due  to  a  licensee  or  failed  licensee,  less any secured
15    financing directly associated with those  assets  or  moneys,
16    from any transactions on those exchanges.
17        For   purposes  of  this  Act,  storage  charges,  drying
18    charges, price later  contract  service  charges,  and  other
19    grain  service  charges  received  by or due to a licensee or
20    failed licensee shall not be deemed to be grain  assets,  nor
21    shall  such charges be deemed to be proceeds from the sale or
22    other  disposition  of  grain  by  a  licensee  or  a  failed
23    licensee, or to have been directly  or  indirectly  traceable
24    from, to have resulted from, or to have been derived in whole
25    or  in  part from, or otherwise related to, the sale or other
26    disposition of grain by the licensee or failed licensee.
27        "Grain dealer" means a person  who  is  licensed  by  the
28    Department  to  engage  in  the business of buying grain from
29    producers.
30        "Grain Indemnity Trust Account"  means  a  trust  account
31    established  by the Director under Section 40.23 of the Civil
32    Administrative Code of Illinois that is used for the  receipt
33    and  disbursement  of  moneys paid from the Fund and proceeds
34    from the liquidation of and  collection  upon  grain  assets,
 
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 1    equity  assets,  collateral,  or guarantees of or relating to
 2    failed licensees.  The Grain Indemnity Trust Account shall be
 3    used to pay valid claims, authorized refunds from  the  Fund,
 4    and   expenses   incurred  in  preserving,  liquidating,  and
 5    collecting upon grain assets, equity assets, collateral,  and
 6    guarantees relating to failed licensees.
 7        "Guarantor" means a person who assumes all or part of the
 8    obligations of a licensee to claimants.
 9        "Guarantee"  means  a document executed by a guarantor by
10    which the guarantor assumes all or part of the obligations of
11    a licensee to claimants.
12        "Incidental  grain  dealer"  means  a  grain  dealer  who
13    purchases grain  only  in  connection  with  a  feed  milling
14    operation  and  whose total purchases of grain from producers
15    during the grain dealer's fiscal year do not exceed $100,000.
16        "Licensed  storage  capacity"  means  the  maximum  grain
17    storage  capacity  measured  in  bushels  approved   by   the
18    applicable licensing agency for use by a warehouseman.
19        "Licensee"  means  a  grain dealer or warehouseman who is
20    licensed by the Department and a federal warehouseman that is
21    a participant in the Fund, under subsection  (c)  of  Section
22    30-10.
23        "Official  grain  standards"  means  the  official  grade
24    designations  as  adopted  by the United States Department of
25    Agriculture under the United States Grain Standards  Act  and
26    regulations adopted under that Act (7 U.S.C. 71 et seq. and 7
27    CFR 810.201 et seq.).
28        "Permanent   storage  capacity"  means  the  capacity  of
29    permanent structures available for  storage  of  grain  on  a
30    regular and continuous basis and measured in bushels.
31        "Person"  means  any individual or entity, including, but
32    not limited to,  a  sole  proprietorship,  a  partnership,  a
33    corporation,   a   cooperative,  an  association,  a  limited
34    liability company, an estate, or a trust.
 
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 1        "Price later contract" means a written contract  for  the
 2    sale  of  grain whereby any part of the purchase price may be
 3    established by the seller after delivery of the  grain  to  a
 4    grain  dealer according to a pricing formula contained in the
 5    contract.  Title to the grain passes to the grain  dealer  at
 6    the time of delivery.  The precise form and the general terms
 7    and conditions of the contract shall be established by rule.
 8        "Producer"  means  the owner, tenant, or operator of land
 9    who has an interest in  and  receives  all  or  part  of  the
10    proceeds from the sale of the grain produced on the land.
11        "Producer protection holding corporation" means a holding
12    corporation  to  receive, hold title to, and liquidate assets
13    of or relating to a  failed  licensee,  including  assets  in
14    reference  to  collateral  or guarantees relating to a failed
15    licensee.
16        "Related persons" means affiliates  of  a  licensee,  key
17    persons  of a licensee, owners of a licensee, and persons who
18    have control over a  licensee.   For  the  purposes  of  this
19    definition:
20             (a)  "Affiliate"  means  a  person who has direct or
21        indirect control  of  a  licensee,  is  controlled  by  a
22        licensee, or is under common control with a licensee.
23             (b)  "Key  person"  means  an officer, a director, a
24        trustee, a partner, a proprietor, a manager,  a  managing
25        agent,  or  the  spouse  of  a licensee.  An officer or a
26        director  of  an  entity  organized  or  operating  as  a
27        cooperative, however, shall not be  considered  to  be  a
28        "key person".
29             (c)  "Owner"  means  the  holder of: over 10% of the
30        total combined voting power of a corporation or over  10%
31        of the total value of shares of all classes of stock of a
32        corporation;  over  a 10% interest in a partnership; over
33        10% of the value of a trust computed actuarially; or over
34        10% of the legal or  beneficial  interest  in  any  other
 
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 1        business,  association,  endeavor,  or  entity  that is a
 2        licensee.  For purposes of computing these percentages, a
 3        holder is deemed to own stock or  other  interests  in  a
 4        business  entity  whether  the  ownership  is  direct  or
 5        indirect.
 6             (d)  "Control" means the power to exercise authority
 7        over  or  direct the management or policies of a business
 8        entity.
 9             (e)  "Indirect" means an interest in a business held
10        by the holder not through the holder's actual holdings in
11        the business, but through the holder's holdings in  other
12        businesses.
13             (f)  Notwithstanding  any  other  provision  of this
14        Act, the term "related person" does not include a lender,
15        secured party, or other lien holder solely by  reason  of
16        the existence of the loan, security interest, or lien, or
17        solely  by  reason of the lender, secured party, or other
18        lien holder having or  exercising  any  right  or  remedy
19        provided  by  law  or  by  agreement with a licensee or a
20        failed licensee.
21        "Successor agreement"  means  an  agreement  by  which  a
22    licensee  succeeds  to  the  grain  obligations  of  a former
23    licensee.
24        "Temporary storage space" means space measured in bushels
25    and used for 6 months or less  for  storage  of  grain  on  a
26    temporary  basis  due  to  a  need  for additional storage in
27    excess of permanent storage capacity.
28        "Trust account" means the Grain Indemnity Trust Account.
29        "Valid claim" means a claim,  submitted  by  a  claimant,
30    whose  amount  and  category  have  been  determined  by  the
31    Department,  to  the extent that determination is not subject
32    to further administrative review or appeal.
33        "Warehouse" means a building, structure, or enclosure  in
34    which  grain  is  stored  for  the  public  for compensation,
 
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 1    whether grain of different owners is  commingled  or  whether
 2    identity of different lots of grain is preserved.
 3        "Warehouse  receipt"  means  a receipt for the storage of
 4    grain issued  by a warehouseman.
 5        "Warehouseman" means a person who is licensed:
 6             (a)  by the Department to engage in the business  of
 7        storing grain for compensation; or
 8             (b)  under  the  United  States  Warehouse  Act  who
 9        participates  in the Fund under subsection (c) of Section
10        30-10.
11    (Source: P.A. 89-287, eff. 1-1-96.)

