Public Act 93-0225

HB1458 Enrolled                      LRB093 03693 RCE 07393 b

    AN ACT concerning agriculture.

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

    Section   5.  The  Grain  Code  is  amended  by  changing
Sections 1-5, 1-10, 1-15, 1-20, 1-25, 5-5, 5-10, 5-15,  5-20,
5-25,  5-30,  10-5, 10-10, 10-15, 10-20, 15-15, 15-20, 15-30,
15-35, 15-40, 15-45, 20-10, 20-15, 20-20, 25-5, 25-10, 25-20,
30-5, and 30-10 and by adding Section 30-25 and Article 35 as
follows:

    (240 ILCS 40/1-5)
    Sec.  1-5.  Purpose.    The   Illinois   grain   industry
comprises  a  significant  and  vital  part  of  the  State's
economy.    The  grain  industry  can function to its fullest
competitive and profitable potential,  thus  contributing  to
the  economic  health of this State, when it operates under a
coordinated and integrated structure.  The  purpose  of  this
Code is to provide a single system of governmental regulation
of  the  Illinois  grain  industry.   It  is also the primary
purpose of this  Code  to  promote  the  State's  welfare  by
improving  the  economic stability of agriculture through the
existence of the Illinois Grain Insurance Fund  in  order  to
protect  producers  in the event of the failure of a licensed
grain dealer or  licensed  warehouseman  and  to  ensure  the
existence  of  an  adequate  resource so that persons holding
valid claims may be compensated for losses occasioned by  the
failure  of a licensed grain dealer or licensed warehouseman.
To that end, this  Code  shall  be  liberally  construed  and
liberally administered in favor of claimants.
    In  addition,  the  Illinois  grain  industry comprises a
significant and vital part of the State's economy and as such
can  function  to  its  fullest  competitive  and  profitable
potential, thus contributing to the economic health  of  this
State,  when  it  operates under a coordinated and integrated
regulatory structure. Thus, a further purpose of this Code is
to provide a single system of governmental regulation of  the
Illinois grain industry.
(Source: P.A. 89-287, eff. 1-1-96.)

