State of Illinois
92nd General Assembly
Legislation

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[ Engrossed ][ House Amendment 002 ]


92_HB0524

 
                                               LRB9202743TAtm

 1        AN ACT to create the Agriculture Producer Protection Act.

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

 4        Section 1. Short title. This Act  may  be  cited  as  the
 5    Agriculture Producer Protection Act.

 6        Section  5.  Definitions. As used in this Act, unless the
 7    context otherwise requires:
 8        "Active contractor" means a person who owns  a  commodity
 9    that  is  produced  by  a  contract  producer at the contract
10    producer's  contract  operation  according  to  a  production
11    contract.
12        "Agricultural Contract" means a marketing contract  or  a
13    production contract.
14        "Animal feeding operation" means a lot, corral, building,
15    or  other  area  in  which  livestock is confined and fed. An
16    animal feeding operation does not include a livestock market.
17        "Capital investment" means an investment in  one  of  the
18    following:
19             (1)  A  structure,  such  as  a  building  or manure
20        storage structure.
21             (2)  Machinery   or   equipment   associated    with
22        producing a commodity that has a useful life in excess of
23        one year.
24        "Commodity" means livestock, raw milk, or a crop.
25        "Confinement  feeding  operation" means an animal feeding
26    operation in which livestock is confined to  areas  that  are
27    totally roofed.
28        "Contract  crop  field"  means  farmland  located in this
29    State where a crop is  produced  according  to  a  production
30    contract  by  a  contract  producer  who  owns  or leases the
31    farmland.
 
                            -2-                LRB9202743TAtm
 1        "Contract livestock facility"  means  an  animal  feeding
 2    operation  located  in  this  State in which livestock or raw
 3    milk is produced according to  a  production  contract  by  a
 4    contract  producer  who  holds a legal interest in the animal
 5    feeding operation. "Contract livestock facility"  includes  a
 6    confinement  feeding  operation,  an open feedlot, or an area
 7    that is used for the raising of crops or other vegetation and
 8    upon which livestock is fed for slaughter or  is  allowed  to
 9    graze or feed.
10        "Contract  operation" means a contract livestock facility
11    or a contract crop field.
12        "Contract producer" means a producer who  holds  a  legal
13    interest   in   a  contract  operation  and  who  produces  a
14    commodity under a production contract.
15        "Contractor" means a person who is an  active  contractor
16    or a passive contractor.
17        "Crop"  means  a plant used for food, animal feed, fiber,
18    oil, pharmaceuticals, nutriceuticals, or seed, including  but
19    not  limited  to  alfalfa,  barley,  buckwheat,  corn,  flax,
20    forage,   millet,  oats,  popcorn,  rye,  sorghum,  soybeans,
21    sunflowers, tobacco, wheat, and grasses used  for  forage  or
22    silage.
23        "Department" means the Department of Agriculture.
24        "Director" means the Director of Agriculture.
25        "Farmland"  means  agricultural land that is suitable for
26    use in farming.
27        "Investment requirement" means a provision in a  contract
28    that   requires   the   contract  producer  to  make  capital
29    investments associated with producing a commodity subject  to
30    a production contract. The provisions may be included as part
31    of  one  or more oral or written agreements or contracts, and
32    may be included as part of a production contract.
33        "Livestock" means beef  cattle,  dairy  cattle,  poultry,
34    sheep, or swine.
 
                            -3-                LRB9202743TAtm
 1        "Marketing  contract"  means an oral or written agreement
 2    between a processor  and  a  producer  for  the  purchase  of
 3    commodities  grown or raised by the producer in this State. A
 4    marketing contract is executed when it is  signed  or  orally
 5    agreed  to  by each party or by a person authorized to act on
 6    the party's behalf.
 7        "Open feedlot" means  an  unroofed  or  partially  roofed
 8    animal  feeding  operation  in  which no crop, vegetation, or
 9    forage growth or  residue  cover  is  maintained  during  the
10    period that livestock is confined in the operation.
11        "Passive   contractor"   means  a  person  who  furnishes
12    management services to a contract producer, and who does  not
13    own  a commodity that is produced by the contract producer at
14    the contract producer's contract  operation  according  to  a
15    production contract.
16        "Processor"  means  a  person  engaged in the business of
17    manufacturing   goods   from   commodities,   including    by
18    slaughtering or processing livestock, processing raw milk, or
19    processing crops.
20        "Produce" means to do any of the following:
21             (1)  Provide  feed  or services relating to the care
22        and feeding of  livestock.  If  the  livestock  is  dairy
23        cattle,  then "produce" includes milking the dairy cattle
24        and storing raw milk.
25             (2)  Provide for planting, raising, harvesting,  and
26        storing a crop. "Produce" includes preparing the soil for
27        planting  and  nurturing  the  crop by the application of
28        fertilizers  or  soil   conditioners,   including   those
29        substances regulated under the Illinois Fertilizer Act of
30        1961  or pesticides as defined in paragraph 29 of Section
31        4 of the Illinois Pesticide Act.
32        "Producer" means  a  person  who  produces  a  commodity,
33    including but not limited to, a contract producer. "Producer"
34    does   not  include  a  commercial  fertilizer  or  pesticide
 