12        (240 ILCS 40/1-15)
13        Sec. 1-15.  Powers and duties of Director.  The  Director
14    has  all powers necessary and proper to fully and effectively
15    execute the provisions of this Code and has the general  duty
16    to  implement  this  Code.   The Director's powers and duties
17    include, but are not limited to, the following:
18        (1)  The Director may, upon application, issue or  refuse
19    to  issue  licenses  under  this  Code,  and the Director may
20    extend,  renew,  reinstate,  suspend,   revoke,   or   accept
21    voluntary surrender of  licenses under this Code.
22        (2)  The Director shall examine and inspect each licensee
23    at  least  once each calendar year.  The Director may inspect
24    the premises used by a licensee  at  any  time.   The  books,
25    accounts,  records, and papers of a licensee are at all times
26    during business hours subject to inspection by the  Director.
27    Each  licensee  may  also  be required to make reports of its
28    activities, obligations, and  transactions  that  are  deemed
29    necessary  by the Director to determine whether the interests
30    of producers  and  the  holders  of  warehouse  receipts  are
31    adequately  protected and safeguarded.  The Director may take
32    action or issue orders that in the opinion  of  the  Director
33    are necessary to prevent fraud upon or discrimination against
 
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 1    producers or depositors by a licensee.
 2        (3)  The Director may, upon his or her initiative or upon
 3    the  written  verified  complaint of any person setting forth
 4    facts that if proved would constitute grounds for  a  refusal
 5    to issue or renew a license or for a suspension or revocation
 6    of  a license, investigate the actions of any person applying
 7    for, holding, or claiming to hold a license  or  any  related
 8    party of that person.
 9        (4)  The  Director  (but not the Director's designee) may
10    issue subpoenas and bring before the  Department  any  person
11    and  take testimony either at an administrative hearing or by
12    deposition with witness fees and mileage fees and in the same
13    manner as prescribed in the Code  of  Civil  Procedure.   The
14    Director  or  the Director's designee may administer oaths to
15    witnesses at any proceeding that the Department is authorized
16    by law to conduct.  The  Director  (but  not  the  Director's
17    designee)  may  issue  subpoenas  duces  tecum to command the
18    production of records  relating  to  a  licensee,  guarantor,
19    related business, related person, or related party. Subpoenas
20    are subject to the rules of the Department.
21        (5)  Notwithstanding   other   judicial   remedies,   the
22    Director  may  file  a  complaint  and  apply for a temporary
23    restraining order  or  preliminary  or  permanent  injunction
24    restraining   or  enjoining  any  person  from  violating  or
25    continuing to violate this Code or its rules.
26        (6)  The Director shall act  as  Trustee  for  the  Trust
27    Account,  act  as  Trustee  over  all collateral, guarantees,
28    grain assets, and equity assets held by  the  Department  for
29    the  benefit  of  claimants,  and exercise certain powers and
30    perform related duties under Section 20-5 of  this  Code  and
31    Section  40.23  of the Civil Administrative Code of Illinois,
32    except that the provisions of the Trust and Trustees  Act  do
33    not  apply  to  the  Trust Account or any other trust created
34    under this Code.
 
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 1        (7)  The Director shall personally serve as president  of
 2    the Corporation.
 3        (8)  The  Director shall collect and deposit all monetary
 4    penalties, printer registration fees, funds, and  assessments
 5    authorized under this Code into the Fund.
 6        (9)  The  Director  may  initiate any action necessary to
 7    pay refunds from the Fund.
 8        (10)  The Director shall maintain a  holding  corporation
 9    to  receive,  hold  title  to,  and  liquidate  assets  of or
10    relating to a failed licensee, including assets in  reference
11    to  collateral  or  guarantees, and deposit the proceeds into
12    the Fund.
13        (11)  The  Director  may  initiate,  participate  in,  or
14    withdraw from any proceedings to liquidate and  collect  upon
15    grain  assets,  equity  assets,  collateral,  and  guarantees
16    relating to a failed licensee, including, but not limited to,
17    all  powers  needed  to  carry  out the provisions of Section
18    20-15.
19        (12)  The Director, as Trustee or otherwise, may take any
20    action that may be reasonable or appropriate to enforce  this
21    Code and its rules.
22    (Source: P.A. 89-287, eff. 1-1-96.)

23        (240 ILCS 40/5-30)
24        Sec.  5-30.    Grain  Insurance  Fund  assessments.   The
25    Illinois   Grain   Insurance   Fund   is   established  as  a
26    continuation of the fund created  under  the  Illinois  Grain
27    Insurance  Act,  now repealed. Licensees and applicants for a
28    new license shall  pay  assessments  as  set  forth  in  this
29    Section.
30        (a)  Subject   to  subsection  (e)  of  this  Section,  a
31    licensee that is newly licensed after the effective  date  of
32    this  Code  shall  pay  an  assessment  into  the  Fund for 3
33    consecutive  years.   Except  as  provided  in  item  (6)  of
 
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 1    subsection (b) of this Section, the first assessment shall be
 2    paid at the time of or before the issuance of a new  license,
 3    the  second  assessment  shall be paid on or before the first
 4    anniversary date of the issuance of the new license, and  the
 5    third  assessment  shall  be  paid  on  or  before the second
 6    anniversary date of the issuance of the new license.   For  a
 7    grain   dealer,   the  initial  payment  of  each  of  the  3
 8    assessments shall be based upon the total estimated value  of
 9    grain  purchases  by the grain dealer for the applicable year
10    with the final assessment amount determined as set  forth  in
11    item  (6)  of  subsection  (b)  of  this  Section.  After the
12    licensee has  paid  or  was  required  to  pay  the  first  3
13    assessments  to the Department for payment into the Fund, the
14    licensee shall be subject to subsequent  assessments  as  set
15    forth in subsection (d) of this Section.
16        (b)  Grain dealer assessments.
17             (1)  The  first  assessment for a grain dealer shall
18        be an amount equal to:
19                  (A)  $0.000145 multiplied by the total value of
20             grain purchases for the grain dealer's first  fiscal
21             year  as  shown in the final financial statement for
22             that year provided to the Department  under  Section
23             5-20; and
24                  (B)  $0.000255  multiplied  by  that portion of
25             the value of grain purchases for the grain  dealer's
26             first  fiscal year that  exceeds the adjusted equity
27             of the licensee multiplied by 20, as  shown  on  the
28             final  financial  statement for the licensee's first
29             fiscal year provided to the Department under Section
30             5-20.
31             (2)  The minimum assessment for the first assessment
32        shall be $1,000 and the maximum shall be $10,000.
33             (3)  The second assessment for a grain dealer  shall
34        be an amount equal to:
 
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 1                  (A)  $0.0000725  multiplied  by the total value
 2             of grain purchases for  the  grain  dealer's  second
 3             fiscal   year   as  shown  in  the  final  financial
 4             statement for that year provided to  the  Department
 5             under Section 5-20; and
 6                  (B)  $0.0001275  multiplied  by that portion of
 7             the value of grain purchases for the grain  dealer's
 8             second  fiscal year that exceeds the adjusted equity
 9             of the licensee multiplied by 20, as  shown  on  the
10             final  financial statement for the licensee's second
11             fiscal year provided to the Department under Section
12             5-20.
13             (4)  The third assessment for a grain  dealer  shall
14        be an amount equal to:
15                  (A)  $0.0000725  multiplied  by the total value
16             of grain purchases  for  the  grain  dealer's  third
17             fiscal   year   as  shown  in  the  final  financial
18             statement for that year provided to  the  Department
19             under Section 5-20; and
20                  (B)  $0.0001275  multiplied  by that portion of
21             the value of grain purchases for the grain  dealer's
22             third  fiscal  year that exceeds the adjusted equity
23             of the licensee multiplied by 20, as  shown  on  the
24             final  financial  statement for the licensee's third
25             fiscal year.
26             (5)  The minimum second and third assessments  shall
27        be  $500  per year and the maximum for each year shall be
28        $5,000.
29             (6)  Each  of  the  first  3  assessments  shall  be
30        adjusted up or down based upon the  actual  annual  grain
31        purchases  for  each year as shown in the final financial
32        statement for that year provided to the Department  under
33        Section 5-20.  The adjustments shall be determined by the
34        Department  within  30  days  of  the date of approval of
 