    (240 ILCS 40/1-10)
    Sec. 1-10.  Definitions.  As used in this Act:
    "Board"  means  the  governing body of the Illinois Grain
Insurance Corporation.
    "Certificate" means a document, other than  the  license,
issued by the Department that certifies that a grain dealer's
license has been issued and is in effect.
    "Claimant" means:
    (a)  a person, including, without limitation, a lender:
         (1)  who possesses warehouse receipts issued from an
    Illinois  location  covering  grain  owned or stored by a
    failed warehouseman; or
         (2)  who has other written  evidence  of  a  storage
    obligation  of  a  failed  warehouseman  issued  from  an
    Illinois  location in favor of the holder, including, but
    not limited to, scale  tickets,  settlement  sheets,  and
    ledger cards; or
         (3)  who  has loaned money to a warehouseman and was
    to receive a warehouse receipt issued  from  an  Illinois
    location  as  security  for  that  loan,  who surrendered
    warehouse receipts as part of a grain sale at an Illinois
    location, or who delivered grain out of storage with  the
    warehouseman  as  part  of  a  grain  sale at an Illinois
    location; and
              (i)  the grain dealer  or  warehouseman  failed
         within   21  days  after  the  loan  of  money,  the
         surrender of warehouse receipts, or the delivery  of
         grain,  as the case may be, and no warehouse receipt
         was issued or payment in full was not  made  on  the
         grain sale, as the case may be; or
              (ii)  written notice was given by the person to
         the  Department  within  21  days  after the loan of
         money, the surrender of warehouse receipts,  or  the
         delivery  of grain, as the case may be, stating that
         no warehouse receipt was issued or payment  in  full
         made on the grain sale, as the case may be; or
    (b)  a  producer  not  included  in  item  (a)(3)  in the
definition of "Claimant" who possesses evidence of  the  sale
at  an Illinois location of grain delivered to a failed grain
dealer, or its designee in Illinois and who was not  paid  in
full.
    "Class  I  warehouseman"  means  a  warehouseman  who  is
authorized  to  issue negotiable and non-negotiable warehouse
receipts.
    "Class II  warehouseman"  means  a  warehouseman  who  is
authorized to issue only non-negotiable warehouse receipts.
    "Code" means this the Grain Code.
    "Collateral" means:
    (a)  irrevocable letters of credit;
    (b)  certificates of deposit;
    (c)  cash or a cash equivalent; or
    (d)  any  other  property acceptable to the Department to
the extent there exists equity in  that  property.   For  the
purposes  of  this  item (d), "equity" is the amount by which
the fair market value of the property exceeds the amount owed
to a creditor who has  a  valid,  prior,  perfected  security
interest  in  or  other  valid,  prior, perfected lien on the
property.
    "Corporation"  means   the   Illinois   Grain   Insurance
Corporation.
    "Daily   position   record"   means   a  grain  inventory
accountability  record  maintained  on  a  daily  basis  that
includes  an  accurate  reflection  of   changes   in   grain
inventory,  storage  obligations,  company-owned inventory by
commodity, and other information  that  is  required  by  the
Department.
    "Daily  grain  transaction  report" means a record of the
daily transactions of a grain dealer showing  the  amount  of
all grain received and shipped during each day and the amount
on hand at the end of each day.
    "Date of delivery of grain" means:
    (a)  the  date  grain  is delivered to a grain dealer, or
its designee in Illinois, for the purpose of sale;
    (b)  the date grain is delivered to  a  warehouseman,  or
its designee in Illinois, for the purpose of storage; or
    (c)  in   reference   to   grain   in   storage   with  a
warehouseman,  the  date  a  warehouse  receipt  representing
stored grain is delivered to  the  issuer  of  the  warehouse
receipt for the purpose of selling the stored grain or, if no
warehouse receipt was issued:
         (1)  the date the purchase price for stored grain is
    established; or
         (2)  if  sold  by  price later contract, the date of
    the price later contract.
    "Department"   means   the   Illinois    Department    of
Agriculture.
    "Depositor"  means a person who has evidence of a storage
obligation from a warehouseman.
    "Director", unless otherwise provided, means the Illinois
Director of Agriculture, or the Director's designee.
    "Electronic document" means a document that is generated,
sent, received, or stored by electrical,  digital,  magnetic,
optical   electromagnetic,   or   any  other  similar  means,
including, but not limited to, electronic  data  interchange,
electronic mail, telegram, telex, or telecopy.
    "Electronic  warehouse receipt" means a warehouse receipt
that is issued or transmitted in the form  of  an  electronic
document.
    "Emergency  storage"  means space measured in bushels and
used for a period of time not to exceed 3 months for  storage
of grain as a consequence of an emergency situation.
    "Equity assets" means:
    (a)  The equity in any property of the licensee or failed
licensee, other than grain assets.  For purposes of this item
(a):
         (1)  "equity" is the amount by which the fair market
    value  of  the  property  exceeds  the  amount  owed to a
    creditor who has a valid security interest  in  or  other
    valid  lien on the property that was perfected before the
    date of failure of the licensee;
         (2)  a creditor  is  not  deemed  to  have  a  valid
    security  interest or other valid lien on property if (i)
    the property can be directly traced  as  being  from  the
    sale  of  grain  by the licensee or failed licensee; (ii)
    the security interest was taken as additional  collateral
    on  account  of  an antecedent debt owed to the creditor;
    and  (iii)  the  security  interest  or  other  lien  was
    perfected (A) on or within 90 days  before  the  date  of
    failure  of  the  licensee  or (B) when the creditor is a
    related person, within one year of the date of failure of
    the licensee.
    "Failure" means, in reference to a licensee:
    (a)  a  formal declaration of insolvency;
    (b)  a revocation of a license;
    (c)  a failure to  apply  for  license  renewal,  leaving
indebtedness to claimants;
    (d)  a denial of license renewal, leaving indebtedness to
claimants; or
    (e)  a   voluntary   surrender   of  a  license,  leaving
indebtedness to claimants.
    "Federal warehouseman" means a warehouseman  licensed  by
the   United   States  government  under  the  United  States
Warehouse Act (7 U.S.C. 241 et seq.).
    "Fund" means the Illinois Grain Insurance Fund.
    "Grain" means corn, soybeans, wheat, oats,  rye,  barley,
grain  sorghum, canola, buckwheat, flaxseed, edible soybeans,
and  other  like  agricultural  commodities   that   may   be
designated by rule.
    "Grain assets" means:
    (a)  all  grain  owned and all grain stored by a licensee
or failed licensee, wherever located,  including  redeposited
grain of a licensee or failed licensee;
    (b)  (blank)  redeposited  grain  of a licensee or failed
licensee;
    (c)  identifiable proceeds, including,  but  not  limited
to,  insurance  proceeds, received by or due to a licensee or
failed  licensee   resulting   from   the   sale,   exchange,
destruction, loss, or theft of grain, or other disposition of
grain by the licensee or failed licensee; or
    (d)  assets  in  hedging  or  speculative margin accounts
held by commodity  or  security  exchanges  on  behalf  of  a
licensee  or  failed licensee and any moneys due or to become
due to a  licensee  or  failed  licensee,  less  any  secured
financing  directly  associated  with those assets or moneys,
from any transactions on those exchanges.
    For  purposes  of  this  Act,  storage  charges,   drying
charges,  price  later  contract  service  charges, and other
grain service charges received by or due  to  a  licensee  or
failed  licensee  shall not be deemed to be grain assets, nor
shall such charges be deemed to be proceeds from the sale  or
other  disposition  of  grain  by  a  licensee  or  a  failed
licensee,  or  to  have been directly or indirectly traceable
from, to have resulted from, or to have been derived in whole
or in part from, or otherwise related to, the sale  or  other
disposition of grain by the licensee or failed licensee.
    "Grain  dealer"  means  a  person  who is licensed by the
Department to engage in the business  of  buying  grain  from
producers.
    "Grain  Indemnity  Trust  Account"  means a trust account
established by the Director  under  Section  205-410  of  the
Department  of  Agriculture Law (20 ILCS 205/205-410) that is
used for the receipt and disbursement of moneys paid from the
Fund and proceeds from the liquidation of and collection upon
grain assets, equity assets, collateral, and or guarantees of
or relating to failed licensees.  The Grain  Indemnity  Trust
Account shall be used to pay valid claims, authorized refunds
from   the   Fund,   and  expenses  incurred  in  preserving,
liquidating, and collecting upon grain assets, equity assets,
collateral, and guarantees relating to failed licensees.
    "Guarantor" means a person who assumes all or part of the
obligations of a licensee to claimants.
    "Guarantee" means a document executed by a  guarantor  by
which the guarantor assumes all or part of the obligations of
a licensee to claimants.
    "Incidental  grain  dealer"  means  a  grain  dealer  who
purchases  grain  only  in  connection  with  a  feed milling
operation and whose total purchases of grain  from  producers
during the grain dealer's fiscal year do not exceed $100,000.
    "Licensed  storage  capacity"  means  the  maximum  grain
storage   capacity   measured  in  bushels  approved  by  the
applicable licensing agency for use by a warehouseman.
    "Licensee" means a grain dealer or  warehouseman  who  is
licensed by the Department and a federal warehouseman that is
a  participant  in  the Fund, under subsection (c) of Section
30-10.
    "Official  grain  standards"  means  the  official  grade
designations as adopted by the United  States  Department  of
Agriculture  under  the United States Grain Standards Act and
regulations adopted under that Act (7 U.S.C. 71 et seq. and 7
CFR 810.201 et seq.).
    "Permanent  storage  capacity"  means  the  capacity   of
permanent  structures  available  for  storage  of grain on a
regular and continuous basis, and measured in bushels.
    "Person" means any individual or entity,  including,  but
not  limited  to,  a  sole  proprietorship,  a partnership, a
corporation,  a  cooperative,  an  association,   a   limited
liability  company,  an estate, or a trust, or a governmental
agency.
    "Price later contract" means a written contract  for  the
sale  of  grain whereby any part of the purchase price may be
established by the seller after delivery of the  grain  to  a
grain  dealer according to a pricing formula contained in the
contract.  Title to the grain passes to the grain  dealer  at
the time of delivery.  The precise form and the general terms
and conditions of the contract shall be established by rule.
    "Producer"  means  the owner, tenant, or operator of land
who has an interest in  and  receives  all  or  part  of  the
proceeds from the sale of the grain produced on the land.
    "Producer protection holding corporation" means a holding
corporation  to  receive, hold title to, and liquidate assets
of or relating to a  failed  licensee,  including  assets  in
reference  to  collateral  or guarantees relating to a failed
licensee.
    "Regulatory Fund" means the fund  created  under  Article
35.
    "Related  persons"  means  affiliates  of a licensee, key
persons of a licensee, owners of a licensee, and persons  who
have  control  over  a  licensee.   For  the purposes of this
definition:
         (a)  "Affiliate" means a person who  has  direct  or
    indirect  control  of  a  licensee,  is  controlled  by a
    licensee, or is under common control with a licensee.
         (b)  "Key person" means an officer,  a  director,  a
    trustee,  a  partner, a proprietor, a manager, a managing
    agent, or the spouse of a  licensee.   An  officer  or  a
    director  of  an  entity  organized  or  operating  as  a
    cooperative,  however,  shall  not  be considered to be a
    "key person".
         (c)  "Owner" means the holder of: over  10%  of  the
    total  combined voting power of a corporation or over 10%
    of the total value of shares of all classes of stock of a
    corporation; over a 10% interest in a  partnership;  over
    10% of the value of a trust computed actuarially; or over
    10%  of  the  legal  or  beneficial interest in any other
    business, association, endeavor,  or  entity  that  is  a
    licensee.  For purposes of computing these percentages, a
    holder  is  deemed  to  own stock or other interests in a
    business  entity  whether  the  ownership  is  direct  or
    indirect.
         (d)  "Control" means the power to exercise authority
    over or direct the management or policies of  a  business
    entity.
         (e)  "Indirect" means an interest in a business held
    by the holder not through the holder's actual holdings in
    the  business,  but  through  the  holder's  holdings  in
    another business or other businesses.
         (f)  Notwithstanding  any  other  provision  of this
    Act, the term "related person" does not include a lender,
    secured party, or other lien holder solely by  reason  of
    the existence of the loan, security interest, or lien, or
    solely  by  reason of the lender, secured party, or other
    lien holder having or  exercising  any  right  or  remedy
    provided  by  law  or  by  agreement with a licensee or a
    failed licensee.
    "Reserve Fund" means a separate and discrete fund  of  up
to $2,000,000 held by the Corporation as set forth in Section
30-25.
    "Successor  agreement"  means  an  agreement  by  which a
licensee succeeds  to  the  grain  obligations  of  a  former
licensee.
    "Temporary storage space" means space measured in bushels
and  used  for  6  months  or  less for storage of grain on a
temporary basis due to  a  need  for  additional  storage  in
excess of permanent storage capacity.
    "Trust account" means the Grain Indemnity Trust Account.
    "Valid  claim"  means  a  request  for  payment under the
provisions of this Code claim, submitted by a  claimant,  the
whose  amount  and  category of which have been determined by
the Department, to  the  extent  that  determination  is  not
subject  to  further  administrative  review  or appeal. Each
grain sale transaction and each storage obligation  shall  be
considered  a  separate and discrete request for payment even
though one or more requests are contained on one  claim  form
or are filed with the Department in one document.
    "Warehouse"  means a building, structure, or enclosure in
which grain  is  stored  for  the  public  for  compensation,
whether  grain  of  different owners is commingled or whether
identity of different lots of grain is preserved.
    "Warehouse receipt" means a receipt for  the  storage  of
grain issued by a warehouseman.
    "Warehouseman" means a person who is licensed:
         (a)  by  the Department to engage in the business of
    storing grain for compensation; or
         (b)  under the United States Warehouse Act  but  who
    participates  in the Fund under subsection (c) of Section
    30-10.
(Source: P.A. 91-213,  eff.  7-20-99;  91-239,  eff.  1-1-00;
92-16, eff. 6-28-01.)
    (240 ILCS 40/1-15)
    Sec.  1-15.  Powers  and duties of Director. The Director
has all powers necessary and proper to fully and  effectively
execute  the provisions of this Code and has the general duty
to implement this Code.  The  Director's  powers  and  duties
include, but are not limited to, the following:
    (1)  The  Director may, upon application, issue or refuse
to issue licenses under  this  Code,  and  the  Director  may
extend,   renew,   reinstate,   suspend,  revoke,  or  accept
voluntary surrender of licenses under this Code.
    (2)  The Director shall examine and inspect each licensee
at least once each calendar year. The examination shall cover
all  aspects  of  the  grain  operations  of  the   licensee,
including  but  not necessarily limited to options trades and
programs and farmer marketing programs.
    The  Department  shall  perform  one  of   3   types   of
examinations of licensees.
         (A)  Basic  Examination. The basic examination shall
    be performed when the licensee's merchandising and  trade
    practices   involve  minimal  market  risk,  which  might
    include those situations in which the licensee uses  cash
    back-to-back   contracts,  traditional  hedges  with  the
    Chicago Board of Trade, and price  later  contracts.  The
    specific   components   and   guidelines   of  the  basic
    examination are to be as provided by rule, but shall at a
    minimum  include  verification  of  grain   quality   and
    quantity,    reconciliation   of   records   with   grain
    transactions, computation of current ratios, and checking
    of posting procedures for accuracy.
         (B)  Intermediate  Examination.   The   intermediate
    examination   shall  be  performed  when  the  licensee's
    merchandising and trade practices  involve  an  increased
    amount  of  risk, which might include those situations in
    which  the  licensee  uses   guaranteed   minimum   price
    contracts,  purchases  options,  or  writes options. This
    examination shall include all those things  performed  as
    part  of the basic examination. In addition, the specific
    components and guidelines of the intermediate examination
    are to be as provided by rule, but  shall  at  a  minimum
    include  verification  of  grain  quality  and  quantity,
    reconciliation  of  records  with grain transactions, and
    checking of posting procedures for accuracy.
         (C)  Advanced Examination. The advanced  examination
    shall  be performed when the licensee's merchandising and
    grain trading practices  involve  the  most  risk,  which
    might  include those situations in which the licensee has
    discretionary  trading  authority  from  producers,  uses
    premium offer  type  contracts,  or  has  contracts  with
    producers   that   cover   multiple   crop   years.  This
    examination shall include all those things  performed  as
    part  of  the  basic  examination  and  the  intermediate
    examination.  In  addition,  the  specific components and
    guidelines of the advanced examination are to be provided
    by rule, but shall at a minimum include grain market risk
    evaluation  and  appropriate  levels  thereof   for   the
    licensee and adequacy of internal controls.
    Using  these  guidelines,  the Department shall determine
the level of examination to be applied to each  licensee.  In
addition,  the Department may, in its sole discretion, engage
the services of accounting  experts,  grain  risk  management
experts,  or  both  as  part  of any intermediate or advanced
examination.  The Regulatory Fund may be used as a source  of
payment  for  the  services of accounting experts, grain risk
management experts, or both.
    The Director may inspect the premises used by a  licensee
at  any  time.  The books, accounts, records, and papers of a
licensee are at all times during business  hours  subject  to
inspection  by  the  Director.   Each  licensee  may  also be
required to make reports of its activities, obligations,  and
transactions  that  are  deemed  necessary by the Director to
determine whether the interests of producers and the  holders
of   warehouse   receipts   are   adequately   protected  and
safeguarded.  The Director may take action  or  issue  orders
that  in the opinion of the Director are necessary to prevent
fraud upon or discrimination against producers or  depositors
of  grain  by  a  licensee.  The  sole and exclusive means of
halting the warehouse and grain dealer business activities of
a licensee, however, are set forth in Section 15-40  relating
to suspension and revocation of licenses.
    (3)  The Director may, upon his or her initiative or upon
the  written  verified  complaint of any person setting forth
facts that if proved would constitute grounds for  a  refusal
to issue or renew a license or for a suspension or revocation
of  a license, investigate the actions of any person applying
for, holding, or claiming to hold a license  or  any  related
party of that person.
    (4)  The  Director  (but not the Director's designee) may
issue subpoenas and bring before the  Department  any  person
and  take testimony either at an administrative hearing or by
deposition with witness fees and mileage fees and in the same
manner as prescribed in the Code  of  Civil  Procedure.   The
Director  or  the Director's designee may administer oaths to
witnesses at any proceeding that the Department is authorized
by law to conduct.  The  Director  (but  not  the  Director's
designee)  may  issue  subpoenas  duces  tecum to command the
production of records  relating  to  a  licensee,  guarantor,
related business, related person, or related party. Subpoenas
are subject to the rules of the Department.
    (5)  Notwithstanding   other   judicial   remedies,   the
Director  may  file  a  complaint  and  apply for a temporary
restraining order  or  preliminary  or  permanent  injunction
restraining   or  enjoining  any  person  from  violating  or
continuing to violate this Code or its rules.
    (6)  The Director shall act  as  Trustee  for  the  Trust
Account,  act  as  Trustee  over  all collateral, guarantees,
grain assets, and equity assets held by  the  Department  for
the  benefit  of  claimants,  and exercise certain powers and
perform related duties under Section 20-5 of  this  Code  and
Section 205-410 of the Department of Agriculture Law (20 ILCS
205/205-410),  except  that  the  provisions of the Trust and
Trustees Act do not apply to the Trust Account or  any  other
trust created under this Code.
    (7)  The  Director shall personally serve as president of
the Corporation.
    (8)  The Director shall collect and deposit all  monetary
penalties,  printer registration fees, funds, and assessments
authorized under this Code into the Fund.
    (9)  The Director may initiate any  action  necessary  to
pay  refunds from the Fund. The Director may initiate refunds
for errors of assessments  that  do  not  exceed  $2,000  per
licensee,  lender,  or  grain seller without authorization by
the Board.
    (10)  The Director shall maintain a  holding  corporation
to  receive,  hold  title  to,  and  liquidate  assets  of or
relating to a failed licensee, including assets in  reference
to  collateral  or  guarantees, and deposit the proceeds into
the Fund.
    (11)  The  Director  may  initiate,  participate  in,  or
withdraw from any proceedings to liquidate and  collect  upon
grain  assets,  equity  assets,  collateral,  and  guarantees
relating to a failed licensee, including, but not limited to,
all  powers  needed  to  carry  out the provisions of Section
20-15.
    (12)  The Director, as Trustee or otherwise, may take any
action that may be reasonable or appropriate to enforce  this
Code and its rules.
(Source:  P.A.  91-213,  eff.  7-20-99;  91-239, eff. 1-1-00;
92-16, eff. 6-28-01.)