                            -4-                LRB9202743TAtm
 1    applicator, a feed supplier, or a veterinarian,  when  acting
 2    in that capacity.
 3        "Production  contract" means an oral or written agreement
 4    that provides for  the  production  of  a  commodity  or  the
 5    provision  of  management services relating to the production
 6    of a commodity by a contract producer. A production  contract
 7    is  executed  when  it  is signed or orally agreed to by each
 8    party to the contract or by a person authorized to act on the
 9    party's behalf.

10        Section 10.  Production contracts governed by  this  Act.
11    This  Act  applies to production contracts that relate to the
12    production of a commodity owned by an active  contractor  and
13    produced  by  a  contract producer at the contract producer's
14    contract operation, if one of the following applies:
15             (1)  Contract with active contractor. The production
16        contract is  executed  by  an  active  contractor  and  a
17        contract producer for the production of the commodity.
18             (2)  Contract  with  active  contractor  and passive
19        contractor. The production contract  is  executed  by  an
20        active  contractor  and  a  passive  contractor  for  the
21        provision of management services to the contract producer
22        in the production of the commodity.
23             (3)  Contract    with    passive   contractor.   The
24        production contract is executed by a  passive  contractor
25        and a contract producer, if all of the following apply:
26                  (A)  The   contract   provides  for  management
27             services furnished by the passive contractor to  the
28             contract   producer   in   the   production  of  the
29             commodity.
30                  (B)  The passive contractor has  a  contractual
31             relationship  with  the  active contractor involving
32             the production of the commodity.
 
                            -5-                LRB9202743TAtm
 1        Section  15.  Implied  obligation  of  good   faith.   An
 2    agricultural contract imposes an obligation of good faith, as
 3    defined  in  section 1-201 of the Uniform Commercial Code, on
 4    all parties with respect to the performance  and  enforcement
 5    of the agricultural contract.

 6        Section 20.  Disclosure of risks and readability.
 7        (a)  Disclosure  statement. An agricultural contract must
 8    be  accompanied  by  a  clear  written  disclosure  statement
 9    setting forth the nature of the material risks faced  by  the
10    producer  if  the  producer  enters  into  the  contract. The
11    statement  must  meet   the   readability   requirements   of
12    subsection (b). The statement may be in the form of a written
13    statement  or  checklist  and may be developed in cooperation
14    with producers or producer organizations. The statement shall
15    disclose the following:
16             (1)  in  the  case  of  production  contracts,   the
17        producer's right to review as provided in Section 5;
18             (2)  contract duration;
19             (3)  contract termination;
20             (4)  renegotiation standards;
21             (5)  responsibility for environmental damage;
22             (6)  factors to be used in determining payment;
23             (7)  responsibility for obtaining and complying with
24        local, state, and federal permits;
25             (8)  any  other  contract  term that the Director of
26        Agriculture  determines is appropriate for disclosure.
27        (b)  Readability of contracts.
28             (1)  Definition.  As  used   in   this   subsection,
29        "legible  type"  means  a  typeface  at least as large as
30        10-point modern type, one-point leaded.
31             (2)  Cover  sheet  requirements.   An   agricultural
32        contract  entered  into,  amended,  or  renewed after the
33        effective date of this Act  must  contain  as  the  first
 
                            -6-                LRB9202743TAtm
 1        page,  or first page of text if it is preceded by a title
 2        page or pages, a cover sheet as provided in this Section.
 3        The cover sheet or sheets must comply with paragraph  (3)
 4        and must contain all of the following:
 5                  (A)  A  brief  statement that the document is a
 6             legal contract between the parties.
 7                  (B)  The   statement   "READ   YOUR    CONTRACT
 8             CAREFULLY.  This  cover  sheet provides only a brief
 9             summary of your contract. This is not the  contract,
10             and  only  the  terms  of  the  actual  contract are
11             legally binding. The contract itself sets forth,  in
12             detail,  the  rights and obligations of both you and
13             the  contractor  or  processor.  IT   IS   THEREFORE
14             IMPORTANT THAT YOU READ YOUR CONTRACT CAREFULLY."
15                  (C)  The  written  disclosure of risks required
16             by subsection (a).
17                  (D)  A statement detailing, in plain  language,
18             the  producer's  right  to  review  the  contract as
19             described in section 5.
20                  (E)  An index of the major  provisions  of  the
21             contract  and  the  pages  on  which they are found,
22             including all of the following:
23                       (i)  The  names  of  all  parties  to  the
24                  contract.
25                       (ii)  The  definition  sections   of   the
26                  contract.
27                       (iii)  The       provisions      governing
28                  termination,   cancellation,    renewal,    and
29                  amendment of the contract by either party.
30                       (iv)  The  duties  or  obligations of each
31                  party.
32                       (v)  Any provisions subject to  change  in
33                  the contract.
34             (3)  Contract   format   and   plain   language.  An
 