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 1        renewal of a license. Refunds shall be paid  out  of  the
 2        Fund within 60 days after the Department's determination.
 3        Additional  amounts owed for assessments shall be paid as
 4        provided in subsection (f) of this Section.
 5             (7)  For the purposes of  grain  dealer  assessments
 6        under  subsection (b) of this Section, the total value of
 7        grain purchases shall be the total value  of  first  time
 8        grain purchases by at Illinois locations from producers.
 9        (c)  Warehouseman assessments.
10             (1)  The  first  assessment for a warehouseman shall
11        be an amount equal to:
12                  (A)  $0.00085 multiplied by the total permanent
13             storage capacity of the warehouseman at the time  of
14             license issuance; and
15                  (B)  $0.00099 multiplied by that portion of the
16             permanent  storage  capacity  of the warehouseman at
17             the  time  of  license  issuance  that  exceeds  the
18             adjusted equity of the licensee multiplied by 5, all
19             as shown on the final financial  statement  for  the
20             licensee  provided  to  the Department under Section
21             5-10.
22             (2)  The minimum assessment for the first assessment
23        shall be $1,000 and the maximum shall be $10,000.
24             (3)  The second and third assessments  shall  be  an
25        amount equal to:
26                  (A)  $0.000425    multiplied   by   the   total
27             permanent storage capacity of  the  warehouseman  at
28             the time of license issuance; and
29                  (B)  $0.000495  multiplied  by  that portion of
30             the  permanent  licensed  storage  capacity  of  the
31             warehouseman at the time of  license  issuance  that
32             exceeds   the   adjusted   equity  of  the  licensee
33             multiplied by 5, as shown  on  the  final  financial
34             statement  for  the licensee's last completed fiscal
 
SB1070 Engrossed            -15-               LRB9102813LDmb
 1             year provided to the Department under Section 5-20.
 2             (4)  The minimum assessment for the second and third
 3        assessments shall be $500 per assessment and the  maximum
 4        for each assessment shall be $5,000.
 5             (5)  Every warehouseman shall pay an assessment when
 6        increasing  available  permanent  storage  capacity in an
 7        amount equal to $0.001 multiplied by the total number  of
 8        bushels  to  be added to permanent storage capacity.  The
 9        minimum assessment on any increase in  permanent  storage
10        capacity shall be $50 and the maximum assessment shall be
11        $20,000.   The  assessment  based  upon  an  increase  in
12        permanent storage capacity shall be paid at or before the
13        time of approval of the  increase  in  permanent  storage
14        capacity.   This  assessment  on  the increased permanent
15        storage capacity does not relieve the warehouseman of any
16        assessments as  set  forth  in  subsection  (d)  of  this
17        Section.
18             (6)  Every  warehouseman  shall pay an assessment of
19        $0.0005 per  bushel  when  increasing  available  storage
20        capacity  by use of temporary storage space.  The minimum
21        assessment on temporary storage space shall be $100.  The
22        assessment based upon temporary storage  space  shall  be
23        paid  at  or before the time of approval of the amount of
24        the temporary storage space.    This  assessment  on  the
25        temporary  storage  space  capacity  does not relieve the
26        warehouseman  of  any  assessments  as   set   forth   in
27        subsection (d) of this Section.
28             (7)  Every  warehouseman  shall pay an assessment of
29        $0.001 per bushel  of  emergency    storage  space.   The
30        minimum  assessment  on any emergency storage space shall
31        be $100.  The assessment  based  upon  emergency  storage
32        space  shall be paid at or before the time of approval of
33        the  amount  of  the  emergency  storage   space.    This
34        assessment  on  the  emergency  storage  space  does  not
 
SB1070 Engrossed            -16-               LRB9102813LDmb
 1        relieve  the warehouseman of any assessments as set forth
 2        in subsection (d) of this Section.
 3        (d)  Subsequent assessments.
 4             (1)  If the equity in the Fund is  below  $3,000,000
 5        on September 1st of any year, every grain dealer who has,
 6        or  was required to have, already paid the first, second,
 7        and third assessments shall be assessed by the Department
 8        an amount equal to:
 9                  (A)  $0.0000725 multiplied by the  total  value
10             of  grain  purchases  for  the  grain  dealer's last
11             completed  fiscal  year  as  shown  in   the   final
12             financial  statement  for  that year provided to the
13             Department under Section 5-20; and
14                  (B)  $0.0001275 multiplied by that  portion  of
15             the  value of grain purchases for the grain dealer's
16             last completed fiscal year that exceeds the adjusted
17             equity of the licensee multiplied by 20, as shown on
18             the final financial  statement  for  the  licensee's
19             last   completed   fiscal   year   provided  to  the
20             Department under Section 5-20.
21             The minimum amount for a subsequent assessment shall
22        be $500 per year and the maximum amount shall  be  $5,000
23        per  year.   For the purposes of grain dealer assessments
24        under this item (1) of subsection (d)  of  this  Section,
25        the  total  value  of  grain purchases shall be the total
26        value of  first  time  grain  purchases  by  of  Illinois
27        locations from producers.
28             (2)  If  the  equity in the Fund is below $3,000,000
29        on September 1st of any year, every warehouseman who has,
30        or was required to have, already paid the first,  second,
31        and third assessments shall be assessed by the Department
32        an amount equal to:
33                  (A)  $0.000425 multiplied by the total licensed
34             storage capacity of the warehouseman as of September
 
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 1             1st of that year; and
 2                  (B)  $0.000495  multiplied  by  that portion of
 3             the licensed storage capacity of the warehouseman as
 4             of September 1st  of  that  year  that  exceeds  the
 5             adjusted  equity of the licensee multiplied by 5, as
 6             shown on  the  final  financial  statement  for  the
 7             licensee's  last  completed  fiscal year provided to
 8             the Department under Section 5-20.
 9             The minimum amount for a subsequent assessment shall
10        be $500 per year and the maximum amount shall  be  $5,000
11        per year.
12             (3)  If  the  due date for the payment by a licensee
13        of the third assessment is after September 1st in a  year
14        when  the  equity  in  the Fund is below $3,000,000, that
15        licensee shall not be subject to a subsequent  assessment
16        for that year.
17        (e)  Newly licensed; exemptions.
18             (1)  For  the purpose of assessing fees for the Fund
19        under subsection (a) of this Section, and subject to  the
20        provisions of item (e)(2) of this Section, the Department
21        shall consider the following to be newly licensed:
22                  (A)  A  person  that becomes a licensee for the
23             first time after the effective date of this Code.
24                  (B)  A licensee who has a lapse in licensing of
25             more  than  30  days.   A  license  shall   not   be
26             considered  to  be  lapsed  after  its revocation or
27             termination if an administrative or judicial  action
28             is  pending or if an order from an administrative or
29             judicial body continues an existing license.
30                  (C)  A  grain  dealer   that   is   a   general
31             partnership   in   which   there   is  a  change  in
32             partnership interests and  that  change  is  greater
33             than 50% during the partnership's fiscal year.
34                  (D)  A   grain   dealer   that   is  a  limited
 
