State of Illinois
92nd General Assembly
Legislation

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92_SB1573eng

 
SB1573 Engrossed                               LRB9212512ACcd

 1        AN ACT concerning agriculture.

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

 4        Section  5.   The  Grain  Code  is  amended  by  changing
 5    Section 1-10 as follows:

 6        (240 ILCS 40/1-10)
 7        Sec. 1-10.  Definitions.  As used in this Act:
 8        "Board"  means  the  governing body of the Illinois Grain
 9    Insurance Corporation.
10        "Certificate" means a document, other than a the license,
11    issued by the Department that certifies that a grain dealer's
12    license has been issued and is in effect.
13        "Claimant" means:
14        (a)  a person, including, without limitation, a lender:
15             (1)  who possesses warehouse receipts issued from an
16        Illinois location covering grain owned  or  stored  by  a
17        failed warehouseman; or
18             (2)  who  has  other  written  evidence of a storage
19        obligation  of  a  failed  warehouseman  issued  from  an
20        Illinois location in favor of the holder, including,  but
21        not  limited  to,  scale  tickets, settlement sheets, and
22        ledger cards; or
23             (3)  who has loaned money to a warehouseman and  was
24        to  receive  a  warehouse receipt issued from an Illinois
25        location as  security  for  that  loan,  who  surrendered
26        warehouse receipts as part of a grain sale at an Illinois
27        location,  or who delivered grain out of storage with the
28        warehouseman as part of  a  grain  sale  at  an  Illinois
29        location; and
30                  (i)  the  grain  dealer  or warehouseman failed
31             within  21  days  after  the  loan  of  money,   the
 
SB1573 Engrossed            -2-                LRB9212512ACcd
 1             surrender  of warehouse receipts, or the delivery of
 2             grain, as the case may be, and no warehouse  receipt
 3             was  issued  or  payment in full was not made on the
 4             grain sale, as the case may be; or
 5                  (ii)  written notice was given by the person to
 6             the Department within 21  days  after  the  loan  of
 7             money,  the  surrender of warehouse receipts, or the
 8             delivery of grain, as the case may be, stating  that
 9             no  warehouse  receipt was issued or payment in full
10             made on the grain sale, as the case may be; or
11        (b)  a producer  not  included  in  item  (a)(3)  in  the
12    definition  of  "Claimant" who possesses evidence of the sale
13    at an Illinois location of grain delivered to a failed  grain
14    dealer and who was not paid in full.
15        "Class  I  warehouseman"  means  a  warehouseman  who  is
16    authorized  to  issue negotiable and non-negotiable warehouse
17    receipts.
18        "Class II  warehouseman"  means  a  warehouseman  who  is
19    authorized to issue only non-negotiable warehouse receipts.
20        "Code" means the Grain Code.
21        "Collateral" means:
22        (a)  irrevocable letters of credit;
23        (b)  certificates of deposit;
24        (c)  cash or a cash equivalent; or
25        (d)  any  other  property acceptable to the Department to
26    the extent there exists equity in  that  property.   For  the
27    purposes  of  this  item (d), "equity" is the amount by which
28    the fair market value of the property exceeds the amount owed
29    to a creditor who has  a  valid,  prior,  perfected  security
30    interest in or other lien on the property.
31        "Corporation"   means   the   Illinois   Grain  Insurance
32    Corporation.
33        "Daily  position  record"   means   a   grain   inventory
34    accountability  record  maintained  on  a  daily  basis  that
 
SB1573 Engrossed            -3-                LRB9212512ACcd
 1    includes   an   accurate   reflection  of  changes  in  grain
 2    inventory, storage obligations,  company-owned  inventory  by
 3    commodity,  and  other  information  that  is required by the
 4    Department.
 5        "Daily grain transaction report" means a  record  of  the
 6    daily  transactions  of  a grain dealer showing the amount of
 7    all grain received and shipped during each day and the amount
 8    on hand at the end of each day.
 9        "Date of delivery of grain" means:
10        (a)  the date grain is delivered to a  grain  dealer  for
11    the purpose of sale;
12        (b)  the  date  grain  is delivered to a warehouseman for
13    the purpose of storage; or
14        (c)  in  reference   to   grain   in   storage   with   a
15    warehouseman,  the  date  a  warehouse  receipt  representing
16    stored  grain  is  delivered  to  the issuer of the warehouse
17    receipt for the purpose of selling the stored grain or, if no
18    warehouse receipt was issued:
19             (1)  the date the purchase price for stored grain is
20        established; or
21             (2)  if sold by price later contract,  the  date  of
22        the price later contract.
23        "Department"    means    the   Illinois   Department   of
24    Agriculture.
25        "Depositor" means a person who has evidence of a  storage
26    obligation from a warehouseman.
27        "Director", unless otherwise provided, means the Illinois
28    Director of Agriculture, or the Director's designee.
29        "Emergency  storage"  means space measured in bushels and
30    used for a period of time not to exceed 3 months for  storage
31    of grain as a consequence of an emergency situation.
32        "Equity assets" means:
33        (a)  The equity in any property of the licensee or failed
34    licensee, other than grain assets.  For purposes of this item
 