                            -7-                LRB9202743TAtm
 1        agricultural  contract   must   be   in   legible   type,
 2        appropriately   divided  and  captioned  by  its  various
 3        sections, and written  in  clear  and  coherent  language
 4        using  words  and  grammar  that  are understandable by a
 5        person of average intelligence, education, and experience
 6        within the industry. This paragraph does not apply to the
 7        following terms in an agricultural contract:
 8                  (A)  Legally   required.   Particular    words,
 9             phrases,   provisions,   or   forms   of   agreement
10             specifically required, recommended, or endorsed by a
11             state or federal statute, rule, or regulation.
12                  (B)  Customarily  used  terms.  Technical terms
13             used to describe the services or property  that  are
14             the  subject  of  the  contract,  if  the  terms are
15             customarily used by producers in the ordinary course
16             of business  in  connection  with  the  services  or
17             property being described.
18        (c)  Review by Director of Agriculture.
19             (1)  Process  of  review.  A contractor or processor
20        may submit an agricultural contract to the  Director  for
21        review as to whether it complies with this Section. After
22        reviewing  the contract, the Director shall do one of the
23        following:
24                  (A)  Certify that the  contract  complies  with
25             this Section.
26                  (B)  Decline   to  certify  that  the  contract
27             complies with this Section and note objections.
28                  (C)  Decline to review the contract because the
29             contract's compliance with this Section  is  subject
30             to pending litigation.
31                  (D)  Decline to review the contract because the
32             contract is not subject to this Section.
33             (2)  Factors    in   determining   readability.   In
34        determining whether an  agricultural  contract  or  cover
 
                            -8-                LRB9202743TAtm
 1        sheet  is  readable within the meaning of subsection (b),
 2        the  Director  shall  consider  at  least  the  following
 3        factors:
 4                  (A)  The simplicity of the sentence structure.
 5                  (B)  The extent  to  which  commonly  used  and
 6             understood words are employed.
 7                  (C)  The  extent  to which esoteric legal terms
 8             are avoided.
 9                  (D)  The extent to which  references  to  other
10             sections   or   provisions   of   the  contract  are
11             minimized.
12                  (E)  The  Flesch  scale   analysis   or   other
13             readability score as provided by Department rule.
14                  (F)  The  extent to which clear definitions are
15             used in the text of the contract.
16                  (G)  Additional   factors   relevant   to   the
17             readability or understandability of the contract.
18             (3)  Process not reviewable. Actions of the Director
19        under this  subsection  are  not    subject  to  judicial
20        review.
21             (4)  Limited  effect  of  certification.  A contract
22        certified under this subsection is deemed to comply  with
23        subsections  (a)  and  (b).  Certification  of a contract
24        under this subsection does not constitute an approval  of
25        the  contract's legality or legal effect. If the Director
26        certifies a contract or fails to respond within  30  days
27        after  receipt  of  the  contract, then the contractor or
28        processor will have complied with these  subsections  (a)
29        and  (b)  and the remedies stated in paragraph (6) and in
30        Section 60 are not available.
31             (5)  Review  not  required.  Failure  to  submit   a
32        contract to the Director for review under this subsection
33        does not show a lack of good faith or raise a presumption
34        that the contract violates this Section.
 