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 1             partnership in  which  there  is  a  change  in  the
 2             controlling  interest  of a general partner and that
 3             change is greater than 50% of the total  controlling
 4             interest  during  the  limited  partnership's fiscal
 5             year.
 6                  (E)  A grain dealer that is a limited liability
 7             company in which there is  a  change  in  membership
 8             interests and that change is greater than 50% during
 9             the limited liability company's fiscal year.
10                  (F)  A  grain  dealer  that  is the result of a
11             statutory consolidation if that person has  adjusted
12             equity  of  less  than  90% of the combined adjusted
13             equity of the predecessor persons who  consolidated.
14             For  the  purposes  of  this paragraph, the adjusted
15             equity of the resulting person shall  be  determined
16             from  the  approved or certified financial statement
17             submitted to the Department  for  the  first  fiscal
18             year  of  the  resulting person.  For the purpose of
19             this paragraph, the combined adjusted equity of  the
20             predecessor persons shall be determined by combining
21             the  adjusted  equity  of each predecessor person as
22             set forth in the most recent approved  or  certified
23             financial   statement  of  each  predecessor  person
24             submitted to the Department.
25                  (G)  A grain dealer that is  the  result  of  a
26             statutory  merger if that person has adjusted equity
27             of less than 90% of the combined adjusted equity  of
28             the   predecessor   persons  who  merged.   For  the
29             purposes of this paragraph, the adjusted  equity  of
30             the  resulting  person  shall be determined from the
31             approved or certified financial statement  submitted
32             to  the  Department for the first fiscal year of the
33             resulting person ending after the merger.   For  the
34             purposes  of  this  paragraph, the combined adjusted
 
SB1070 Engrossed            -19-               LRB9102813LDmb
 1             equity  of  the   predecessor   persons   shall   be
 2             determined  by combining the adjusted equity of each
 3             predecessor person as set forth in the  most  recent
 4             approved  or certified financial statement submitted
 5             to the Department for the last fiscal year  of  each
 6             predecessor  person  ending on the date of or before
 7             the merger.
 8                  (H)  A  grain  dealer   that   is   a   general
 9             partnership   in   which   there   is  a  change  in
10             partnership interests and that change is 50% or less
11             during the partnership's fiscal year if the adjusted
12             equity of the partnership after the change  is  less
13             than  90%  of the adjusted equity of the partnership
14             before  the  change.   For  the  purpose   of   this
15             paragraph,  the  adjusted  equity of the partnership
16             after  the  change  shall  be  determined  from  the
17             approved or certified financial statement  submitted
18             to  the  Department for the first fiscal year ending
19             after  the  change.   For  the  purposes   of   this
20             paragraph,  the  adjusted  equity of the partnership
21             before the  change  shall  be  determined  from  the
22             approved  or certified financial statement submitted
23             to the Department for the last fiscal  year  of  the
24             partnership  ending  on  the  date  of or before the
25             change.
26                  (I)  A  grain  dealer   that   is   a   limited
27             partnership  in  which  there  is  a  change  in the
28             controlling interest of a general partner  and  that
29             change  is  50%  or  less  of  the total controlling
30             interest during the partnership's fiscal year if the
31             adjusted equity of the partnership after the  change
32             is  less  than  90%  of  the  adjusted equity of the
33             partnership before the change.  For the purposes  of
34             this   paragraph,   the   adjusted   equity  of  the
 
SB1070 Engrossed            -20-               LRB9102813LDmb
 1             partnership after the  change  shall  be  determined
 2             from  the  approved or certified financial statement
 3             submitted to the Department  for  the  first  fiscal
 4             year  ending  after the change.  For the purposes of
 5             this  paragraph,  the   adjusted   equity   of   the
 6             partnership  before  the  change shall be determined
 7             from the approved or certified  financial  statement
 8             submitted to the Department for the last fiscal year
 9             of  the  partnership ending on the date of or before
10             the change.
11                  (J)  A grain dealer that is a limited liability
12             company in which there is  a  change  in  membership
13             interests  and  that  change  is  50% or less of the
14             total  membership  interests  during   the   limited
15             liability  company's  fiscal  year  if  the adjusted
16             equity of the limited liability  company  after  the
17             change  is  less  than 90% of the adjusted equity of
18             the limited liability  company  before  the  change.
19             For  the  purposes  of  this paragraph, the adjusted
20             equity of the limited liability  company  after  the
21             change  shall  be  determined  from  the approved or
22             certified  financial  statement  submitted  to   the
23             Department  for  the  first fiscal year ending after
24             the change.  For the purposes of this paragraph, the
25             adjusted equity of  the  limited  liability  company
26             before  the  change  shall  be  determined  from the
27             approved or certified financial statement  submitted
28             to  the  Department  for the last fiscal year of the
29             limited liability company ending on the date  of  or
30             before the change.
31                  (K)  A  grain  dealer  that  is the result of a
32             statutory consolidation or merger if one or more  of
33             the predecessor  persons that consolidated or merged
34             into  the resulting  grain dealer was not a licensee
 
SB1070 Engrossed            -21-               LRB9102813LDmb
 1             under this Code at the time of the consolidation  or
 2             merger.
 3             (2)  For  the purpose of assessing fees for the Fund
 4        as set forth in  subsection  (a)  of  this  Section,  the
 5        Department  shall  consider  the  following  as not being
 6        newly  licensed  and,  therefore,  exempt  from   further
 7        assessment unless an assessment is required by subsection
 8        (d) of this Section:
 9                  (A)  A  person  resulting  solely  from  a name
10             change of a licensee.
11                  (B)  A warehouseman changing  from  a  Class  I
12             warehouseman  to  a  Class II warehouseman or from a
13             Class II warehouseman  to  a  Class  I  warehouseman
14             under this Code.
15                  (C)  A  licensee  that  becomes  a wholly owned
16             subsidiary of another licensee.
17                  (D)  Subject to item (e)(1)(K) of this Section,
18             a  person  that  is  the  result  of   a   statutory
19             consolidation  if  that  person  has adjusted equity
20             greater  than  or  equal  to  90%  of  the  combined
21             adjusted  equity  of  the  predecessor  persons  who
22             consolidated.  For the purposes of  this  paragraph,
23             the adjusted equity of the resulting person shall be
24             determined  from the approved or certified financial
25             statement submitted to the Department for the  first
26             fiscal  year  of  the  resulting  person.   For  the
27             purpose  of  this  paragraph,  the combined adjusted
28             equity  of  the   predecessor   persons   shall   be
29             determined  by  combining  the  net  worth  of  each
30             predecessor  person as set forth in the  most recent
31             approved or certified financial  statement  of  each
32             predecessor person submitted to the Department.
33                  (E)  Subject to item (e)(1)(K) of this Section,
34             a person that is the result of a statutory merger if
 
SB1070 Engrossed            -22-               LRB9102813LDmb
 1             that  person  has  adjusted  equity  greater than or
 2             equal to 90% of the combined adjusted equity of  the
 3             predecessor persons who merged.  For the purposes of
 4             this paragraph, the adjusted equity of the resulting
 5             person  shall  be  determined  from  the approved or
 6             certified  financial  statement  submitted  to   the
 7             Department   for   the  first  fiscal  year  of  the
 8             resulting person ending after the merger.   For  the
 9             purposes  of  this  paragraph, the combined adjusted
10             equity  of  the   predecessor   persons   shall   be
11             determined  by combining the adjusted equity of each
12             predecessor person as set forth in the  most  recent
13             approved or certified financial statement, submitted
14             to  the  Department for the last fiscal year of each
15             predecessor person ending on the date of  or  before
16             the merger.
17                  (F)  A  general partnership in which there is a
18             change in partnership interests and that  change  is
19             50% or less during the partnership's fiscal year and
20             the  adjusted  equity  of  the partnership after the
21             change is greater  than  or  equal  to  90%  of  the
22             adjusted   equity  of  the  partnership  before  the
23             change.  For the purposes  of  this  paragraph,  the
24             adjusted  equity of the partnership after the change
25             shall be determined from the approved  or  certified
26             financial  statement submitted to the Department for
27             the first fiscal year ending after the change.   For
28             the  purposes of this paragraph, the adjusted equity
29             of  the  partnership  before  the  change  shall  be
30             determined from the approved or certified  financial
31             statement  submitted  to the Department for the last
32             fiscal year of the partnership ending on the date of
33             or before the change.
34                  (G)  A limited partnership in which there is  a
 