SB1573 Engrossed            -4-                LRB9212512ACcd
 1    (a):
 2             (1)  "equity" is the amount by which the fair market
 3        value  of  the  property  exceeds  the  amount  owed to a
 4        creditor who has a valid security interest  in  or  other
 5        lien  on  the property that was perfected before the date
 6        of failure of the licensee;
 7             (2)  a creditor  is  not  deemed  to  have  a  valid
 8        security  interest  or  other lien on property if (i) the
 9        property can be directly traced as being from the sale of
10        grain by  the  licensee  or  failed  licensee;  (ii)  the
11        security  interest  was taken as additional collateral on
12        account of an antecedent debt owed to the  creditor;  and
13        (iii)  the  security interest or other lien was perfected
14        (A) on or within 90 days before the date  of  failure  of
15        the  licensee  or  (B)  when  the  creditor  is a related
16        person, within one year of the date  of  failure  of  the
17        licensee.
18        "Failure" means, in reference to a licensee:
19        (a)  a  formal declaration of insolvency;
20        (b)  a revocation of a license;
21        (c)  a  failure  to  apply  for  license renewal, leaving
22    indebtedness to claimants;
23        (d)  a denial of license renewal, leaving indebtedness to
24    claimants; or
25        (e)  a  voluntary  surrender  of   a   license,   leaving
26    indebtedness to claimants.
27        "Federal  warehouseman"  means a warehouseman licensed by
28    the  United  States  government  under  the   United   States
29    Warehouse Act (7 U.S.C. 241 et seq.).
30        "Fund" means the Illinois Grain Insurance Fund.
31        "Grain"  means  corn, soybeans, wheat, oats, rye, barley,
32    grain sorghum, canola, buckwheat, flaxseed, edible  soybeans,
33    and other like agricultural commodities designated by rule.
34        "Grain assets" means:
 
SB1573 Engrossed            -5-                LRB9212512ACcd
 1        (a)  all  grain  owned and all grain stored by a licensee
 2    or failed licensee, wherever located;
 3        (b)  redeposited grain of a licensee or failed licensee;
 4        (c)  identifiable proceeds, including,  but  not  limited
 5    to,  insurance  proceeds, received by or due to a licensee or
 6    failed  licensee   resulting   from   the   sale,   exchange,
 7    destruction, loss, or theft of grain, or other disposition of
 8    grain by the licensee or failed licensee; or
 9        (d)  assets  in  hedging  or  speculative margin accounts
10    held by commodity  or  security  exchanges  on  behalf  of  a
11    licensee  or  failed licensee and any moneys due or to become
12    due to a  licensee  or  failed  licensee,  less  any  secured
13    financing  directly  associated  with those assets or moneys,
14    from any transactions on those exchanges.
15        For  purposes  of  this  Act,  storage  charges,   drying
16    charges,  price  later  contract  service  charges, and other
17    grain service charges received by or due  to  a  licensee  or
18    failed  licensee  shall not be deemed to be grain assets, nor
19    shall such charges be deemed to be proceeds from the sale  or
20    other  disposition  of  grain  by  a  licensee  or  a  failed
21    licensee,  or  to  have been directly or indirectly traceable
22    from, to have resulted from, or to have been derived in whole
23    or in part from, or otherwise related to, the sale  or  other
24    disposition of grain by the licensee or failed licensee.
25        "Grain  dealer"  means  a  person  who is licensed by the
26    Department to engage in the business  of  buying  grain  from
27    producers.
28        "Grain  Indemnity  Trust  Account"  means a trust account
29    established by the Director  under  Section  205-410  of  the
30    Department  of  Agriculture Law (20 ILCS 205/205-410) that is
31    used for the receipt and disbursement of moneys paid from the
32    Fund and proceeds from the liquidation of and collection upon
33    grain assets, equity assets, collateral, or guarantees of  or
34    relating  to  failed  licensees.   The  Grain Indemnity Trust
 
SB1573 Engrossed            -6-                LRB9212512ACcd
 1    Account shall be used to pay valid claims, authorized refunds
 2    from  the  Fund,  and  expenses   incurred   in   preserving,
 3    liquidating, and collecting upon grain assets, equity assets,
 4    collateral, and guarantees relating to failed licensees.
 5        "Guarantor" means a person who assumes all or part of the
 6    obligations of a licensee to claimants.
 7        "Guarantee"  means  a document executed by a guarantor by
 8    which the guarantor assumes all or part of the obligations of
 9    a licensee to claimants.
10        "Incidental  grain  dealer"  means  a  grain  dealer  who
11    purchases grain  only  in  connection  with  a  feed  milling
12    operation  and  whose total purchases of grain from producers
13    during the grain dealer's fiscal year do not exceed $100,000.
14        "Licensed  storage  capacity"  means  the  maximum  grain
15    storage  capacity  measured  in  bushels  approved   by   the
16    applicable licensing agency for use by a warehouseman.
17        "Licensee"  means  a  grain dealer or warehouseman who is
18    licensed by the Department and a federal warehouseman that is
19    a participant in the Fund, under subsection  (c)  of  Section
20    30-10.
21        "Official  grain  standards"  means  the  official  grade
22    designations  as  adopted  by the United States Department of
23    Agriculture under the United States Grain Standards  Act  and
24    regulations adopted under that Act (7 U.S.C. 71 et seq. and 7
25    CFR 810.201 et seq.).
26        "Permanent   storage  capacity"  means  the  capacity  of
27    permanent structures available for  storage  of  grain  on  a
28    regular and continuous basis and measured in bushels.
29        "Person"  means  any individual or entity, including, but
30    not limited to,  a  sole  proprietorship,  a  partnership,  a
31    corporation,   a   cooperative,  an  association,  a  limited
32    liability company, an estate, or a trust.
33        "Price later contract" means a written contract  for  the
34    sale  of  grain whereby any part of the purchase price may be
 