    (240 ILCS 40/1-20)
    Sec.  1-20.  Administrative  review  and  venue.    Final
administrative  decisions  of  the  Department are subject to
judicial review under  Article  III  of  the  Code  of  Civil
Procedure  and its rules.  The term "administrative decision"
is  defined  as  in  Section  3-101  of  the  Code  of  Civil
Procedure.  An  action  to  review  a  final   administrative
decision  under  this  Code  may  be commenced in the Circuit
Court of any county in which  any  part  of  the  transaction
occurred  that gave rise to the claim that was the subject of
the proceedings before the Department.
(Source: P.A. 89-287, eff. 1-1-96.)

    (240 ILCS 40/1-25)
    Sec. 1-25.  Rules.  The Department may  promulgate  rules
that  are necessary for the implementation and administration
of this Code.
    The Department shall  adopt  rules  governing  electronic
systems  under  which  electronic  warehouse  receipts may be
issued and transferred.  Licensees  shall  not  be  required,
however, to issue or use electronic warehouse receipts. These
rules  shall be adopted after the United States Department of
Agriculture  adopts  regulations  concerning  an   electronic
receipt transfer system pursuant to 7 U.S.C. 242, 250.
(Source: P.A. 89-287, eff. 1-1-96.)

    (240 ILCS 40/5-5)
    Sec. 5-5.   Licenses required; applications; exemptions.
    (a)  Except  as  provided in subsection (e), a person may
not engage in the business of buying grain from producers, or
storing  grain  for  compensation,  as  a  grain  dealer,  an
incidental grain dealer, or a warehouseman in  the  State  of
Illinois  without  a  license issued by the Department, or in
the case of a federal  warehouseman,  by  the  United  States
government.
    (b)  An application for a license shall be filed with the
Department,  shall be in a form prescribed by the Department,
and shall set forth the name of the applicant, the  directors
and  officers if the applicant is a corporation, the partners
if the  applicant  is  a  partnership,  the  members  of  the
governing body and all persons with management or supervisory
authority  if  the  applicant  is  an  entity  other  than  a
corporation  or  partnership,  the  location of the principal
office or place of business of the applicant, the location of
the principal office or place of business of the applicant in
Illinois, and the location or locations in Illinois at  which
the  applicant  proposes to engage in business as a licensee,
the fiscal year of the applicant, the kind of grain that  the
applicant  proposes  to  buy,  handle,  or store, the type of
business  that  the  applicant  proposes  to   conduct,   and
additional  information  that  the  Department may require by
rule.
    (c)  The  application  for  a  warehouseman  shall  state
whether the applicant proposes to store grain only for others
or for the applicant and for others and shall also state  the
storage  capacity  for  which  the  applicant  desires  to be
licensed.
    (d)  If an applicant has been engaged in  business  as  a
grain  dealer  for  one  year  or more, the application shall
state the aggregate dollar amount paid to producers for grain
during the applicant's last completed fiscal  year.   If  the
applicant has been engaged in business for less than one year
or  has  not  engaged  in  the  business of buying grain from
producers as a grain dealer, the application shall state  the
estimated aggregate dollar amount to be paid by the applicant
to  producers  for  grain purchased from producers during the
applicant's first fiscal year.
    (e)  The following persons are exempt from being licensed
as a grain dealer or incidental grain dealer:
         (1)  A person purchasing grain from  producers  only
    for resale as agricultural seed.
         (2)  A producer purchasing grain from producers only
    for its own use as seed or feed.
(Source: P.A. 89-287, eff. 1-1-96.)

    (240 ILCS 40/5-10)
    Sec.  5-10.   Financial statement and fee requirements to
obtain or amend a license.
    (a)  Applications for a new license to operate as a Class
I warehouseman or grain dealer shall be accompanied  by  each
of the following:
         (1)  A financial statement made within 90 days after
    the   applicant's   fiscal   year  end  and  prepared  in
    conformity with generally accepted accounting  principles
    following  an  examination  conducted  in accordance with
    generally accepted auditing standards that  has  attached
    the  unqualified  opinion,  or a qualified opinion if the
    qualification, in the sole discretion of the  Department,
    does  not  unduly diminish the financial stability of the
    licensee or applicant, , or other opinion  acceptable  to
    the   Department,  of  an  independent  certified  public
    accountant licensed  under  Illinois  law  or  an  entity
    permitted  to engage in the practice of public accounting
    under item (b)(3) of Section 14 of  the  Illinois  Public
    Accounting Act.
              (A)  If  the  applicant  has  been  engaged  in
         business  prior  to  the  application, the financial
         statement shall set forth the financial position and
         results in operations for  the  most  recent  fiscal
         year  of  the  applicant.   The  financial statement
         shall consist  of  a  balance  sheet,  statement  of
         income, statement of retained earnings, statement of
         cash flows, notes to financial statements, and other
         information as required by the Department.
              (B)  If  the  applicant has not been engaged in
         business prior to  the  application,  the  financial
         statement shall consist of a balance sheet, notes to
         financial   statements,  and  other  information  as
         required by the Department.
         (2)  An  application  fee  of  $200  $100  for  each
    license, $100  of  which  shall  be  deposited  into  the
    General  Revenue  Fund  and the balance of which shall be
    deposited into the Regulatory Fund.
         (3)  A  fee  for  each  required  certificate.   The
    amount  of  the  fee  for  each  certificate   shall   be
    established  by  rule.   Fees shall be deposited into the
    Regulatory Fund.
    (b)  Applications for a new license to operate as a Class
II  warehouseman  or  incidental  grain   dealer   shall   be
accompanied by:
         (1)  A  financial  statement  prepared in accordance
    with the requirements of item (a)(1) of Section 5-10  or,
    instead, a financial statement made within 90 days of the
    date  of  the  application  prepared  or  certified by an
    independent accountant and verified  under  oath  by  the
    applicant.   The  financial statement shall set forth the
    balance sheet and other information with respect  to  the
    financial  resources of the applicant that the Department
    may require.   If  the  applicant  has  been  engaged  in
    business   prior   to   the  application,  the  financial
    statement shall also set forth a statement of  income  of
    the applicant.
         (2)  An  application  fee  of  $150  $100  for  each
    license,  $100  of  which  shall  be  deposited  into the
    General Revenue Fund and the balance of  which  shall  be
    deposited into the Regulatory Fund.
         (3)  A  fee  for  each  required  certificate.   The
    amount   of   the  fee  for  each  certificate  shall  be
    established by rule.  Fees shall be  deposited  into  the
    Regulatory Fund.
    (c)  Applications  to  amend  a  warehouseman's  licensed
storage  capacity,  including  applications  in  reference to
temporary storage and emergency storage or to otherwise amend
a license, shall be accompanied by a filing fee of $100,  $50
of which shall be deposited into the General Revenue Fund and
the  balance  of which shall be deposited into the Regulatory
Fund $50.
(Source: P.A. 89-287, eff. 1-1-96.)

    (240 ILCS 40/5-15)
    Sec. 5-15.  Renewal of license.
    (a)  The application for renewal of a  license  shall  be
filed  with  the Department annually within 90 days after the
licensee's fiscal year end.  The Department may, upon request
of the licensee, payment of an extension fee of $100 $50, $50
of which shall be deposited into the General Revenue Fund and
the balance of which shall be deposited into  the  Regulatory
Fund,  and  delivery  to  the  Department  of  a  preliminary
financial  statement  compiled  reviewed  by  an  independent
certified public accountant licensed under Illinois law or an
entity   permitted  to  engage  in  the  practice  of  public
accounting under item (b)(3) of Section 14  of  the  Illinois
Public  Accounting  Act  or,  in  the  case  of  a  Class  II
warehouseman   or  incidental  grain  dealer,  a  preliminary
financial statement reviewed  by  an  independent  accountant
that  meets  the  financial requirements of subsection (b) of
Section 5-25, extend, for up to but not  exceeding  30  days,
the  period  of time during which the application for renewal
of a license may  be  filed.  The  Department,  however,  may
provide  by  rule  for  reducing  the  filing  period  for an
application for renewal of a license to no less than 60  days
after  the  licensee's  fiscal  year  end  if  the Department
determines that an applicant has financial  deficiencies,  or
there are other factors, that would create a substantial risk
of  failure loss to potential claimants.  The Department must
give written notice of  the  reduced  filing  period  to  the
licensee at least 60 days before the earlier deadline imposed
by  the  Department  to file the application for renewal of a
license.  Notice is deemed given  when  mailed  by  certified
mail,  return  receipt requested, properly addressed and with
sufficient postage attached.
    (b)  The application for renewal shall be accompanied  by
the financial statement required by Section 5-20.
    (c)  Failure  to  meet all of the conditions to renew the
license may result in a denial of renewal of the license. The
licensee may request an administrative hearing to dispute the
denial of renewal, after which the Director  shall  enter  an
order either renewing or refusing to renew the license.
(Source: P.A. 89-287, eff. 1-1-96.)

    (240 ILCS 40/5-20)
    Sec.  5-20.  Financial statement and fee requirements for
the renewal of a license.
    (a)  Applications for a renewal of a license  to  operate
as   a   Class  I  warehouseman  or  grain  dealer  shall  be
accompanied by each of the following:
         (1)  A financial statement made within 90 days after
    the  applicant's  fiscal  year  end   and   prepared   in
    conformity  with generally accepted accounting principles
    following an examination  conducted  in  accordance  with
    generally  accepted  auditing standards that has attached
    the unqualified opinion, or a qualified  opinion  if  the
    qualification,  in the sole discretion of the Department,
    does not unduly diminish the financial stability  of  the
    licensee  or  applicant, , or other opinion acceptable to
    the  Department,  of  an  independent  certified   public
    accountant  licensed  under  Illinois  law  or  an entity
    permitted to engage in the practice of public  accounting
    under  item  (b)(3)  of Section 14 of the Illinois Public
    Accounting Act.  The financial statement shall consist of
    a  balance  sheet,  statement  of  income,  statement  of
    retained earnings, statement  of  cash  flows,  notes  to
    financial  statements,  and other information as required
    by the Department.  The  financial  statement  shall  set
    forth  the  financial  position and results in operations
    for the most recent fiscal year of the applicant.
         (2)  A fee of $200 $100 for each  license,  $100  of
    which  shall  be  deposited into the General Revenue Fund
    and the balance of which  shall  be  deposited  into  the
    Regulatory Fund.
         (3)  A  fee  for  each  required  certificate.   The
    amount   of   the  fee  for  each  certificate  shall  be
    established by rule.  Fees shall be  deposited  into  the
    Regulatory Fund.
    (b)  Applications  for  a renewal of a license to operate
as a Class II warehouseman or incidental grain  dealer  shall
be accompanied by each of the following:
         (1)  A  financial  statement  prepared in accordance
    with the requirements of item (a)(1) of Section 5-10  or,
    instead,  a financial statement made within 90 days after
    the date of the application prepared or certified  by  an
    independent  accountant  and  verified  under oath by the
    applicant.  The financial statement shall set  forth  the
    balance  sheet  and  statement of income of the applicant
    and other  information  with  respect  to  the  financial
    resources  of  the  applicant  that  the  Department  may
    require.
         (2)  A  fee  of  $150 $100 for each license, $100 of
    which shall be deposited into the  General  Revenue  Fund
    and  the  balance  of  which  shall be deposited into the
    Regulatory Fund.
         (3)  A  fee  for  each  required  certificate.   The
    amount  of  the  fee  for  each  certificate   shall   be
    established  by  rule.   Fees shall be deposited into the
    Regulatory Fund.
(Source: P.A. 89-287, eff. 1-1-96.)