SB1070 Engrossed            -23-               LRB9102813LDmb
 1             change  in  the  controlling  interest  of a general
 2             partner and that change is 50% or less of the  total
 3             controlling interest during the partnership's fiscal
 4             year  and  the  adjusted  equity  of the partnership
 5             after the change is greater than or equal to 90%  of
 6             the  adjusted  equity  of the partnership before the
 7             change.  For the purposes  of  this  paragraph,  the
 8             adjusted  equity of the partnership after the change
 9             shall be determined from the approved  or  certified
10             financial  statement submitted to the Department for
11             the first fiscal year ending after the change.   For
12             the  purposes of this paragraph, the adjusted equity
13             of  the  partnership  before  the  change  shall  be
14             determined from the approved or certified  financial
15             statement  submitted  to the Department for the last
16             fiscal year of the partnership ending on the date of
17             or before the change.
18                  (H)  A limited liability company in which there
19             is a change in membership interests and that  change
20             is  50%  or  less  of the total membership interests
21             during the limited liability company's  fiscal  year
22             if  the  adjusted  equity  of  the limited liability
23             company after the change is greater than or equal to
24             90% of the adjusted equity of the limited  liability
25             company before the change.  For the purposes of this
26             paragraph,   the  adjusted  equity  of  the  limited
27             liability  company  after  the   change   shall   be
28             determined  from the approved or certified financial
29             statement submitted to the Department for the  first
30             fiscal  year  ending  after  the  change.   For  the
31             purposes  of  this paragraph, the adjusted equity of
32             the limited  liability  company  before  the  change
33             shall  be  determined from the approved or certified
34             financial statement submitted to the Department  for
 
SB1070 Engrossed            -24-               LRB9102813LDmb
 1             the  last  fiscal  year  of  the  limited  liability
 2             company  ending on the date of or before the change.
 3                  (I)  A licensed warehouseman that is the result
 4             of a statutory merger or consolidation to the extent
 5             the  combined  storage  capacity  of  the  resulting
 6             warehouseman  has  been  assessed  under  this  Code
 7             before the statutory merger or consolidation, except
 8             that  any  storage   capacity   of   the   resulting
 9             warehouseman  that  has not previously been assessed
10             under this Code shall be  assessed  as  provided  in
11             items (c)(5), (c)(6), and (c)(7) of this Section.
12                  (J)  A federal warehouseman who participated in
13             the  Fund  under  Section 30-10 and who subsequently
14             received an  Illinois  license  to  the  extent  the
15             storage  capacity  of  the warehouseman was assessed
16             under this Code prior to Illinois licensing.
17        (f)  Except for the  first  assessment  made  under  this
18    Section,  and  assessments  under  items  (c)(5), (c)(6), and
19    (c)(7) of this Section, all assessments shall be paid to  the
20    Department  within  60  days  after  the  date  posted on the
21    written notice of assessment.  The Department  shall  forward
22    all paid assessments to the Fund.
23    (Source: P.A. 89-287, eff. 1-1-96.)

24        (240 ILCS 40/10-10)
25        Sec. 10-10.  Duties and requirements of grain dealers.
26        (a)  Long and short market position.
27             (1)  Grain  dealers  shall  at all times maintain an
28        accurate and  current  long  and  short  market  position
29        record  for  each  grain  commodity.  The position record
30        shall at a minimum contain the net position of all  grain
31        owned,  wherever  located,  grain purchased and sold, and
32        any grain option contract purchased or sold.
33             (2)  Grain dealers, except grain  dealers  regularly
 
SB1070 Engrossed            -25-               LRB9102813LDmb
 1        and  continuously  reporting  to  the  Commodity  Futures
 2        Trading Commission or grain dealers who have obtained the
 3        permission  of the Department to have different open long
 4        or short market positions, may maintain an open  position
 5        in the grain commodity of which the grain dealer buys the
 6        greatest  number of bushels per fiscal year not to exceed
 7        one bushel for each $10 of adjusted equity at fiscal year
 8        end up to a maximum open position of 50,000  bushels  and
 9        one-half  that number of bushels up to 25,000 bushels for
10        all other grain commodities that the grain dealer buys. A
11        grain dealer, however, may maintain an open  position  of
12        up  to   5,000 bushels for each grain commodity the grain
13        dealer buys.
14        (b)  The license issued by  the  Department  to  a  grain
15    dealer  shall  be  posted  in  the  principal  office  of the
16    licensee in this State.  A certificate  shall  be  posted  in
17    each  location  where  the  licensee engages in business as a
18    grain dealer.  In the case of a licensee operating a truck or
19    tractor trailer unit for the purpose of purchasing grain, the
20    licensee shall have a certificate carried in  each  truck  or
21    tractor  trailer  unit used in connection with the licensee's
22    grain dealer business.
23        (c)  The licensee  must  have  at  all  times  sufficient
24    financial  resources  to  pay  producers  on demand for grain
25    purchased from them.
26        (d)  A licensee that is solely a grain dealer shall on  a
27    daily  basis  maintain  an  accurate  and current daily grain
28    transaction report.
29        (e)  A licensee  that  is  both  a  grain  dealer  and  a
30    warehouseman  shall  at  all  times  maintain an accurate and
31    current daily position record.
32        (f)  In the case of a change  of  ownership  of  a  grain
33    dealer, the obligations of a grain dealer do not cease until
34    the  grain  dealer  its  successor is properly licensed under
 
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 1    this  Code,  it  has  surrendered  all  unused  price   later
 2    contracts  to the Department and the successor has executed a
 3    successor's  agreement,  or  the  successor   has   otherwise
 4    provided for the grain obligations of its predecessor.
 5        (g)  If  a  grain dealer proposes to cease doing business
 6    as a grain dealer and there is no successor, it is  the  duty
 7    of  the  grain  dealer  to  surrender  all unused price later
 8    contracts to  the  Department,  together  with  an  affidavit
 9    accounting for all grain dealer obligations setting forth the
10    arrangements made with producers for final disposition of the
11    grain  dealer  obligations  and  indicating the procedure for
12    payment in full of all outstanding grain obligations.  It  is
13    the duty of the Department to give notice by publication that
14    a grain dealer has ceased doing business without a successor.
15      After payment in full of all outstanding grain obligations,
16    it is the duty of the grain dealer to surrender its license.
17    (Source: P.A. 89-287, eff. 1-1-96.)

18        (240 ILCS 40/10-15)
19        Sec. 10-15.  Price later contracts.
20        (a)  Price  later  contracts  shall  be  written on forms
21    prescribed by the Department.   Price  later  contract  forms
22    shall  be  printed  by  a  person  authorized  to print those
23    contracts by the Department after that person has  agreed  to
24    comply with each of the following:
25             (1)  That all price later contracts shall be printed
26        as    prescribed  by  the Department and shall be printed
27        only for a licensed grain dealer.
28             (2)  That  all  price  later  contracts   shall   be
29        numbered  consecutively  and  a  complete record of these
30        contracts shall be retained showing for whom printed  and
31        the consecutive numbers printed on the contracts.
32             (3)  That  a duplicate copy of all invoices rendered
33        for printing price later contracts  that  will  show  the
 
