State of Illinois
91st General Assembly
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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
 
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 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
 
SB678 Engrossed             -16-               LRB9105805LDmb
 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
 
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 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
 
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 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
 
SB678 Engrossed             -21-               LRB9105805LDmb
 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
 
SB678 Engrossed             -22-               LRB9105805LDmb
 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
 
SB678 Engrossed             -23-               LRB9105805LDmb
 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
 
SB678 Engrossed             -24-               LRB9105805LDmb
 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
 
SB678 Engrossed             -25-               LRB9105805LDmb
 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
 
SB678 Engrossed             -26-               LRB9105805LDmb
 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
 
SB678 Engrossed             -27-               LRB9105805LDmb
 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.
 
SB678 Engrossed             -28-               LRB9105805LDmb
 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
 
SB678 Engrossed             -32-               LRB9105805LDmb
 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.
 
SB678 Engrossed             -35-               LRB9105805LDmb
 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
 
SB678 Engrossed             -36-               LRB9105805LDmb
 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
 
SB678 Engrossed             -37-               LRB9105805LDmb
 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.
 
SB678 Engrossed             -38-               LRB9105805LDmb
 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
 
SB678 Engrossed             -39-               LRB9105805LDmb
 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
 
SB678 Engrossed             -40-               LRB9105805LDmb
 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
 
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 1        that are customary in corporations.
 2    (Source: P.A. 89-287, eff. 1-1-96.)

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