    (240 ILCS 40/5-25)
    Sec. 5-25.  Licensing standards  and  requirements.   The
Department  shall  issue,  amend,  or  renew a license if the
Department is satisfied that the applicant or licensee  meets
the   standards   and  requirements  of  this  Section.   The
standards and requirements of subsections (a) and (b) of this
Section must be observed  and  complied  with  at  all  times
during the term of the license.
    (a)  General requirements.
         (1)  The  applicant  or  licensee  must  have a good
    business reputation, have not been involved  in  improper
    manipulation  of    books  and  records or other improper
    business  practices,  and  have  the  qualifications  and
    background essential for the conduct of the business of a
    licensee.  The Department must be  satisfied  as  to  the
    business  reputation,  background,  and qualifications of
    the management and principal officers of the applicant or
    licensee.   The Department may obtain criminal  histories
    of  management and principal officers of the applicant or
    licensee.
         (2)  The  applicant  or  licensee  must  maintain  a
    permanent business location in the State of Illinois.  At
    Each location where the licensee is transacting business,
    that place of business shall remain open  from  at  least
    one-half  hour  before  the  daily  opening  to  at least
    one-half hour after the  daily  closing  of  the  Chicago
    Board   of   Trade,  unless  otherwise  approved  by  the
    Department.
         (3)  The applicant or licensee must  have  insurance
    on  all grain in its possession or custody as required in
    this Code.
         (4)  The applicant or licensee shall  at  all  times
    keep  sufficiently  detailed books and records to reflect
    compliance with  all   requirements  of  this  Code.  The
    Department  may  require  that  certain  records  located
    outside  the  State  of Illinois, if any, be brought to a
    specified  location  in  Illinois  for  review   by   the
    Department.
         (5)  The  applicant  or  licensee  and  each  of its
    officers, directors, partners, and managers must not have
    been found guilty of a criminal violation of  this  Code,
    any  of  its  predecessor  statutes,  or  any  similar or
    related statute or law of the United States or any  other
    state  or  jurisdiction  within 10 3 years of the date of
    application for the issuance or renewal of a license.
         (6)  The applicant  or  licensee  and  each  of  its
    officers,  directors, managers, and partners, that at any
    one time have been a licensee under this Code or  any  of
    its  predecessor  statutes, or licensed under any similar
    or related statute or law of the  United  States  or  any
    other  state  or  jurisdiction,  must  not  have  had its
    license terminated or revoked by the Department,  by  the
    United  States,  or  by  any other state or jurisdiction,
    within 2  years  of  the  date  of  application  for  the
    issuance  or  renewal  of  a  license leaving unsatisfied
    indebtedness to claimants.
         (7)  The applicant  or  licensee  and  each  of  its
    officers, directors, managers, and partners must not have
    been  an  officer,  director,  manager,  or  partner of a
    former licensee under this Code or any of its predecessor
    statutes, or of a business formerly  licensed  under  any
    similar or related statute or law of the United States or
    any  other  state  or  jurisdiction, that had its license
    terminated or revoked by the Department,  by  the  United
    States,  or  by any other state or jurisdiction, within 2
    years of the date of  application  for  the  issuance  or
    renewal of a license, leaving unsatisfied indebtedness to
    claimants,  unless  the  applicant  or  licensee  makes a
    sufficient showing to the Department that the  applicable
    person   or   related   party   was  not  materially  and
    substantially involved as a  principal  in  the  business
    that  had  its license terminated or revoked.  An interim
    or temporary manager that is employed by  a  licensee  to
    reorganize  the  licensee or to manage the licensee until
    its business is sold, transferred, or liquidated  is  not
    in  violation  of  this  subsection (7) solely because of
    that employment as an interim or temporary manager.
    (b)  Financial requirements.
         (1)  The applicant or licensee's financial statement
    must show a current ratio of the total  adjusted  current
    assets  to  the  total adjusted current liabilities of at
    least one to one.
              (A)  Adjusted   current   assets    shall    be
         calculated  by  deducting  from  the  stated current
         assets shown on the balance sheet submitted  by  the
         applicant   or   licensee   any  current  asset,  as
         calculated in item  (B)  of  this  subdivision  (1),
         resulting   from  notes  receivable  from    related
         persons, accounts receivable from  related  persons,
         stock   subscriptions   receivable,  and  any  other
         related person receivables.
              (B)  A disallowed current asset shall be netted
         against any related liability and the net result, if
         an asset,  shall  be  subtracted  from  the  current
         assets.
         (2)  The applicant or licensee's financial statement
    and  balance sheet must show an adjusted debt to adjusted
    equity ratio of not more than 3 to one.
              (A)  Adjusted  debt  shall  be  calculated   by
         totaling   current  and  long-term  liabilities  and
         reducing the total liabilities, up to the amount  of
         current  liabilities, by the liquid assets appearing
         in the current asset section of  the  balance  sheet
         submitted  by  the  applicant  or licensee.  For the
         purposes of this Section, liquid assets include  but
         are not limited to cash, depository accounts, direct
         obligations   of  the  U.S.  Government,  marketable
         securities,  grain  assets,   balances   in   margin
         accounts, and tax refunds.
              (B)  Adjusted  equity  shall  be  calculated by
         deducting from the stated net  worth  shown  on  the
         balance sheet submitted by the applicant or licensee
         any  asset,  as  calculated  in  item  (C)  of  this
         subdivision  (2),  resulting  from  notes receivable
         from  related  persons,  accounts  receivable   from
         related  persons, stock subscriptions receivable, or
         any other related person receivables.
              (C)  A disallowed asset shall be netted against
         any related liability and  the  net  result,  if  an
         asset,  shall  be  subtracted  from  the  stated net
         worth,  or  if  a  liability  it  shall   remain   a
         liability.
         (3)  An  applicant or licensee must have an adjusted
    equity of at least $50,000 as determined  by  the  method
    specified  in item (b)(2) of this Section. Beginning with
    the first fiscal year of a licensee  ending  after  2004,
    the  adjusted  equity, as defined by the method specified
    in item (b)(2) of this Section,  shall  be  increased  by
    $10,000  per  fiscal year until the adjusted equity of an
    applicant or licensee is at least $100,000.
         (4)  For  the  purposes  of  this   Section,   notes
    receivable from related persons, accounts receivable from
    related persons, and any other related person receivables
    are  not a disallowed asset if the related person is also
    a licensee and meets all of the financial requirements of
    this Code.
         (5)  An applicant for a new  license  shall  not  be
    permitted  to  collateralize  the  requirements  of items
    (b)(1) and (b)(3) of this Section in order to satisfy the
    requirements for a new license.
(Source: P.A. 89-287, eff. 1-1-96.)