SB1573 Engrossed            -7-                LRB9212512ACcd
 1    established by the seller after delivery of the  grain  to  a
 2    grain  dealer according to a pricing formula contained in the
 3    contract.  Title to the grain passes to the grain  dealer  at
 4    the time of delivery.  The precise form and the general terms
 5    and conditions of the contract shall be established by rule.
 6        "Producer"  means  the owner, tenant, or operator of land
 7    who has an interest in  and  receives  all  or  part  of  the
 8    proceeds from the sale of the grain produced on the land.
 9        "Producer protection holding corporation" means a holding
10    corporation  to  receive, hold title to, and liquidate assets
11    of or relating to a  failed  licensee,  including  assets  in
12    reference  to  collateral  or guarantees relating to a failed
13    licensee.
14        "Related persons" means affiliates  of  a  licensee,  key
15    persons  of a licensee, owners of a licensee, and persons who
16    have control over a  licensee.   For  the  purposes  of  this
17    definition:
18             (a)  "Affiliate"  means  a  person who has direct or
19        indirect control  of  a  licensee,  is  controlled  by  a
20        licensee, or is under common control with a licensee.
21             (b)  "Key  person"  means  an officer, a director, a
22        trustee, a partner, a proprietor, a manager,  a  managing
23        agent,  or  the  spouse  of  a licensee.  An officer or a
24        director  of  an  entity  organized  or  operating  as  a
25        cooperative, however, shall not be  considered  to  be  a
26        "key person".
27             (c)  "Owner"  means  the  holder of: over 10% of the
28        total combined voting power of a corporation or over  10%
29        of the total value of shares of all classes of stock of a
30        corporation;  over  a 10% interest in a partnership; over
31        10% of the value of a trust computed actuarially; or over
32        10% of the legal or  beneficial  interest  in  any  other
33        business,  association,  endeavor,  or  entity  that is a
34        licensee.  For purposes of computing these percentages, a
 
SB1573 Engrossed            -8-                LRB9212512ACcd
 1        holder is deemed to own stock or  other  interests  in  a
 2        business  entity  whether  the  ownership  is  direct  or
 3        indirect.
 4             (d)  "Control" means the power to exercise authority
 5        over  or  direct the management or policies of a business
 6        entity.
 7             (e)  "Indirect" means an interest in a business held
 8        by the holder not through the holder's actual holdings in
 9        the business, but through the holder's holdings in  other
10        businesses.
11             (f)  Notwithstanding  any  other  provision  of this
12        Act, the term "related person" does not include a lender,
13        secured party, or other lien holder solely by  reason  of
14        the existence of the loan, security interest, or lien, or
15        solely  by  reason of the lender, secured party, or other
16        lien holder having or  exercising  any  right  or  remedy
17        provided  by  law  or  by  agreement with a licensee or a
18        failed licensee.
19        "Successor agreement"  means  an  agreement  by  which  a
20    licensee  succeeds  to  the  grain  obligations  of  a former
21    licensee.
22        "Temporary storage space" means space measured in bushels
23    and used for 6 months or less  for  storage  of  grain  on  a
24    temporary  basis  due  to  a  need  for additional storage in
25    excess of permanent storage capacity.
26        "Trust account" means the Grain Indemnity Trust Account.
27        "Valid claim" means a claim,  submitted  by  a  claimant,
28    whose  amount  and  category  have  been  determined  by  the
29    Department,  to  the extent that determination is not subject
30    to further administrative review or appeal.
31        "Warehouse" means a building, structure, or enclosure  in
32    which  grain  is  stored  for  the  public  for compensation,
33    whether grain of different owners is  commingled  or  whether
34    identity of different lots of grain is preserved.
 
SB1573 Engrossed            -9-                LRB9212512ACcd
 1        "Warehouse  receipt"  means  a receipt for the storage of
 2    grain issued by a warehouseman.
 3        "Warehouseman" means a person who is licensed:
 4             (a)  by the Department to engage in the business  of
 5        storing grain for compensation; or
 6             (b)  under  the  United  States  Warehouse  Act  who
 7        participates  in the Fund under subsection (c) of Section
 8        30-10.
 9    (Source: P.A. 91-213,  eff.  7-20-99;  91-239,  eff.  1-1-00;
10    92-16, eff. 6-28-01.)

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