                            -9-                LRB9202743TAtm
 1             (6)  Reformation by court.
 2                  (A)  Change  terms. In addition to the remedies
 3             provided  in  Section  60,  a  court  reviewing   an
 4             agricultural  contract  may  change the terms of the
 5             contract or limit a provision  to  avoid  an  unfair
 6             result if the court finds all of the following:
 7                       (i)  A  material provision of the contract
 8                  violates subsection (a) or (b).
 9                       (ii)  The violation caused the producer to
10                  be substantially  confused  about  any  of  the
11                  rights,   obligations,   or   remedies  of  the
12                  contract.
13                       (iii)  The  violation  has  caused  or  is
14                  likely to  cause  financial  detriment  to  the
15                  producer.
16                  (B)  Avoid  unjust  enrichment.  If  the  court
17             reforms  or  limits  a  provision of an agricultural
18             contract, the court shall also make orders necessary
19             to avoid unjust enrichment.  Bringing  a  claim  for
20             relief  under  this  paragraph  does  not  entitle a
21             producer to withhold  performance  of  an  otherwise
22             valid  contractual  obligation.  No  relief  may  be
23             granted  under  this  paragraph  unless the claim is
24             brought before the obligations of the contract  have
25             been fully performed.
26             (7)  Limits on remedies.
27                  (A)  Penalties.  In a proceeding in which civil
28             penalties are claimed from a party for  a  violation
29             of  this  Section, it is a defense to the claim that
30             the party made a good faith and reasonable effort to
31             comply.
32                  (B)  Attorneys' Fees.  Notwithstanding  Section
33             60, a party who has made a good faith and reasonable
34             effort  to  comply  with  this  Section  may  not be
 
                            -10-               LRB9202743TAtm
 1             assessed attorney's fees or costs  of  investigation
 2             in an action for violating this Section.
 3             (8)  Limits  on  producer actions. Violation of this
 4        Section is not a  defense  to  a  claim  arising  from  a
 5        producer's breach of an agricultural contract. A producer
 6        may  recover actual damages caused by a violation of this
 7        Section only if the violation caused the producer to  not
 8        understand  the  rights,  obligations, or remedies of the
 9        contract.
10             (9)  Statute  of  limitations.  A  claim   that   an
11        agricultural  contract  violates  this  Section  must  be
12        raised  within  6  years  after  the date the contract is
13        executed by the producer.

14        Section 25. Contract producer's 3-day right to review.  A
15    contract producer may cancel a production contract by mailing
16    a  written  cancellation  notice  to  the contractor within 3
17    business days after the contract is  executed,  or  before  a
18    later  cancellation deadline if a later deadline is specified
19    in the contract. The contract producer's right to cancel, the
20    method by which the contract producer  may  cancel,  and  the
21    deadline  for  canceling  the  production  contract  shall be
22    clearly disclosed in every production contract.

23        Section 30. Confidentiality provisions prohibited.
24        (a)  Prohibition. A contractor or processor shall not, on
25    or after the effective date of this Act, enforce a  provision
26    in  an  agricultural  contract if the provision provides that
27    information  contained  in  the  agricultural   contract   is
28    confidential.
29        (b)  Confidentiality provisions void. A provision that is
30    part  of  an  agricultural  contract is void if the provision
31    states  that  information  contained  in   the   agricultural
32    contract  is  confidential.  The confidentiality provision is
 
                            -11-               LRB9202743TAtm
 1    void whether the  confidentiality  provision  is  express  or
 2    implied;  oral or written; required or conditional; contained
 3    in the agricultural contract, another agricultural  contract,
 4    or  in a related document, policy, or agreement. This Section
 5    does not affect other provisions of an agricultural  contract
 6    or a related document, policy, or agreement that can be given
 7    effect  without  the  voided provision. This Section does not
 8    require a  party  to  an  agricultural  contract  to  divulge
 9    information in the agricultural contract to another person.

10        Section 35. Production contract lien.
11        (a)  Applicability  of  Section. A lien established under
12    this Section depends  upon  the  execution  of  a  production
13    contract  that  provides for producing a commodity owned by a
14    contractor by a contract producer at the contract  producer's
15    contract operation.
16        (b)  Establishment of lien; priority. A contract producer
17    who  is a party to a production contract shall have a lien as
18    provided in this Section. The amount of the lien shall be the
19    amount owed to the contract producer pursuant to the terms of
20    the production contract, which may be enforced as provided in
21    subsection (f).
22        (c)  Livestock and raw milk. If the  production  contract
23    is for the production of livestock or raw milk, the following
24    provisions shall apply.
25             (1)  Livestock.  For livestock, the lien shall apply
26        to all of the following:
27                  (A)  If  the   livestock   is   not   sold   or
28             slaughtered  by the contractor, the lien shall be on
29             the livestock.
30                  (B)  If  the   livestock   is   sold   by   the
31             contractor,  the lien shall be on cash proceeds from
32             the sale. For purposes of  this  subparagraph,  cash
33             held  by  the  contractor shall be deemed to be cash
 