    (240 ILCS 40/5-30)
    Sec.  5-30.    Grain  Insurance  Fund  assessments.   The
Illinois  Grain  Insurance   Fund   is   established   as   a
continuation  of  the  fund  created under the Illinois Grain
Insurance Act, now repealed. Licensees, and applicants for  a
new  license,  first  sellers  of  grain  to grain dealers at
Illinois  locations,  and  lenders  to  licensees  shall  pay
assessments as set forth in this Section.
    (a)  Subject  to  subsection  (e)  of  this  Section,   a
licensee  that  is newly licensed after the effective date of
this Code shall  pay  an  assessment  into  the  Fund  for  3
consecutive  years.   These  assessments  are known as "newly
licensed assessments".  Except as provided  in  item  (6)  of
subsection   (b)  of  this  Section,  the  first  installment
assessment shall be  paid  at  the  time  of  or  before  the
issuance  of a new license, the second installment assessment
shall be paid on or before the first anniversary date of  the
issuance  of  the  new  license,  and  the  third installment
assessment shall be paid on or before the second  anniversary
date of the issuance of the new license.  For a grain dealer,
the initial payment of each of the 3 installments assessments
shall  be  based  upon  the  total  estimated  value of grain
purchases by the grain dealer for the  applicable  year  with
the  final  installment  assessment  amount determined as set
forth in item (6) of subsection (b) of this  Section.   After
the  licensee  has  paid  or  was  required to pay the last 3
installments  of  the  newly  licensed  assessments  first  3
assessments to the Department for payment into the Fund,  the
licensee  shall  be  subject to subsequent assessments as set
forth in subsection (d) of this Section.
    (b)  Grain dealer newly licensed assessments.
         (1)  The first installment assessment  for  a  grain
    dealer shall be an amount equal to:
              (A)  $0.000145 multiplied by the total value of
         grain  purchases for the grain dealer's first fiscal
         year as shown in the final financial  statement  for
         that  year  provided to the Department under Section
         5-20; and
              (B)  $0.000255 multiplied by  that  portion  of
         the  value of grain purchases for the grain dealer's
         first fiscal year that  exceeds the adjusted  equity
         of  the  licensee  multiplied by 20, as shown on the
         final financial statement for the  licensee's  first
         fiscal year provided to the Department under Section
         5-20.
         (2)  The  minimum  amount  assessment  for the first
    installment assessment  shall  be  $500  $1,000  and  the
    maximum shall be $15,000 $10,000.
         (3)  The  second  installment assessment for a grain
    dealer shall be an amount equal to:
              (A)  $0.0000725 multiplied by the  total  value
         of  grain  purchases  for  the grain dealer's second
         fiscal  year  as  shown  in  the   final   financial
         statement  for  that year provided to the Department
         under Section 5-20; and
              (B)  $0.0001275 multiplied by that  portion  of
         the  value of grain purchases for the grain dealer's
         second fiscal year that exceeds the adjusted  equity
         of  the  licensee  multiplied by 20, as shown on the
         final financial statement for the licensee's  second
         fiscal year provided to the Department under Section
         5-20.
         (4)  The  third  installment  assessment for a grain
    dealer shall be an amount equal to:
              (A)  $0.0000725 multiplied by the  total  value
         of  grain  purchases  for  the  grain dealer's third
         fiscal  year  as  shown  in  the   final   financial
         statement  for  that year provided to the Department
         under Section 5-20; and
              (B)  $0.0001275 multiplied by that  portion  of
         the  value of grain purchases for the grain dealer's
         third fiscal year that exceeds the  adjusted  equity
         of  the  licensee  multiplied by 20, as shown on the
         final financial statement for the  licensee's  third
         fiscal year.
         (5)  The  minimum  amount  of  the  second and third
    installments assessments shall be $250 $500 per year  and
    the maximum for each year shall be $7,500 $5,000.
         (6)  Each  of the newly licensed first 3 assessments
    shall be adjusted up or down based upon the actual annual
    grain purchases for each  year  as  shown  in  the  final
    financial   statement  for  that  year  provided  to  the
    Department under Section 5-20.  The adjustments shall  be
    determined  by  the Department within 30 days of the date
    of approval of renewal of a  license.  Refunds  shall  be
    paid   out   of   the  Fund  within  60  days  after  the
    Department's determination.  Additional amounts owed  for
    any  installment assessments shall be paid within 30 days
    after notification  by  the  Department  as  provided  in
    subsection (f) of this Section.
         (7)  For the purposes of grain dealer newly licensed
    assessments  under  subsection  (b)  of this Section, the
    total value of grain purchases shall be the  total  value
    of  first time grain purchases by Illinois locations from
    producers.
         (8)  The second and third installments shall be paid
    to the Department within 60 days after the date posted on
    the written notice of assessment.  The  Department  shall
    immediately deposit all paid installments into the Fund.
    (c)  Warehouseman newly licensed assessments.
         (1)  The  first  assessment for a warehouseman shall
    be an amount equal to:
              (A)  $0.00085 multiplied by the total permanent
         storage capacity of the warehouseman at the time  of
         license issuance; and
              (B)  $0.00099 multiplied by that portion of the
         permanent  storage  capacity  of the warehouseman at
         the  time  of  license  issuance  that  exceeds  the
         adjusted equity of the licensee multiplied by 5, all
         as shown on the final financial  statement  for  the
         licensee  provided  to  the Department under Section
         5-10.
         (2)  The minimum amount  assessment  for  the  first
    installment  assessment  shall  be  $500  $1,000  and the
    maximum shall be $15,000 $10,000.
         (3)  The second and third  installments  assessments
    shall be an amount equal to:
              (A)  $0.000425    multiplied   by   the   total
         permanent storage capacity of  the  warehouseman  at
         the time of license issuance; and
              (B)  $0.000495  multiplied  by  that portion of
         the  permanent  licensed  storage  capacity  of  the
         warehouseman at the time of  license  issuance  that
         exceeds   the   adjusted   equity  of  the  licensee
         multiplied by 5, as shown  on  the  final  financial
         statement  for  the licensee's last completed fiscal
         year provided to the Department under Section 5-20.
         (4)  The minimum amount assessment  for  the  second
    and third installments assessments shall be $250 $500 per
    installment   assessment   and   the   maximum  for  each
    installment assessment shall be $7,500 $5,000.
         (5)  Every warehouseman shall pay an assessment when
    increasing available permanent  storage  capacity  in  an
    amount  equal to $0.001 multiplied by the total number of
    bushels to be added to permanent storage  capacity.   The
    minimum  assessment  on any increase in permanent storage
    capacity shall be $50 and the maximum assessment shall be
    $20,000.  The  assessment  based  upon  an  increase   in
    permanent storage capacity shall be paid at or before the
    time  of  approval  of  the increase in permanent storage
    capacity.  This assessment  on  the  increased  permanent
    storage capacity does not relieve the warehouseman of any
    assessments  as  set  forth  in  subsection  (d)  of this
    Section.
         (6)  Every warehouseman shall pay an  assessment  of
    $0.0005  per  bushel  when  increasing  available storage
    capacity by use of temporary storage space.  The  minimum
    assessment on temporary storage space shall be $100.  The
    assessment  based  upon  temporary storage space shall be
    paid at or before the time of approval of the  amount  of
    the  temporary  storage  space.    This assessment on the
    temporary storage space capacity  does  not  relieve  the
    warehouseman   of   any   assessments  as  set  forth  in
    subsection (d) of this Section.
         (7)  Every warehouseman shall pay an  assessment  of
    $0.001  per  bushel  of  emergency    storage space.  The
    minimum assessment on any emergency storage  space  shall
    be  $100.   The  assessment  based upon emergency storage
    space shall be paid at or before the time of approval  of
    the   amount   of  the  emergency  storage  space.   This
    assessment  on  the  emergency  storage  space  does  not
    relieve the warehouseman of any assessments as set  forth
    in subsection (d) of this Section.
         (8)  The second and third installments shall be paid
    to the Department within 60 days after the date posted on
    the  written  notice  of assessment. The Department shall
    immediately deposit all paid installments into the Fund.
    (d)  Grain dealer  subsequent  assessments;  warehouseman
subsequent assessments Subsequent assessments.
         (1)  Subject  to  paragraph  (4)  of this subsection
    (d), if on the first working day of  a  calendar  quarter
    when  a  licensee is not already subject to an assessment
    under this subsection (d) (the  assessment  determination
    date),  if the equity in the Fund is less than $6,000,000
    below $3,000,000 on September  1st  of  any  year,  every
    grain  dealer  who  has, or was required to have, already
    paid  the  newly  licensed  first,  second,   and   third
    assessments  shall  be  assessed  by  the Department in a
    total an amount equal to:
              (A)  $0.0000725 multiplied by the  total  value
         of  grain  purchases  for  the  grain  dealer's last
         completed  fiscal  year  prior  to  the   assessment
         determination  date  as shown in the final financial
         statement for that year provided to  the  Department
         under Section 5-20; and
              (B)  $0.0001275  multiplied  by that portion of
         the value of grain purchases for the grain  dealer's
         last  completed  fiscal year prior to the assessment
         determination date that exceeds the adjusted  equity
         of  the  licensee  multiplied by 20, as shown on the
         final financial statement for  the  licensee's  last
         completed  fiscal  year  provided  to the Department
         under Section 5-20.
         The minimum total amount for the  grain  dealer's  a
    subsequent  assessment  shall  be  $250 $500 per 12-month
    period year and the maximum amount shall be $7,500 $5,000
    per 12-month period year.   For  the  purposes  of  grain
    dealer  assessments under this item (1) of subsection (d)
    of this Section, the total value of grain purchases shall
    be the total value  of  first  time  grain  purchases  by
    Illinois locations from producers.
         (2)  Subject  to  paragraph  (4)  of this subsection
    (d), if on the first working day of  a  calendar  quarter
    when  a  licensee  is  not subject to an assessment under
    this subsection (d) (the assessment determination  date),
    if  the  equity in the Fund is less than $6,000,000 below
    $3,000,000  on  September  1st   of   any   year,   every
    warehouseman  who  has,  or was required to have, already
    paid  the  newly  licensed  first,  second,   and   third
    assessments  shall  be assessed a warehouseman subsequent
    assessment by the Department in a total an  amount  equal
    to:
              (A)  $0.000425 multiplied by the total licensed
         storage capacity of the warehouseman as of the first
         day  of  September  that  immediately  precedes  the
         assessment determination date 1st of that year; and
              (B)  $0.000495  multiplied  by  that portion of
         the licensed storage capacity of the warehouseman as
         of the  first  day  of  September  that  immediately
         precedes  the  assessment  determination date 1st of
         that year that exceeds the adjusted  equity  of  the
         licensee  multiplied  by  5,  as  shown on the final
         financial  statement   for   the   licensee's   last
         completed  fiscal  year  provided  to the Department
         under Section 5-20.
         The  minimum  total  amount   for   a   warehouseman
    subsequent  assessment  shall  be  $250 $500 per 12-month
    period year and the maximum amount shall be $7,500 $5,000
    per 12-month period year.
         (3)  Subject to paragraph  (4)  of  this  subsection
    (d), if the equity in the Fund is below $6,000,000 on the
    first  working  day of a calendar quarter when a licensee
    is not  already  subject  to  an  assessment  under  this
    subsection (d) (the assessment determination date), every
    incidental grain dealer who has, or was required to have,
    already  paid  all  3  installments of the newly licensed
    assessments shall be assessed  by  the  Department  in  a
    total  amount  equal  to  $100.  It  shall be paid to the
    Department within 60 days after the date  posted  on  the
    written  notification  by  the Department, which shall be
    sent  after  the  first  day  of  the  calendar   quarter
    immediately following the assessment determination date.
         (4)  Following  the  payment  of the final quarterly
    installment by grain dealers and warehousemen,  the  next
    assessment  determination  date can be no sooner than the
    first working  day  of  the  sixth  full  calendar  month
    following the payment.
         (5)  All assessments under paragraphs (1) and (2) of
    this  subsection  (d)  shall be effective as of the first
    day of the calendar  quarter  immediately  following  the
    assessment  determination  date  and shall be paid to the
    Department by licensees in 4 equal  installments  by  the
    twentieth   day  of  each  consecutive  calendar  quarter
    following notice by the Department of the assessment. The
    Department shall give written notice to all licensees  of
    when  the  assessment  is  effective, and the rate of the
    assessment, by mail within 20 days after  the  assessment
    determination date.
         (6)  After an assessment under paragraph (1) and (2)
    of  this  subsection (d) is instituted, the amount of any
    unpaid installments  for  the  assessment  shall  not  be
    adjusted   based   upon   any  change  in  the  financial
    statements or licensed storage capacity of a licensee.
         (7)  If the due date for the payment by  a  licensee
    of  the third assessment under subsections (b) and (c) of
    this Section 5-30 is after the  assessment  determination
    date,  that licensee shall not be subject to any of the 4
    installments of an assessment under  paragraphs  (1)  and
    (2) of this subsection (d).
         (8)  The  Department  shall  immediately deposit all
    paid assessments into the Fund. If the due date  for  the
    payment  by  a  licensee of the third assessment is after
    September 1st in a year when the equity in  the  Fund  is
    below $3,000,000, that licensee shall not be subject to a
    subsequent assessment for that year.
    (e)  Newly licensed; exemptions.
         (1)  For  the purpose of assessing fees for the Fund
    under subsection (a) of this Section, and subject to  the
    provisions of item (e)(2) of this Section, the Department
    shall consider the following to be newly licensed:
              (A)  A  person  that becomes a licensee for the
         first time after the effective date of this Code.
              (B)  A licensee who has a lapse in licensing of
         more  than  30  days.   A  license  shall   not   be
         considered  to  be  lapsed  after  its revocation or
         termination if an administrative or judicial  action
         is  pending or if an order from an administrative or
         judicial body continues an existing license.
              (C)  A  grain  dealer   that   is   a   general
         partnership   in   which   there   is  a  change  in
         partnership interests and  that  change  is  greater
         than 50% during the partnership's fiscal year.
              (D)  A   grain   dealer   that   is  a  limited
         partnership in  which  there  is  a  change  in  the
         controlling  interest  of a general partner and that
         change is greater than 50% of the total  controlling
         interest  during  the  limited  partnership's fiscal
         year.
              (E)  A grain dealer that is a limited liability
         company in which there is  a  change  in  membership
         interests and that change is greater than 50% during
         the limited liability company's fiscal year.
              (F)  A  grain  dealer  that  is the result of a
         statutory consolidation if that person has  adjusted
         equity  of  less  than  90% of the combined adjusted
         equity of the predecessor persons who  consolidated.
         For  the  purposes  of  this paragraph, the adjusted
         equity of the resulting person shall  be  determined
         from  the  approved or certified financial statement
         submitted to the Department  for  the  first  fiscal
         year  of  the  resulting person.  For the purpose of
         this paragraph, the combined adjusted equity of  the
         predecessor persons shall be determined by combining
         the  adjusted  equity  of each predecessor person as
         set forth in the most recent approved  or  certified
         financial   statement  of  each  predecessor  person
         submitted to the Department.
              (G)  A grain dealer that is  the  result  of  a
         statutory  merger if that person has adjusted equity
         of less than 90% of the combined adjusted equity  of
         the   predecessor   persons  who  merged.   For  the
         purposes of this paragraph, the adjusted  equity  of
         the  resulting  person  shall be determined from the
         approved or certified financial statement  submitted
         to  the  Department for the first fiscal year of the
         resulting person ending after the merger.   For  the
         purposes  of  this  paragraph, the combined adjusted
         equity  of  the   predecessor   persons   shall   be
         determined  by combining the adjusted equity of each
         predecessor person as set forth in the  most  recent
         approved  or certified financial statement submitted
         to the Department for the last fiscal year  of  each
         predecessor  person  ending on the date of or before
         the merger.
              (H)  A  grain  dealer   that   is   a   general
         partnership   in   which   there   is  a  change  in
         partnership interests and that change is 50% or less
         during the partnership's fiscal year if the adjusted
         equity of the partnership after the change  is  less
         than  90%  of the adjusted equity of the partnership
         before  the  change.   For  the  purpose   of   this
         paragraph,  the  adjusted  equity of the partnership
         after  the  change  shall  be  determined  from  the
         approved or certified financial statement  submitted
         to  the  Department for the first fiscal year ending
         after  the  change.   For  the  purposes   of   this
         paragraph,  the  adjusted  equity of the partnership
         before the  change  shall  be  determined  from  the
         approved  or certified financial statement submitted
         to the Department for the last fiscal  year  of  the
         partnership  ending  on  the  date  of or before the
         change.
              (I)  A  grain  dealer   that   is   a   limited
         partnership  in  which  there  is  a  change  in the
         controlling interest of a general partner  and  that
         change  is  50%  or  less  of  the total controlling
         interest during the partnership's fiscal year if the
         adjusted equity of the partnership after the  change
         is  less  than  90%  of  the  adjusted equity of the
         partnership before the change.  For the purposes  of
         this   paragraph,   the   adjusted   equity  of  the
         partnership after the  change  shall  be  determined
         from  the  approved or certified financial statement
         submitted to the Department  for  the  first  fiscal
         year  ending  after the change.  For the purposes of
         this  paragraph,  the   adjusted   equity   of   the
         partnership  before  the  change shall be determined
         from the approved or certified  financial  statement
         submitted to the Department for the last fiscal year
         of  the  partnership ending on the date of or before
         the change.
              (J)  A grain dealer that is a limited liability
         company in which there is  a  change  in  membership
         interests  and  that  change  is  50% or less of the
         total  membership  interests  during   the   limited
         liability  company's  fiscal  year  if  the adjusted
         equity of the limited liability  company  after  the
         change  is  less  than 90% of the adjusted equity of
         the limited liability  company  before  the  change.
         For  the  purposes  of  this paragraph, the adjusted
         equity of the limited liability  company  after  the
         change  shall  be  determined  from  the approved or
         certified  financial  statement  submitted  to   the
         Department  for  the  first fiscal year ending after
         the change.  For the purposes of this paragraph, the
         adjusted equity of  the  limited  liability  company
         before  the  change  shall  be  determined  from the
         approved or certified financial statement  submitted
         to  the  Department  for the last fiscal year of the
         limited liability company ending on the date  of  or
         before the change.
              (K)  A  grain  dealer  that  is the result of a
         statutory consolidation or merger if one or more  of
         the predecessor  persons that consolidated or merged
         into  the resulting  grain dealer was not a licensee
         under this Code at the time of the consolidation  or
         merger.
         (2)  For  the purpose of assessing fees for the Fund
    as set forth in  subsection  (a)  of  this  Section,  the
    Department  shall  consider  the  following  as not being
    newly  licensed  and,  therefore,  exempt  from   further
    assessment unless an assessment is required by subsection
    (d) of this Section:
              (A)  A  person  resulting  solely  from  a name
         change of a licensee.
              (B)  A warehouseman changing  from  a  Class  I
         warehouseman  to  a  Class II warehouseman or from a
         Class II warehouseman  to  a  Class  I  warehouseman
         under this Code.
              (C)  A  licensee  that  becomes  a wholly owned
         subsidiary of another licensee.
              (D)  Subject to item (e)(1)(K) of this Section,
         a  person  that  is  the  result  of   a   statutory
         consolidation  if  that  person  has adjusted equity
         greater  than  or  equal  to  90%  of  the  combined
         adjusted  equity  of  the  predecessor  persons  who
         consolidated.  For the purposes of  this  paragraph,
         the adjusted equity of the resulting person shall be
         determined  from the approved or certified financial
         statement submitted to the Department for the  first
         fiscal year of the resulting person. For the purpose
         of  this  paragraph, the combined adjusted equity of
         the  predecessor  persons  shall  be  determined  by
         combining the adjusted  equity  net  worth  of  each
         predecessor  person as set forth in the  most recent
         approved or certified financial  statement  of  each
         predecessor person submitted to the Department.
              (E)  Subject to item (e)(1)(K) of this Section,
         a person that is the result of a statutory merger if
         that  person  has  adjusted  equity  greater than or
         equal to 90% of the combined adjusted equity of  the
         predecessor persons who merged.  For the purposes of
         this paragraph, the adjusted equity of the resulting
         person  shall  be  determined  from  the approved or
         certified  financial  statement  submitted  to   the
         Department   for   the  first  fiscal  year  of  the
         resulting person ending after the merger.   For  the
         purposes  of  this  paragraph, the combined adjusted
         equity  of  the   predecessor   persons   shall   be
         determined  by combining the adjusted equity of each
         predecessor person as set forth in the  most  recent
         approved or certified financial statement, submitted
         to  the  Department for the last fiscal year of each
         predecessor person ending on the date of  or  before
         the merger.
              (F)  A  general partnership in which there is a
         change in partnership interests and that  change  is
         50% or less during the partnership's fiscal year and
         the  adjusted  equity  of  the partnership after the
         change is greater  than  or  equal  to  90%  of  the
         adjusted   equity  of  the  partnership  before  the
         change.  For the purposes  of  this  paragraph,  the
         adjusted  equity of the partnership after the change
         shall be determined from the approved  or  certified
         financial  statement submitted to the Department for
         the first fiscal year ending after the change.   For
         the  purposes of this paragraph, the adjusted equity
         of  the  partnership  before  the  change  shall  be
         determined from the approved or certified  financial
         statement  submitted  to the Department for the last
         fiscal year of the partnership ending on the date of
         or before the change.
              (G)  A limited partnership in which there is  a
         change  in  the  controlling  interest  of a general
         partner and that change is 50% or less of the  total
         controlling interest during the partnership's fiscal
         year  and  the  adjusted  equity  of the partnership
         after the change is greater than or equal to 90%  of
         the  adjusted  equity  of the partnership before the
         change.  For the purposes  of  this  paragraph,  the
         adjusted  equity of the partnership after the change
         shall be determined from the approved  or  certified
         financial  statement submitted to the Department for
         the first fiscal year ending after the change.   For
         the  purposes of this paragraph, the adjusted equity
         of  the  partnership  before  the  change  shall  be
         determined from the approved or certified  financial
         statement  submitted  to the Department for the last
         fiscal year of the partnership ending on the date of
         or before the change.
              (H)  A limited liability company in which there
         is a change in membership interests and that  change
         is  50%  or  less  of the total membership interests
         during the limited liability company's  fiscal  year
         if  the  adjusted  equity  of  the limited liability
         company after the change is greater than or equal to
         90% of the adjusted equity of the limited  liability
         company before the change.  For the purposes of this
         paragraph,   the  adjusted  equity  of  the  limited
         liability  company  after  the   change   shall   be
         determined  from the approved or certified financial
         statement submitted to the Department for the  first
         fiscal  year  ending  after  the  change.   For  the
         purposes  of  this paragraph, the adjusted equity of
         the limited  liability  company  before  the  change
         shall  be  determined from the approved or certified
         financial statement submitted to the Department  for
         the  last  fiscal  year  of  the  limited  liability
         company  ending on the date of or before the change.
              (I)  A licensed warehouseman that is the result
         of a statutory merger or consolidation to the extent
         the  combined  storage  capacity  of  the  resulting
         warehouseman  has  been  assessed  under  this  Code
         before the statutory merger or consolidation, except
         that  any  storage   capacity   of   the   resulting
         warehouseman  that  has not previously been assessed
         under this Code shall be  assessed  as  provided  in
         items (c)(5), (c)(6), and (c)(7) of this Section.
              (J)  A federal warehouseman who participated in
         the  Fund  under  Section 30-10 and who subsequently
         received an  Illinois  license  to  the  extent  the
         storage  capacity  of  the warehouseman was assessed
         under this Code prior to Illinois licensing.
    (f)  Grain  seller  initial   assessments   and   regular
assessments. Assessments under this subsection (f) apply only
to  the  first sale of grain to a grain dealer at an Illinois
location.
         (1) The grain seller initial  assessment  period  is
    that  period  of  time beginning on the effective date of
    this amendatory Act of  the  93rd  General  Assembly  and
    ending   on   the  first  assessment  determination  date
    thereafter when the  equity  in  the  fund  is  at  least
    $6,000,000.
         (2)  Subject to paragraph (3) of this subsection (f)
    (i)  if during the grain seller initial assessment period
    the equity in the Fund is less than $3,000,000 or (ii) if
    at any time after the  grain  seller  initial  assessment
    period the equity in the Fund is less than $2,000,000, on
    the  first working day of a calendar quarter when a grain
    seller is not already subject to an assessment under this
    subsection (f) (the assessment determination date),  each
    person  who  settles for grain (sold to a grain dealer at
    an  Illinois  location)  during   the   12-month   period
    commencing  on  the  first day of the succeeding calendar
    quarter (the assessment period) shall pay  an  assessment
    equal  to  $0.0004  multiplied by the net market value of
    grain settled for (payment received for grain sold).
         (3)  The next assessment determination date  can  be
    no  sooner  than the first working day of the fourth full
    calendar  month  following  the  end  of  the  assessment
    period.
         (4)  "Net market value" of  grain  means  the  gross
    sales  price of that grain adjusted by application of the
    grain dealer's discount schedule in effect at the time of
    sale and  after  deduction  of  any  statutory  commodity
    check-offs. Other charges such as storage charges, drying
    charges,  and  transportation costs shall not be deducted
    in arriving at the net market value of grain  sold  to  a
    grain  dealer.  The  net  market  value of grain shall be
    determined from the settlement sheet or other  applicable
    written  evidence  of  the  sale  of  grain  to the grain
    dealer.
         (5)  All assessments under this subsection (f) shall
    commence  on  the  first  day  of  the  calendar  quarter
    immediately following the assessment  determination  date
    and  shall  continue  for  a  period  of  12  consecutive
    calendar  months.  The  assessments shall be collected by
    licensees at the time of settlement during the assessment
    period,  and  shall  be  remitted  by  licensees  to  the
    Department by the twentieth day of each calendar quarter,
    commencing with the second calendar quarter following the
    assessment determination date. The Department shall  give
    written  notice  to  all  licensees of when an assessment
    under this subsection (f) is to begin and  end,  and  the
    appropriate  level  of  the assessment, by mail within 20
    days after the assessment determination date.
         (6)  Assessments under  this  subsection  (f)  apply
    only  to  grain  for  which settlement is made during the
    assessment period, without regard to the date  the  grain
    was sold to the licensee.
         (7)  The  collection  and  remittance of assessments
    from first sellers of grain under this subsection (f)  is
    the  sole  responsibility  of  the  licensees to whom the
    grain is sold. Sellers of grain shall not be penalized by
    reason of any licensee's  failure  to  comply  with  this
    subsection  (f).  Failure  of  a  licensee to collect any
    assessment shall not relieve the grain seller from paying
    the assessment, and the grain seller shall promptly remit
    the uncollected assessments upon demand by the  licensee,
    which  may  be  accounted  for  in  settlement  of  grain
    subsequently  sold to that licensee. Licensees who do not
    collect assessments as required by this  subsection  (f),
    or  who  do not remit those assessments to the Department
    within the time deadlines  required  by  this  subsection
    (f),  shall  remit  the  amount  of  the assessments that
    should have  been  remitted  to  the  Department  and  in
    addition  shall  be  subject  to a monetary penalty in an
    amount not to exceed $1,000.
         (8)  Notwithstanding the other  provisions  of  this
    subsection  (f),  no  assessment  shall be levied against
    grain sold by the Department as a result of a failure.
    (g) Lender assessments.
         (1) Subject to the  provisions  of  this  subsection
    (g),  if  on  the first working day of a calendar quarter
    when a person is not already  subject  to  an  assessment
    under  this subsection (g) the equity in the Fund is less
    than $6,000,000, each person holding  warehouse  receipts
    issued from an Illinois location on grain owned or stored
    by  a licensee to secure a loan to that licensee shall be
    assessed a quarterly lender  assessment  for  each  of  4
    consecutive calendar quarters beginning with the calendar
    quarter  next  succeeding  the  assessment  determination
    date.
         (2) Each quarterly lender assessment shall be at the
    rate  of  $0.00000055  per  bushel  per  day  for bushels
    covered by a warehouse receipt held as security  for  the
    loan  during  that  calendar quarter times the applicable
    commodity price times the lender  assessment  multiplier,
    if  any,  determined by the Department in accordance with
    paragraph (3) of this subsection  (g).  With  respect  to
    each  calendar  quarter within the assessment period, the
    "applicable commodity price" shall be the  closing  price
    paid  by  the  licensee  on  the last working day of that
    calendar quarter for the base  commodity  for  which  the
    warehouse receipt was issued.
         (3)  With  respect  to  the second assessment period
    beginning after  June  30,  2003,  the  Department  shall
    determine  and apply a lender assessment multiplier equal
    to 250,000 divided by  the  aggregate  dollar  amount  of
    lender  assessments  imposed  under  this  subsection (g)
    under the first assessment period  beginning  after  June
    30,  2003.  With  respect  to the third assessment period
    beginning after  June  30,  2003,  the  Department  shall
    determine  and apply a lender assessment multiplier equal
    to 250,000 divided by the  average  of  aggregate  dollar
    amounts   of   lender   assessments  imposed  under  this
    subsection (g)  under  the  first  2  assessment  periods
    beginning after June 30, 2003. With respect to assessment
    periods  thereafter,  the  Department shall determine and
    apply a lender assessment  multiplier  equal  to  250,000
    divided  by  the  average  of the 3 most recent aggregate
    dollar amounts of lender assessments imposed  under  this
    subsection (g).
         (4) The next assessment determination date can be no
    sooner  than  the  first  working  day of the fourth full
    calendar  month  following  the  end  of  the  assessment
    period.
         (5) The Department shall give written notice by mail
    within 20 days after the assessment determination date to
    all licensees of when assessments under  this  subsection
    (g)  are  to  begin  and  end,  the  rate  of  the lender
    assessment, and the lender assessment multiplier, if any,
    that shall apply.
         (6) It is the responsibility of a licensee to inform
    each of its lenders and other persons by virtue of  whose
    relationship  with  the licensee this subsection (g) will
    apply as to the onset of an  assessment  for  which  that
    person   might   be  liable  and  the  applicable  lender
    assessment multiplier, if any. The notification  must  be
    in writing and, as to persons subject to assessment under
    this subsection (g) on the assessment determination date,
    must  be  sent  no  later than 20 days after the licensee
    receives notice of an assessment from the Department.  As
    to   persons   not   subject  to  assessment  under  this
    subsection (g) as of the assessment  determination  date,
    the  notice  shall  be  sent  or  given no later than the
    closing of any transaction subsequent to  the  assessment
    determination  date  involving the licensee and by virtue
    of which  transaction  the  person  is  made  subject  to
    assessment under this subsection (g).
         (7)  Within  20  days after the end of each calendar
    quarter within the assessment period, each licensee shall
    send to each lender with which  it  has  been  associated
    during  that  calendar  quarter  and  to the Department a
    written notice of quarterly assessment together with  the
    information   needed  to  determine  the  amount  of  the
    quarterly assessment owing with  respect  to  loans  from
    that lender. This information shall include the number of
    bushels  covered  by each warehouse receipt, organized by
    commodity, held as security for the loan  owing  to  that
    lender,  the  number  of  days  each  of  those warehouse
    receipts was outstanding during  that  calendar  quarter,
    the  applicable  commodity  price,  the applicable lender
    assessment  multiplier,  the  amount  of  the   resulting
    quarterly  lender  assessment,  and  the  due date of the
    quarterly assessment.
         (8) Each quarterly assessment shall be due and  paid
    by the lender or its designee to the Department within 20
    days  after  the end of the calendar quarter to which the
    assessment pertains.
         (9) Lenders shall not be penalized by reason of  any
    licensee's  failure  to  comply with this subsection (g).
    Failure of a licensee to comply with this subsection  (g)
    shall  not relieve the lender from paying the assessment,
    and the  lender  shall  promptly  remit  the  uncollected
    assessments  by  the  due date as set forth in the notice
    from the licensee.
         (10) This subsection (g) applies to any  person  who
    holds a grain warehouse receipt issued by a licensee from
    an   Illinois   location  pursuant  to  any  transaction,
    regardless of its form, that creates a security  interest
    in the grain including, without limitation, the advancing
    of  money  or  other  value  to  or  for the benefit of a
    licensee upon the licensee's issuance or negotiation of a
    grain warehouse receipt and pursuant to or in  connection
    with   an   agreement   between   the   licensee   and  a
    counter-party for the repurchase  of  the  grain  by  the
    licensee  or  designee  of  the licensee. For purposes of
    this  subsection  (g),  any  such  transaction  shall  be
    treated as one in which grain is held as security  for  a
    loan outstanding to a licensee within the meaning of this
    subsection  (g),  and such a person shall be treated as a
    lender.
         (11)  The Department shall immediately  deposit  all
    paid assessments under this subsection (g) into the Fund.
    (h)  Equity in the Fund shall exclude moneys owing to the
State or the Reserve Fund as a result  of  transfers  to  the
Fund  from the General Revenue Fund or the Reserve Fund under
subsection  (h)  of  Section   25-20.   Notwithstanding   the
foregoing,  for  purposes  of  calculating equity in the Fund
during  the  grain  seller  initial  assessment  period   and
assessing  grain sellers, it shall be presumed that the State
is owed, prior to repayment, only $2,000,000 and the  Reserve
Fund   contains   a   balance   of   $2,000,000.    Under  no
circumstances,  however,  shall  there   be   more   than   2
consecutive  grain  seller  assessments  during  the  initial
assessment period, unless there is a failure that reduces the
equity  in the Fund to below $3,000,000. Except for the first
assessment made under this  Section,  and  assessments  under
items  (c)(5),  (c)(6),  and  (c)(7)  of  this  Section,  all
assessments  shall  be  paid to the Department within 60 days
after the date posted on the written  notice  of  assessment.
The  Department  shall  forward  all  paid assessments to the
Fund.
(Source: P.A. 91-213, eff. 7-20-99.)