SB1070 Engrossed            -27-               LRB9102813LDmb
 1        consecutive  numbers  printed  on  the contracts, and the
 2        number of contracts printed, shall be promptly  forwarded
 3        to the Department.
 4             (4)  that   the   person  shall  register  with  the
 5        Department and pay an annual registration fee of $100  to
 6        print price later contracts.
 7        (b)  A  grain  dealer  purchasing  grain  by  price later
 8    contract shall at all  times  own  grain,  rights  in  grain,
 9    proceeds  from the sale of grain, and other assets acceptable
10    to the Department as set forth in this Code totaling  90%  of
11    the  unpaid  balance  of  the  grain dealer's obligations for
12    grain purchased by price later contract.  That  amount  shall
13    at  all times remain unencumbered and shall be represented by
14    the aggregate of the following:
15             (1)  Grain owned by the grain dealer valued by means
16        of the hedging procedures method  that  includes  marking
17        open contracts to market.
18             (2)  Cash on hand.
19             (3)  Cash  held  on  account  in  federally or State
20        licensed financial institutions.
21             (4)  Investments  held   in   time   accounts   with
22        federally or State licensed financial institutions.
23             (5)  Direct obligations of the U.S. government.
24             (6)  Funds  on  deposit  Balances  in  grain  margin
25        accounts determined by marking to market.
26             (7)  Balances  due  or to become due to the licensee
27        on price later contracts.
28             (8)  Marketable securities, including mutual funds.
29             (9)  Irrevocable letters of credit in favor  of  the
30        Department and acceptable to the Department.
31             (10)  Price later contract service charges due or to
32        become due to the licensee.
33             (11) Other evidence of proceeds  from  or  of  grain
34        that is acceptable to the Department.
 
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 1        (c)  For  the  purpose  of  computing the dollar value of
 2    grain  and  the  balance  due   on   price   later   contract
 3    obligations,  the  value  of  grain  shall  be figured at the
 4    current market price.
 5        (d)  Title to grain sold by price  later  contract  shall
 6    transfer  to  a  grain  dealer on the date of delivery of the
 7    grain.  Therefore, no storage  charges  shall  be  made  with
 8    respect  to  grain  purchased  by  price  later  contract.  A
 9    service charge for handling the  contract,  however,  may  be
10    made.
11        (e)  Subject  to  subsection  (f)  of  this Section, if a
12    price later contract is not signed by all parties  within  30
13    days  of  the  last  date of delivery of grain intended to be
14    sold by price later contract, then the grain intended  to  be
15    sold  by  price  later  contract  shall be priced on the next
16    business day after 30 days from the last date of delivery  of
17    grain  intended  to  be  sold  by price later contract at the
18    market price of the grain at the close of the  next  business
19    day  after  the 29th day. When the grain is priced under this
20    subsection, the grain dealer shall send notice to the  seller
21    of  the  grain  within  10 days. The notice shall contain the
22    number of bushels sold, the price per bushel, all  applicable
23    discounts,  the  net  proceeds, and a notice that states that
24    the Grain Insurance  Fund  shall  provide  protection  for  a
25    period  of  only  160  days  from  the date of pricing of the
26    grain.
27        (f)  If grain is in storage with a  warehouseman  and  is
28    intended to be sold by price later contract, that grain shall
29    be  considered as remaining in storage and not be deemed sold
30    by price later  contract  until  the  date  the  price  later
31    contract is signed by all parties.
32        (g)  Scale  tickets  or  other  approved  documents  with
33    respect  to  grain purchased by a grain dealer by price later
34    contract shall contain the  following:   "Sold  Grain;  Price
 
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 1    Later".
 2        (h)  Price  later contracts shall be issued consecutively
 3    and recorded by the grain dealer as established by rule.
 4        (i)  A  grain  dealer  shall  not  issue   a   collateral
 5    warehouse  receipt  on  grain  purchased  by  a  price  later
 6    contract  to  the extent the purchase price has not been paid
 7    by the grain dealer.
 8        (j)  Failure to comply  with  the  requirements  of  this
 9    Section may result in suspension of the privilege to purchase
10    grain by price later contract for up to one year.
11    (Source: P.A. 89-287, eff. 1-1-96.)

12        (240 ILCS 40/10-25)
13        Sec. 10-25.  Warehouse receipts and storage of grain.
14        (a)  When  grain  is  delivered  to  a  warehouseman at a
15    location where grain is also purchased,  the  licensee  shall
16    give  written  evidence of delivery of grain and that written
17    evidence shall be marked to indicate  whether  the  grain  is
18    delivered  for  storage  or  for  sale.   In  the  absence of
19    adequate evidence of sale, the grain shall be construed to be
20    in storage.
21        (b)  Upon demand by a  depositor,  a  warehouseman  shall
22    issue warehouse receipts for grain delivered into storage.
23        (c)  There  shall  be  no  charge for the first warehouse
24    receipt issued to a depositor  for  a  given  lot  of  grain.
25    Charges  for  any  additional  warehouse  receipts  for grain
26    previously  covered  by   a   warehouse   receipt   must   be
27    commensurate  with  the  cost  of  issuance of the additional
28    warehouse receipt.
29        (d)  A warehouseman shall issue warehouse  receipts  only
30    in accordance with the following requirements:
31             (1)  Warehouse   receipts   shall  be  consecutively
32        numbered in a form prescribed by the Department and  when
33        issued  from the same warehouse shall be consecutively by
 
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 1        the warehouseman numbered.
 2             (2)  In the case of a lost  or  destroyed  warehouse
 3        receipt,  the  new  warehouse receipt shall bear the same
 4        date as the original and shall be plainly marked  on  its
 5        face  "duplicate  in  lieu of lost or destroyed warehouse
 6        receipt number .......", and the warehouseman shall  duly
 7        fill  in the blank with the appropriate warehouse receipt
 8        number.
 9             (3)  Warehouse receipts shall be printed by a person
10        authorized printer approved by the Department. The person
11        shall register with the  Department  and  pay  an  annual
12        registration fee of $100 to print warehouse receipts.
13             (4)  Negotiable  warehouse  receipts shall be issued
14        only for grain actually in storage with the  warehouseman
15        from   which   it   is  issued  or  redeposited  by  that
16        warehouseman as provided in  subsection  (e)  of  Section
17        10-20.
18             (5)  A   warehouseman   shall   not  insert  in  any
19        negotiable warehouse receipt issued by  it  any  language
20        that  in  any  way  limits  or  modifies its liability or
21        responsibility.
22        (e)  Upon delivery  of  grain  covered  by  a  negotiable
23    warehouse  receipt,  the  holder  of the negotiable warehouse
24    receipt   must   surrender   the   warehouse   receipt    for
25    cancellation,  and a warehouseman must cancel and issue a new
26    negotiable warehouse receipt for  the  balance  of  grain  in
27    storage.
28        (f)  When all grain, the storage of which is evidenced by
29    a warehouse receipt, is delivered from storage, the warehouse
30    receipt shall be plainly marked across its face with the word
31    "cancelled"  and  shall  have  written  on  it  the  date  of
32    cancellation,  the name of the person canceling the warehouse
33    receipt, and such other information as required by rule,  and
34    is thereafter void.
 