                            -12-               LRB9202743TAtm
 1             proceeds from the sale regardless of whether  it  is
 2             identifiable cash proceeds.
 3                  (C)  If  the  livestock  is  slaughtered by the
 4             contractor, the lien shall be on any property of the
 5             contractor  that  may  be  subject  to  a   security
 6             interest as provided in Section 9-102 of the Uniform
 7             Commercial Code.
 8             (2)  Raw milk. For raw milk, the lien shall apply to
 9        all of the following:
10                  (A)  Milk not sold. If the raw milk is not sold
11             or processed by the contractor, the lien shall be on
12             the raw milk.
13                  (B)  Milk  is  sold. If the raw milk is sold by
14             the contractor, the lien shall be on  cash  proceeds
15             from  the  sale.  For purposes of this subparagraph,
16             cash held by the contractor shall be  deemed  to  be
17             cash proceeds from the sale regardless of whether it
18             is identifiable cash proceeds.
19                  (C)  Milk   processed.   If  the  raw  milk  is
20             processed by the contractor, the lien  shall  be  on
21             any  property  of the contractor that may be subject
22             to a security interest as provided in Section  9-102
23             of the Uniform Commercial Code.
24             (3)  Duration  of lien. The lien on livestock or raw
25        milk is created at the time the livestock arrives at  the
26        contract  livestock  facility  and continues for one year
27        after the livestock is no longer under the  authority  of
28        the  contract producer. For the purposes of this Section,
29        livestock  is  no  longer  under  the  authority  of  the
30        contract producer when the livestock leaves the  contract
31        livestock facility.
32        (d)  Crops.   If  the  production  contract  is  for  the
33    production of crops, the following provisions shall apply.
34             (1)  Crop not sold. If  the  crop  is  not  sold  or
 
                            -13-               LRB9202743TAtm
 1        processed  by  the  contractor,  the lien shall be on the
 2        crop.
 3             (2)  Crop  sold.  If  the  crop  is  sold   by   the
 4        contractor,  the  lien shall be on cash proceeds from the
 5        sale. For purposes of this subparagraph, cash held by the
 6        contractor shall be deemed to be cash proceeds  from  the
 7        sale  regardless  of  whether  it  is  identifiable  cash
 8        proceeds.
 9             (3)  Crop processed. If the crop is processed by the
10        contractor,  the  lien  shall  be  on any property of the
11        contractor that may be subject to a security interest  as
12        provided in Section 9-102 of the Uniform Commercial Code.
13             (4)  Duration of lien. The lien on a crop is created
14        at  the  time  the  crop is planted and continues for one
15        year after the crop is no longer under the  authority  of
16        the  contract  producer.  For purposes of this Section, a
17        crop is no longer under the  authority  of  the  contract
18        producer when the crop or a warehouse receipt issued by a
19        warehouse  operator  licensed  under  the  Grain Code for
20        grain from the crop is no longer  under  the  custody  or
21        control of the contract producer.
22        (e)  Preserving the lien; filing requirements.
23             (1)  Filing  lien  statement. In order to preserve a
24        lien  created  pursuant  to  this  Section,  a   contract
25        producer  must  file  in  the  office of the Secretary of
26        State a lien  statement  on  a  form  prescribed  by  the
27        Secretary  of  State. If the lien arises out of producing
28        livestock or raw milk, the contract  producer  must  file
29        the  lien within 45 days after the day that the livestock
30        first arrives at the contract livestock facility. If  the
31        lien  arises  out  of  producing  a  crop,  the  contract
32        producer  must file the lien within 45 days after the day
33        that the crop is first planted. The  Secretary  of  State
34        shall  charge  a  fee of not more than $10 for filing the
 
                            -14-               LRB9202743TAtm
 1        statement. The Secretary of State may adopt rules for the
 2        electronic filing of the statements.
 3             (2)  Contents of lien statement. The statement  must
 4        include all of the following:
 5                  (A)  An estimate of the amount owed pursuant to
 6             the production contract.
 7                  (B)  The date when the livestock arrives at the
 8             contract  livestock  facility  or  the date when the
 9             crop was planted.
10                  (C)  The estimated duration of the period  when
11             the  commodity  will  be  under the authority of the
12             contract producer.
13                  (D)  The name of the party  to  the  production
14             contract whose commodity is produced pursuant to the
15             production contract.
16                  (E)  The  description  of  the  location of the
17             contract operation, by county and township.
18                  (F)  The printed  name  and  signature  of  the
19             person filing the form.
20             (3)  Priority  of  Lien. Except for moneys owed to a
21        veterinarian for services rendered to a person subject to
22        this  Act,  a  lien  created  under  this  Section  until
23        preserved and a lien preserved  under  this  Section  are
24        superior  to  and  shall have priority over a conflicting
25        lien or security interest in the commodity,  including  a
26        lien or security interest that was perfected prior to the
27        creation of the lien under this Section.
28        (f)  Enforcement. Before a commodity leaves the authority
29    of  the  contract  producer  as  provided  in subsections (b)
30    through (d), the  contract  producer  may  foreclose  a  lien
31    created  in  those subsections in the manner provided for the
32    foreclosure of secured transactions in Sections 9-504, 9-506,
33    and 9-507 of the Uniform Commercial Code. After the commodity
34    is no longer under the authority of  the  contract  producer,
 
                            -15-               LRB9202743TAtm
 1    the  contract  producer  may  enforce  the lien in the manner
 2    provided in Article 9, Part  5,  of  the  Uniform  Commercial
 3    Code.