    (240 ILCS 40/10-5)
    Sec. 10-5.  Duties and requirements of licensees.
    (a)  Each licensee shall have adequate property insurance
covering grain in its  possession  or  custody  and  adequate
liability, property, theft, hazard, and workers' compensation
insurance.
         (1)  Every   insurance   policy   shall   contain  a
    provision that it will not be cancelled by the  principal
    or  the insurance company except on 60 days prior written
    notice  to  the  Director  and  the  principal   insured.
    Cancellation  of the policy does not affect the liability
    accrued or that may accrue under the  policy  before  the
    expiration  of the 60 days.  The notice shall contain the
    termination date.
         (2)  Each licensee shall keep  a  general  insurance
    account  showing  the  policy  number,  issuing  company,
    amount,  binding  date,  and expiration date of insurance
    coverage and the property covered by insurance.
         (3)  In reference to a warehouseman, notwithstanding
    any provision to the contrary contained in the  warehouse
    receipts  involved,  a  warehouseman  is not obligated to
    provide   property   insurance   on   Commodity    Credit
    Corporation  grain ("CCC-owned grain"). The warehouseman,
    however, shall continue to carry the  insurance  required
    on loan grain that becomes CCC-owned grain until the date
    stated  in  a  written  notice  from  CCC  or  its  agent
    instructing  the  warehouseman to cancel the insurance on
    the grain as of that date.  If  CCC-owned  grain  is  not
    covered  by property insurance, recovery by the Commodity
    Credit Corporation from the Fund shall be reduced by  the
    amount  of  property  insurance  proceeds that would have
    been available to cover any loss to CCC-owned  grain  had
    the CCC-owned grain been covered by property insurance.
    (b)  A  licensee  shall immediately notify the Department
when  there  is  a  change  of  management  or  cessation  of
operations or change in fiscal year end.
    (c)  All grain trades, grain merchandising  transactions,
grain  origination  plans  and  programs, and transactions or
arrangements that represent or reflect rights and obligations
in grain must be clearly  identified  and  disclosed  in  the
books  and records of the licensee, for audit and examination
purposes.
(Source: P.A. 89-287, eff. 1-1-96.)