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 1        (g)  When  a  warehouseman  delivers grain out of storage
 2    but fails to collect  and  cancel  the  negotiable  warehouse
 3    receipt, the warehouseman shall be liable to any purchaser of
 4    the  negotiable warehouse receipt for value in good faith for
 5    failure to deliver the grain to the  purchaser,  whether  the
 6    purchaser acquired the negotiable warehouse receipt before or
 7    after  the  delivery  of  the grain by the warehouseman.  If,
 8    however, grain has been lawfully sold by  a  warehouseman  to
 9    satisfy  its  warehouseman's lien, the warehouseman shall not
10    be liable for failure to deliver the grain  pursuant  to  the
11    demands  of a holder of a negotiable warehouse receipt to the
12    extent of the amount of grain sold.
13        (h)  Except as otherwise provided by this Code  or  other
14    applicable  law,  a warehouseman shall deliver the grain upon
15    demand made by the holder of a warehouse  receipt  pertaining
16    to that grain if the demand is accompanied by:
17             (1)  satisfaction of the warehouseman's lien;
18             (2)  in  the case of a negotiable warehouse receipt,
19        a properly endorsed negotiable warehouse receipt; or
20             (3)  in  the  case  of  a  non-negotiable  warehouse
21        receipt, written evidence that the grain was delivered to
22        the warehouseman and that the depositor  is  entitled  to
23        it.
24        (i)  If  no warehouse receipt is issued to a depositor, a
25    warehouseman  shall  deliver  grain  upon  the  demand  of  a
26    depositor if the demand is accompanied by satisfaction of the
27    warehouseman's lien and written evidence that the  grain  was
28    delivered  to  the warehouseman and the depositor is entitled
29    to it.
30        (j)  If a warehouseman refuses or fails to deliver  grain
31    in  compliance  with  a  demand  by  a  holder of a warehouse
32    receipt or a depositor, the burden is on the warehouseman  to
33    establish the existence of a lawful excuse for the refusal.
34        (k)  If a warehouse receipt has been lost or destroyed, a
 
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 1    warehouseman  may  issue  a  substitute warehouse receipt, as
 2    provided  for  in  this  Section,  upon   delivery   to   the
 3    warehouseman  of  an  affidavit  under  oath stating that the
 4    applicant for the substitute warehouse receipt is entitled to
 5    the  original  warehouse  receipt  and  setting   forth   the
 6    circumstances that resulted in the loss or destruction of the
 7    original  warehouse  receipt.   The  warehouseman may request
 8    from the depositor a bond in double the value  of  the  grain
 9    represented  by the original warehouse receipt at the time of
10    issuance of the substitute warehouse receipt so as to protect
11    the warehouseman from any liability or expense  that  it,  or
12    any  person  injured  by the delivery, may incur by reason of
13    the original warehouse receipt remaining outstanding.
14        (l)  A  warehouse  receipt  that  is  to  be   used   for
15    collateral purposes by a warehouseman must be first issued by
16    the warehouseman to itself.
17        (m)  The Department shall approve temporary storage space
18    in  an  amount  to be determined by the Department if all the
19    following conditions are met:
20             (1)  The warehouseman pays all fees and  assessments
21        associated with the temporary storage space.
22             (2)  The  warehouseman  demonstrates that there is a
23        need for additional storage on a temporary basis due to a
24        bumper crop or otherwise.
25             (3)  The structure for the storage  of  grain  meets
26        all of the following requirements:
27                  (A)    The  grain  storage area has a permanent
28             base made of concrete, asphalt, or a material having
29             similar structural qualities.
30                  (B)   Hot spot detectors,  aeration  fans,  and
31             ducts  are  provided  to  assure that the quality of
32             grain in storage is maintained.
33                  (C)   The grain  storage  structure  has  rigid
34             sidewalls  made  of  concrete,  wood,  metal,  or  a
 
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 1             material having similar structural qualities.
 2                  (D)    The  grain storage structure is equipped
 3             with a waterproof covering of sufficient strength to
 4             support a person's weight and with inlets  to  allow
 5             airflow.
 6                  (E)    Access  to the grain is provided for the
 7             purpose of sampling and making examinations.
 8             (4)  Temporary storage space shall be considered  an
 9        increase in the licensed storage capacity of the licensee
10        and shall be subject to Section 5-30.
11             (5)  The  authorization  to  use  temporary  storage
12        space for the storage of grain shall expire at the end of
13        6  months after the date of approval by the Department or
14        May 15th, whichever comes first.
15        (n)  The Department may approve emergency  storage  space
16    at the request of the licensee according to rule.
17    (Source: P.A. 89-287, eff. 1-1-96.)

18        (240 ILCS 40/25-10)
19        Sec. 25-10.  Claimant compensation.  Within 30 days after
20    the  day  on  which a claim becomes a valid claim, a claimant
21    shall be compensated to the extent  of  its  valid  claim  in
22    accordance with the following provisions:
23        (a)  Valid  claims  filed by warehouse claimants shall be
24    paid 100% of the amount determined by the Department  out  of
25    the  net  proceeds  of the liquidation of grain assets as set
26    forth in this subsection (a).  To the extent the net proceeds
27    are insufficient, warehouse claimants shall be paid their pro
28    rata share of the net proceeds of the  liquidation  of  grain
29    assets  and,  subject  to  subsection (j) of this Section, an
30    additional amount per claimant not to exceed the  balance  of
31    their respective claims out of the Fund.
32        (b)  Subject  to  subsection  (j) of this Section, if the
33    net proceeds as set forth in subsection (a) of  this  Section
 
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 1    are  insufficient  to  pay  in full all valid claims filed by
 2    warehouse claimants as payment becomes due, the balance shall
 3    be paid out of the Fund in accordance with subsection (b)  of
 4    Section 25-20.
 5        (c)  Valid claims filed by producers who:
 6             (1)  have  delivered grain within 21 days before the
 7        date of failure for which pricing of that grain has  been
 8        completed before date of failure; or
 9             (2)  gave written notice to the Department within 21
10        days  of the date of delivery of grain, if the pricing of
11        that grain has been completed, that payment in  full  for
12        that grain has not been made;
13    shall  be  paid,  subject  to subsection (j) of this Section,
14    100% of the amount of  the  valid  claim  determined  by  the
15    Department.  Valid claims that are included in subsection (c)
16    of this Section shall receive no payment under subsection (d)
17    of  this Section, and any claimant having a valid claim under
18    this subsection (c) determined by the  Department  to  be  in
19    excess of the limits, if any, imposed under subsection (j) of
20    this  Section  shall  be  paid  only  sums in excess of those
21    limits to the extent  additional  money  is  available  under
22    subsection (d)(2) of Section 25-20.
23        (d)  Valid claims that are not included in subsection (c)
24    of  this  Section  that  are filed by producers who completed
25    delivery and pricing of  grain  in  reference  to  the  valid
26    claim, whichever is later, within 160 days before the date of
27    failure  shall  be  paid 85% of the amount of the valid claim
28    determined by the Department or $100,000, whichever is  less,
29    per claimant. For claims filed by producers for grain sold on
30    a  price  later  contract,  however, the later of the date of
31    execution of the contract or the date of delivery of grain in
32    reference to the grain covered by the  price  later  contract
33    must  not be more than 270 days before the date of failure in
34    order for the claimant to receive any compensation.
 
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 1        (e)  Valid claims filed by producers for grain sold on  a
 2    price  later contract, for which the final price has not been
 3    established, shall be paid 85% of the  amount  of  the  valid
 4    claims determined by the Department or $100,000, whichever is
 5    less,  per claimant, if the later of the date of execution of
 6    the contract or the date of delivery of grain in reference to
 7    the grain covered by the price  later  contract  occurred  no
 8    more than 270 days before the date of failure.  The execution
 9    of  subsequent  price later contracts by the producer and the
10    licensee for  grain  previously  covered  by  a  price  later
11    contract  shall not extend the coverage of a claim beyond the
12    original 270 days.
13        (f)  The maximum payment to producers  under  subsections
14    (d)  and (e) of this Section, combined, shall be $100,000 per
15    claimant.
16        (g)  The following claims shall be barred and  disallowed
17    in  their  entirety and shall not be entitled to any recovery
18    from the Fund or the Trust Account:
19             (1)  Claims filed by producers who completed pricing
20        of the grain in reference to their claim in excess of 160
21        days before the date of failure.
22             (2)  Claims filed by producers for grain sold  on  a
23        price  later  contract  if  the  later  of  the  date  of
24        execution  of  the  contract  or  the date of delivery of
25        grain in reference to the  grain  covered  by  the  price
26        later  contract  occurred  more  than 270 days before the
27        date of failure.
28        (h)  To the extent moneys are available,  additional  pro
29    rata  payments  may be made to claimants under subsection (d)
30    of Section 25-20.
31        (i)  For purposes of  this  Section,  a  claim  filed  in
32    connection with warehouse receipts that are possessed under a
33    collateral  pledge  of  a  producer, or that are subject to a
34    perfected security interest,  or  that  were  acquired  by  a
 
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 1    secured  party  or  of  lien  holder under an obligation of a
 2    producer, shall be deemed to be a claim filed by the producer
 3    and not a claim filed  by  the  secured  party  or  the  lien
 4    holder,  regardless  of  whether  the  producer is in default
 5    under that collateral pledge, security  agreement,  or  other
 6    obligation.
 7        (j)  With  respect  to  any failure occurring on or after
 8    July 1, 1998,  the  maximum  payment  out  of  the  Fund  for
 9    claimants  under  subsection (a), (b), or (c) of this Section
10    shall be $1,000,000 per claimant and the maximum payment  out
11    of the Fund for claimants under subsections (c), (d), and (e)
12    of this Section, combined, shall be $1,000,000 per claimant.
13    (Source: P.A. 89-287, eff. 1-1-96.)