 4        Section  40.  Production  contracts  involving investment
 5    requirements.
 6        (a)  Applicability.  This  Section  applies  only  to   a
 7    production  contract  executed  by  a contract producer and a
 8    contractor,  if  the  contract  producer  must  make  capital
 9    investments of  $100,000  or  more  according  to  investment
10    requirements  provided  in  all production contracts in which
11    the contract producer and the  contractor  are  parties.  The
12    value  of  the  capital investments shall be deemed to be the
13    total  dollar  amount  spent  by  the  contract  producer  in
14    satisfying the investment requirements,  if  that  amount  is
15    ascertainable.
16        (b)  Restrictions  on  contract  termination.  Except  as
17    provided in subsection (d), a contractor shall not terminate,
18    cancel,  or  fail  to  renew  a production contract until the
19    contractor has done the following:
20             (1)  Notice.  The  contractor   has   provided   the
21        contract  producer  written  notice  of  the intention to
22        terminate, cancel, or not renew at least 90  days  before
23        the  effective  date of the termination, cancellation, or
24        nonrenewal.
25             (2)  Damages.  The  contract   producer   has   been
26        reimbursed  for  damages incurred due to the termination,
27        cancellation, or failure to renew. Damages shall be based
28        on  the  value  of  the  remaining  useful  life  of  the
29        structures, machinery or equipment involved.
30        (c)  Breach  of  investment   requirements.   Except   as
31    provided in subsection (d), if a contract producer materially
32    breaches  a  production  contract,  including  the investment
33    requirements of a production contract, a contractor  may  not
 
                            -16-               LRB9202743TAtm
 1    terminate,  cancel,  or fail to renew the production contract
 2    until the following have occurred:
 3             (1)  Notice. The contractor has provided  a  written
 4        notice  of  termination,  cancellation,  or nonrenewal at
 5        least  45  days  before  the  effective   date   of   the
 6        termination, cancellation, or nonrenewal. The notice must
 7        provide  a  list  of  complaints  alleging causes for the
 8        breach.
 9             (2)  Failure to remedy. The contract producer  fails
10        to remedy each cause of the breach as alleged in the list
11        of  complaints  provided  in  the  notice  within 30 days
12        following receipt of the notice. An effort by a  contract
13        producer to remedy a cause of an alleged breach shall not
14        be construed as an admission of a breach in a civil cause
15        of action.
16        (d)  Exceptions.  A  contractor may terminate, cancel, or
17    fail to renew a production contract without notice or  remedy
18    as  required  in subsections (b) and (c) if the basis for the
19    termination,  cancellation,  or  nonrenewal  is  any  of  the
20    following:
21             (1)  Abandonment. A  voluntary  abandonment  of  the
22        contractual  relationship  by  the  contract  producer. A
23        complete failure of  a  contract  producer's  performance
24        under  a  production  contract  shall  be  deemed  to  be
25        abandonment.
26             (2)  Fraud  conviction. The conviction of a contract
27        producer of  an  offense  of  fraud  or  theft  committed
28        against the contractor.
29        (e)  Penalty.  If  a  contractor  terminates, cancels, or
30    fails to renew a production contract other than  provided  in
31    this  Section, the contractor shall pay the contract producer
32    the value of the remaining useful  life  of  the  structures,
33    machinery, or equipment involved.
 
                            -17-               LRB9202743TAtm
 1        Section 45. Unfair Practices.
 2        (a)  Definitions. As used in this Section:
 3             (1)  "Contract   input"  means  a  commodity  or  an
 4        organic or synthetic substance or compound that  is  used
 5        to  produce a commodity, including but not limited to any
 6        of the following:
 7                  (A)  Livestock or plants.
 8                  (B)  Agricultural seeds.
 9                  (C)  Semen or eggs for breeding livestock
10                  (D)  A fertilizer or pesticide.
11             (2)  "Producer right" means  one  of  the  following
12        legal rights and protections:
13                  (A)  Right  to join association. The right of a
14             producer to join or belong to, or  to  refrain  from
15             joining   or   belonging   to,   an  association  of
16             producers.
17                  (B)  Right to contract. The right of a producer
18             to enter into a membership  agreement  or  marketing
19             contract   with   an  association  of  producers,  a
20             processor, or another producer and the right of  the
21             producer to exercise contractual rights under such a
22             membership agreement or marketing contract.
23                  (C)  Right  to be a whistleblower. The right of
24             a  producer  to  lawfully  provide   statements   or
25             information   (including   to   the   United  States
26             Secretary of Agriculture or  to  a  law  enforcement
27             agency)   regarding   alleged  improper  actions  or
28             violations of law by a contractor or processor. This
29             right does not include the right to make  statements
30             or   provide   information   if  the  statements  or
31             information  are  determined  to  be   libelous   or
32             slanderous.
33                  (D)  Right  to  use contract producer lien. The
34             right of a producer to file, continue, terminate, or
 