    (240 ILCS 40/10-10)
    Sec. 10-10.  Duties and requirements of grain dealers.
    (a)  Long and short market position.
         (1)  Grain dealers shall at all  times  maintain  an
    accurate  and  current  long  and  short  market position
    record for each grain  commodity.   The  position  record
    shall  at a minimum contain the net position of all grain
    owned, wherever located, grain purchased  and  sold,  and
    any grain option contract purchased or sold.
         (2)  Grain  dealers,  except grain dealers regularly
    and  continuously  reporting  to  the  Commodity  Futures
    Trading Commission or grain dealers who have obtained the
    permission of the Department to have different open  long
    or  short market positions, may maintain an open position
    in the grain commodity of which the grain dealer buys the
    greatest number of bushels per fiscal year not to  exceed
    one bushel for each $10 of adjusted equity at fiscal year
    end  up  to a maximum open position of 50,000 bushels and
    one-half that number of bushels up to 25,000 bushels  for
    all other grain commodities that the grain dealer buys. A
    grain  dealer,  however, may maintain an open position of
    up to  5,000 bushels for each grain commodity  the  grain
    dealer buys.
    (b)  The  license  issued  by  the  Department to a grain
dealer shall  be  posted  in  the  principal  office  of  the
licensee  in  this  State.   A certificate shall be posted in
each location where the licensee engages  in  business  as  a
grain dealer.  In the case of a licensee operating a truck or
tractor trailer unit for the purpose of purchasing grain, the
licensee  shall  have  a certificate carried in each truck or
tractor trailer unit used in connection with  the  licensee's
grain dealer business.
    (c)  The  licensee  must  have  at  all  times sufficient
financial resources to pay  producers  on  demand  for  grain
purchased from them.
    (d)  A  licensee that is solely a grain dealer shall on a
daily basis maintain an  accurate  and  current  daily  grain
transaction report.
    (e)  A  licensee  that  is  both  a  grain  dealer  and a
warehouseman shall at all  times  maintain  an  accurate  and
current daily position record.
    (f)  In  the  case  of  a  change of ownership of a grain
dealer, the obligations of a grain dealer do not cease  until
the  grain  dealer  has  surrendered  all  unused price later
contracts to the Department and the successor has executed  a
successor's  agreement  that is acceptable to the Department,
or  the  successor  has  otherwise  provided  for  the  grain
obligations of its predecessor in a manner that is acceptable
to the Department.
    (g)  If a grain dealer proposes to cease  doing  business
as  a  grain dealer and there is no successor, it is the duty
of the grain dealer  to  surrender  all  unused  price  later
contracts  to  the  Department,  together  with  an affidavit
accounting for all grain dealer obligations setting forth the
arrangements made with producers for final disposition of the
grain dealer obligations and  indicating  the  procedure  for
payment  in full of all outstanding grain obligations.  It is
the duty of the Department to give notice by publication that
a grain dealer has ceased doing business without a successor.
After payment in full of all outstanding  grain  obligations,
it is the duty of the grain dealer to surrender its license.
(Source: P.A. 91-213, eff. 7-20-99.)
    (240 ILCS 40/10-15)
    Sec. 10-15.  Price later contracts.
    (a)  Price  later  contracts  shall  be  written on forms
prescribed or authorized  by  the  Department.   Price  later
contract  forms  shall  be  printed by a person authorized to
print those contracts by the Department after that person has
agreed to comply with each of the following:
         (1)  That all price later contracts shall be printed
    as  prescribed by the Department  and  shall  be  printed
    only for a licensed grain dealer.
         (2)  That   all   price  later  contracts  shall  be
    numbered consecutively and a  complete  record  of  these
    contracts  shall be retained showing for whom printed and
    the consecutive numbers printed on the contracts.
         (3)  That a duplicate copy of all invoices  rendered
    for  printing  price  later  contracts that will show the
    consecutive numbers printed on  the  contracts,  and  the
    number  of contracts printed, shall be promptly forwarded
    to the Department.
         (4)  that  the  person  shall  register   with   the
    Department  and pay an annual registration fee of $100 to
    print price later contracts.
    (b)  A grain  dealer  purchasing  grain  by  price  later
contract  shall  at  all  times  own  grain, rights in grain,
proceeds from the sale of grain, and other assets  acceptable
to  the  Department as set forth in this Code totaling 90% of
the unpaid balance of  the  grain  dealer's  obligations  for
grain  purchased  by price later contract.  That amount shall
at all times remain unencumbered and shall be represented  by
the aggregate of the following:
         (1)  Grain owned by the grain dealer valued by means
    of  the  hedging  procedures method that includes marking
    open contracts to market.
         (2)  Cash on hand.
         (3)  Cash held on  account  in  federally  or  State
    licensed financial institutions.
         (4)  Investments   held   in   time   accounts  with
    federally or State licensed financial institutions.
         (5)  Direct obligations of the U.S. government.
         (6)  Funds on deposit in grain margin accounts.
         (7)  Balances due or to become due to  the  licensee
    on price later contracts.
         (8)  Marketable securities, including mutual funds.
         (9)  Irrevocable  letters  of credit in favor of the
    Department and acceptable to the Department.
         (10)  Price later contract service charges due or to
    become due to the licensee.
         (11)  Other evidence of proceeds from  or  of  grain
    that is acceptable to the Department.
    (c)  For  the  purpose  of  computing the dollar value of
grain  and  the  balance  due   on   price   later   contract
obligations,  the  value  of  grain  shall  be figured at the
current market price.
    (d)  Title to grain sold by price  later  contract  shall
transfer  to  a  grain  dealer  at  the  time  on the date of
delivery of the grain.  Therefore, no storage  charges  shall
be  made  with  respect  to  grain  purchased  by price later
contract.   A  service  charge  for  handling  the  contract,
however, may be made.
    (e)  Subject to subsection (f)  of  this  Section,  if  a
price  later  contract is not signed by all parties within 30
days of the last date of delivery of  grain  intended  to  be
sold  by  price later contract, then the grain intended to be
sold by price later contract shall  be  priced  on  the  next
business  day after 30 days from the last date of delivery of
grain intended to be sold by  price  later  contract  at  the
market  price  of the grain at the close of the next business
day after the 29th day. When the grain is priced  under  this
subsection,  the grain dealer shall send notice to the seller
of the grain within 10 days. The  notice  shall  contain  the
number  of bushels sold, the price per bushel, all applicable
discounts, the net proceeds, and a notice  that  states  that
the  Grain  Insurance  Fund  shall  provide  protection for a
period of only 160 days from  the  date  of  pricing  of  the
grain.
    In  the  event of a failure, if a price later contract is
not signed  by  all  the  parties  to  the  transaction,  the
Department  may  consider the grain to be sold by price later
contract if a preponderance of  the  evidence  indicates  the
grain was to be sold by price later contract.
    (f)  If  grain  is  in storage with a warehouseman and is
intended to be sold by price later contract, that grain shall
be considered as remaining in storage and not be deemed  sold
by  price  later  contract  until  the  date  the price later
contract is signed by all parties.
    (g)  Scale  tickets  or  other  approved  documents  with
respect to grain purchased by a grain dealer by  price  later
contract  shall  contain  the  following:  "Sold Grain; Price
Later".
    (h)  Price later contracts shall be issued  consecutively
and recorded by the grain dealer as established by rule.
    (i)  A licensee grain dealer shall not issue a collateral
warehouse  receipt  on  grain  purchased  by  a  price  later
contract  to  the extent the purchase price has not been paid
by the licensee grain dealer.
    (j)  Failure to comply  with  the  requirements  of  this
Section may result in suspension of the privilege to purchase
grain by price later contract for up to one year.
    (k)  When  a producer with a price later contract selects
a price for all or any part of the grain represented by  that
contract,  then  within  5  business  days  after  that price
selection,  the  licensee  shall  mail  to  that  producer  a
confirmation of the price selection, clearly  and  succinctly
indicating the price selected.
(Source: P.A. 91-213, eff. 7-20-99.)