14        (240 ILCS 40/25-20)
15        Sec. 25-20.  Priorities and repayments.
16        (a)  All  valid  claims  shall  be  paid  from  the Trust
17    Account,  as  provided  in  Section  25-10,  first  from  the
18    proceeds realized from liquidation of and collection upon the
19    grain assets relating to the failed licensee, as to warehouse
20    claimants, and the equity assets as to  a  secured  party  or
21    lien  holder  who has consented to the Department liquidating
22    and  collecting  upon  the  equity  asset  as  set  forth  in
23    subsection (f) of Section 20-15,  and  the  remaining  equity
24    assets,  collateral,  and  guarantees  relating to the failed
25    licensee, as to grain dealer claimants.
26        (b)  If the proceeds realized  from  liquidation  of  and
27    collection  upon the grain assets, equity assets, collateral,
28    and  guarantees  relating  to   the   failed   licensee   are
29    insufficient  to  pay all valid claims as provided in Section
30    25-10 and subsection (a) of this Section as payment on  those
31    claims becomes due, the Director shall request from the Board
32    sufficient funds to be transferred from the Fund to the Trust
33    Account  to  pay  the balance owed to claimants as determined
 
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 1    under Section 25-10.  If a request is made  by  the  Director
 2    for  a  transfer of funds to the Trust Account from the Fund,
 3    the Board shall act on that request within 25 days after  the
 4    date  of  that request.  Once moneys are transferred from the
 5    Fund to the Trust Account, the Director shall pay the balance
 6    owed to claimants in accordance with Section 25-10.
 7        (c)  Net proceeds from liquidation of grain assets as set
 8    forth in subsection (a) of  Section  25-10  received  by  the
 9    Department,  to  the  extent  not  already  paid to warehouse
10    claimants, shall be prorated among the fund and all warehouse
11    claimants who have not had their valid claims paid in full.
12             (1)  The pro rata distribution to the Fund shall  be
13        based  upon  the  total  amount  of  valid  claims of all
14        warehouse claimants who have had their valid claims  paid
15        in  full.   The  pro  rata distribution to each warehouse
16        claimant who has not had his or her valid claims paid  in
17        full  shall  be  based  upon  the  total  amount  of that
18        claimant's original valid claims.
19             (2)  If the net proceeds  from  the  liquidation  of
20        grain  assets  as  set forth in subsection (a) of Section
21        25-10 exceed all amounts  needed  to  satisfy  all  valid
22        claims   filed   by   warehouse  claimants,  the  balance
23        remaining shall be paid into the Trust Account or as  set
24        forth in subsection (h) (g) of Section 25-20.
25        (d)  Subject  to  subsections  (c) and (h) (g) of Section
26    25-20:
27             (1)  The proceeds realized from liquidation  of  and
28        collection   upon   the   grain  assets,  equity  assets,
29        collateral,  and  guarantees  relating  to   the   failed
30        licensee  or  any  other  assets  relating  to the failed
31        licensee that are received  by  the  Department,  to  the
32        extent not already paid to claimants, shall be first used
33        to  repay  the  Fund  for moneys transferred to the Trust
34        Account.
 
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 1             (2)  After the Fund is repaid in full for the moneys
 2        transferred from it to pay the valid claims in  reference
 3        to  a  failed  licensee,  any remaining proceeds realized
 4        from liquidation of and collection upon the grain assets,
 5        equity assets, collateral, and guarantees relating to the
 6        failed licensee thereafter  received  by  the  Department
 7        shall  be  prorated to the claimants holding valid claims
 8        who have not received 100% of the amount of  their  valid
 9        claims  based  upon  the  unpaid  amount  of  their valid
10        claims.
11        (e)  After all claimants have received 100% of the amount
12    of their valid claims, to the  extent  moneys  are  available
13    interest  at  the  rate of 6% per annum shall be assessed and
14    paid to the Fund on all moneys transferred from the  Fund  to
15    the Trust Account.
16        (f)  After  the  Fund is paid the interest as provided in
17    subsection (e) of this Section, then those claims barred  and
18    disallowed  under  subsection  (g)  of Section 25-10 shall be
19    paid on a pro rata basis only to the extent that  moneys  are
20    available.
21        (g)  Once  all  claims  become valid claims and have been
22    paid in full and all interest as provided in  subsection  (e)
23    of  this  Section is paid in full, and all claims are paid in
24    full under subsection (f), any remaining grain assets, equity
25    assets, collateral, and guarantees, and the proceeds realized
26    from liquidation of and collection  upon  the  grain  assets,
27    equity  assets,  collateral,  and  guarantees relating to the
28    failed licensee, shall be returned to the failed licensee  or
29    its  assignee,  or  as  otherwise  directed  by  a  court  of
30    competent jurisdiction.
31        (h)  If  amounts  in the Fund are insufficient to pay all
32    valid claims, the General Assembly shall appropriate  to  the
33    Corporation  amounts  sufficient to satisfy the valid claims.
34    If for any reason the  General  Assembly  fails  to  make  an
 
SB1070 Engrossed            -39-               LRB9102813LDmb
 1    appropriation  to satisfy outstanding valid claims, this Code
 2    constitutes an irrevocable and  continuing  appropriation  of
 3    all  amounts  necessary  for that purpose and the irrevocable
 4    and continuing authority  for  and  direction  to  the  State
 5    Comptroller  and to the State Treasurer to make the necessary
 6    transfers and disbursements from the revenues  and  funds  of
 7    the State for that purpose.  Subject to payments to warehouse
 8    claimants  as  set  forth in subsection (c) of Section 25-20,
 9    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. 89-287, eff. 1-1-96.)

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
 
SB1070 Engrossed            -40-               LRB9102813LDmb
 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        Section 5-30.
21             (6)  To administer the Fund by  investing  funds  of
22        the  Corporation  that  the  Board  may determine are not
23        presently needed for its corporate purposes.
24             (7)  To receive funds from the  Trust   Account  for
25        deposit into the  Fund.
26             (8)  Upon  the  request  of  the  Director,  to make
27        payment from the Fund to the Trust Account  when  payment
28        is  necessary  to compensate claimants in accordance with
29        the provisions of Section 25-20 or for payment of refunds
30        to licensees in accordance with the  provisions  of  this
31        Code.
32             (9)  To  have  those  powers  that  are necessary or
33        appropriate for the exercise of the  powers  specifically
34        conferred  upon the Corporation and all incidental powers
 
SB1070 Engrossed            -41-               LRB9102813LDmb
 1        that are customary in corporations.
 2    (Source: P.A. 89-287, eff. 1-1-96.)

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

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