                            -18-               LRB9202743TAtm
 1             enforce a lien under Section 35.
 2                  (E)  Right to review production contracts.  The
 3             right  of a contract producer to utilize protections
 4             to review production contracts under Section 25.
 5                  (F)  Right to disclose contractual  terms.  The
 6             right  of  a  producer  to  disclose  the  terms  of
 7             agricultural contracts under Section 30.
 8                  (G)  Right  to  exercise other protections. The
 9             right of a producer  to  enforce  other  protections
10             afforded by this Act or other laws or regulations.
11        (b)  Unfair  practices.  It  shall  be  unlawful  for any
12    contractor or processor to knowingly  engage  or  permit  any
13    employee  or  agent  to  engage in the following practices in
14    connection with agricultural contracts:
15             (1)  Retaliation.  To  take   actions   to   coerce,
16        intimidate,    disadvantage,    retaliate   against,   or
17        discriminate against any producer  because  the  producer
18        exercises,  or  attempts to exercise, any producer right,
19        including actions affecting the following:
20                  (A)  The execution, termination, extension,  or
21             renewal of an agricultural contract.
22                  (B)  The  treatment  of  a  producer, which may
23             include  providing  discriminatory  or  preferential
24             terms in an agricultural  contract  or  interpreting
25             terms  of  an  existing  agricultural  contract in a
26             discriminatory or preferential manner. The terms may
27             relate to  the  price  paid  for  a  commodity;  the
28             quality  or the quantity of a commodity demanded; or
29             financing, including investment requirements.
30                  (C)  The grant of a reward or imposition  of  a
31             penalty,  including  the  denial  of  a  reward. The
32             reward or penalty may be in any form, including  but
33             not  limited  to,  financial  rewards  or penalties.
34             Financial rewards or penalties may relate to  loans,
 
                            -19-               LRB9202743TAtm
 1             bonuses, or inducements.
 2                  (D)  Alter  the  quality, quantity, or delivery
 3             times of contract inputs provided to the producer.
 4             (2)  False information. To provide false information
 5        to the producer,  which  may  include  false  information
 6        relating to any of the following:
 7                  (A)  A   producer   with   whom   the  producer
 8             associates or an  association  of  producers  or  an
 9             agricultural organization with which the producer is
10             affiliated,  including  but  not  limited to (i) the
11             character of the producer or (ii) the  condition  of
12             the finances or the management of the association of
13             producers or agricultural organization.
14                  (B)  Producer  rights  provided  by this Act or
15             other provisions of law.
16             (3)  Compensation information. To refuse to  provide
17        to  a  contract  producer  upon  request  the statistical
18        information and data used to determine compensation  paid
19        to  the  contract  producer  under a production contract,
20        including, but not limited  to,  feed  conversion  rates,
21        feed analyses, origination and breeder history.
22             (4)  Observation  of  weighing. To refuse to allow a
23        contract producer or the contract  producer's  designated
24        representative  to  observe, by actual observation at the
25        time of  weighing,  the  weights  and  measures  used  to
26        determine  the  contract  producer's compensation under a
27        production contract.
28             (5)  "Tournament"   compensation.   To    use    the
29        performance  of  any other contract producer to determine
30        the  compensation  of  a  contract   producer   under   a
31        production  contract  or as the basis of the termination,
32        cancellation, or renewal of a production contract.
33             (6)  Additional capital investments.  To  require  a
34        contract  producer  to  make  new  or  additional capital
 
                            -20-               LRB9202743TAtm
 1        investments in connection with, or to  retain,  continue,
 2        or  renew,  a  production  contract  which are beyond the
 3        investment requirements of such production  contract.  It
 4        shall  not  be  a violation of this Section if the new or
 5        additional capital investments are partially paid for  by
 6        the  contractor,  or  offset  by  other  compensation  or
 7        modifications to contract terms, in a manner the contract
 8        producer  agrees to in writing as constituting acceptable
 9        and  satisfactory  consideration  for  the  new   capital
10        investment.
11             (7)  Disclosure of risks and readability. To execute
12        an  agricultural  contract in violation of the disclosure
13        of risks and readability requirements of Section 20.
14             (8)  Confidentiality  provisions.  To   execute   an
15        agricultural  contract  which  includes a confidentiality
16        provision in violation of Section 30.
17             (9)  Mediation    provisions.    To    execute    an
18        agricultural contract without a  mediation  provision  as
19        required under Section 60.
20             (10)  Waivers.  To  execute an agricultural contract
21        which includes a waiver of  any  producer  right  or  any
22        obligation of a contractor or processor established under
23        this Act.
24             (11)  Choice  of  law.  To  execute  an agricultural
25        contract requiring the application of the law of  another
26        state instead of this Act.

27        Section  50.  Waivers  unenforceable. Any provision of an
28    agricultural contract that waives  a  producer  right  or  an
29    obligation  of  a contractor or processor established by this
30    Act is void and unenforceable. This Section does  not  affect
31    other  provisions  of  an agricultural contract, including an
32    agricultural  contract  or  related  document,   policy,   or
33    agreement  that  can  be  given  effect  without  the  voided
 
                            -21-               LRB9202743TAtm
 1    provision.

 2        Section 55. Choice of law. Any condition, stipulation, or
 3    provision  requiring  the  application  of the law of another
 4    state instead of this Act is void and unenforceable.

 5        Section 60.  Mediation.  An  agricultural  contract  must
 6    contain   language   providing  for  resolution  of  disputes
 7    concerning the contract by mediation. If there is  a  dispute
 8    involving  an  agricultural contract, either party may make a
 9    written request for mediation services as  specified  in  the
10    contract, to facilitate resolution of the dispute.

11        Section 65. Penalties and enforcement.
12        (a)  Civil   penalties.   A   contractor   or   processor
13    committing  an  unfair  practice  under  Section  45 shall be
14    subject to a civil penalty of up to $1000.
15        (b)  Criminal  penalties.  A  contractor   or   processor
16    committing  an  unfair  practice  under  Section  45 shall be
17    guilty of a Class C misdemeanor.
18        (c)  Private cause of  action.  A  producer  who  suffers
19    damages because of a contractor's or processor's violation of
20    this  Act  may  bring  a  private  civil  action  against the
21    contractor or processor  and  obtain  appropriate  legal  and
22    equitable relief, including damages.
23             (1)  Attorneys  fees.  In a civil action against the
24        contractor  or  processor,  the  court  shall  award  the
25        producer who is the prevailing party reasonable  attorney
26        fees and other litigation expenses.
27             (2)  Injunctive   relief.   In   order   to   obtain
28        injunctive relief, the producer is not required to post a
29        bond,  prove the absence of an adequate remedy at law, or
30        show the existence of special circumstances,  unless  the
31        court  for  good  cause  otherwise  orders. The court may
 
                            -22-               LRB9202743TAtm
 1        order any form of prohibitory or mandatory relief that is
 2        appropriate under principles of equity, including but not
 3        limited to issuing a temporary or  permanent  restraining
 4        order.
 5        (d)  Enforcement   by   Attorney  General.  The  Attorney
 6    General's office is  the  agency  primarily  responsible  for
 7    enforcing  this Act. In enforcing the provisions of this Act,
 8    the Attorney General may do all of the following:
 9             (1)  Injunctions. Apply to the circuit court for  an
10        injunction to do any of the following:
11                  (A)  Restrain  a  contractor  or processor from
12             engaging in conduct or  practices  in  violation  of
13             this Act.
14                  (B)  Require   a  contractor  or  processor  to
15             comply with a provision of this Act.
16             (2)  Subpoenas. Apply to the circuit court  for  the
17        issuance of a subpoena to obtain an agricultural contract
18        for purposes of enforcing this Act.
19             (3)  Penalties. Bring an action in the circuit court
20        to enforce penalties provided in subsections (a) and (b).

21        Section 70. Rulemaking. The Director must adopt any rules
22    necessary to implement this Act.

23        Section 75. Applicability of Act.
24        (a).  General rule. Except as provided in subsection (b),
25    this  Act  applies  to  agricultural contracts in force on or
26    after the effective date of this Act, regardless of the  date
27    the agricultural contract is executed.
28        (b).  Exceptions.  Section  20 (relating to disclosure of
29    risks and readability),  Section  25  (relating  to  contract
30    producer's  three  day right to review), Section 40 (relating
31    to production contracts involving  investment  requirements),
32    Section   45(b)(5)   (relating  to  the  use  of  "tournament
 
                            -23-               LRB9202743TAtm
 1    compensation"), Section 55 (relating to choice of  law),  and
 2    Section   60   (relating   to   mediation)   shall  apply  to
 3    agricultural  contracts  executed  or  substantively  amended
 4    after the effective date of this Act.

 5        Section 99.  Effective date.  This Act  takes  effect  on
 6    July 1, 2001.

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