    (240 ILCS 40/10-20)
    Sec. 10-20.  Duties and requirements of warehouseman.
    (a)  It  is the duty of every warehouseman to receive for
storage any grain that may be tendered to it in the  ordinary
course of business so far as the licensed storage capacity of
the  warehouse  permits  and  if  the  grain  is  of  a  kind
customarily  stored  by  the  warehouseman and is in suitable
condition for storage.
         (1)  If the condition of grain offered  for  storage
    might  adversely  affect  the  condition  of grain in the
    warehouse, a warehouseman need not receive the grain  for
    storage,  but  if  a warehouseman does receive the grain,
    then it must be stored in a manner that  will  not  lower
    the grade of other grain in the warehouse.
         (2)  A    warehouseman   shall   provide   competent
    personnel and equipment to weigh and grade all  grain  in
    and out of storage.
         (3)  A  warehouseman  shall  maintain  all  licensed
    warehouse facilities in a manner suitable to preserve the
    quality and quantity of grain stored.
    (b)  For the purposes of the Department's examinations, a
warehouseman  shall  provide  and  maintain safe and adequate
means of ingress and egress to the  various  and  surrounding
areas  of  the  facilities, storage bins, and compartments of
the warehouse.
    (c)  Except as provided in this item (c), a  warehouseman
shall  at  all  times  have a sufficient quantity of grain of
like  kind  and  quality  to  meet  its  outstanding  storage
obligations. For purposes of this  Section,  "like  kind  and
quality"  means  the  type  of commodity and a combination of
grade, specialty traits, if any, and class  or  sub-class  as
applicable.
    (d)  A  warehouseman  shall  not store grain in excess of
the capacity for which it is licensed.
    (e)  A  warehouseman  may  redeposit   grain   from   its
warehouse with another warehouseman or a federal warehouseman
in an  additional quantity not to exceed the licensed storage
capacity of its own warehouse.
         (1)  If  grain  is  redeposited  as provided in this
    Section,  a  warehouseman  must  retain  the  receipt  it
    obtains from the second  warehouseman  as  proof  of  the
    redeposit   and   retain   sufficient  control  over  the
    redeposited  grain  as  is  necessary  to   comply   with
    directions    of   the   original   depositor   regarding
    disposition of the redeposited grain.
         (2)  While grain is en route from  the  redepositing
    warehouseman  to  the second warehouseman, a redepositing
    warehouseman must retain an original or a duplicate  bill
    of  lading  instead  of and until such time as it obtains
    possession  of  the  warehouse  receipt   as   proof   of
    disposition of the redeposited grain.
    (f)  Schedule of rates and licenses.
         (1)  A warehouseman shall file its schedule of rates
    with  the Department and shall post its warehouse license
    and a copy of the schedule of  rates  on  file  with  the
    Department in a conspicuous place in each location of the
    warehouseman where grain is received.
         (2)  The  schedule  of  rates  shall  be  on  a form
    prescribed by the Department and shall include the  names
    and  genuine signatures of all persons authorized to sign
    warehouse receipts issued by the warehouseman.
         (3)  To change the schedule of rates or the name  of
    any  person  authorized  to  sign  warehouse  receipts, a
    warehouseman must file  with  the  Department  a  revised
    schedule  of  rates  and,  thereafter,  post  the revised
    schedule of rates at each location  of  the  warehouseman
    where  grain  is received.  The revised schedule of rates
    shall be deemed filed with the Department on the  earlier
    of  the  date it is delivered to the Department or mailed
    to the Department by certified  mail  properly  addressed
    with  sufficient  postage attached.  The revised schedule
    of rates shall be effective on the date the  schedule  of
    rates   is  posted  after  delivery  or  mailing  to  the
    Department in  accordance  with  this  Section.   Revised
    schedules  of  rates  shall apply only to grain delivered
    for storage after  the  effective  date  of  the  revised
    schedule  of  rates.   No grain in storage at the time of
    the effective date of a revised schedule of  rates  shall
    be  subject to a revised schedule of rates until one year
    after the date of delivery  of  grain,  unless  otherwise
    provided by a written contract.
         (4)  The  schedule  of  rates  may  provide  for the
    negotiation of different rates for  large  deliveries  of
    grain  if  those  rates are applied on a uniform basis to
    all depositors under the same circumstances.
    (g)  A warehouseman may refuse to  accept  grain  if  the
identity  of the grain is to be preserved.  If a warehouseman
accepts grain  and  the  identity  of  the  grain  is  to  be
preserved,  the  evidence  of storage shall state on its face
that the grain is stored with its identity preserved and  the
location of that grain.
    (h)  A  warehouseman  shall  at  all  times  maintain  an
accurate and current daily position record on a daily basis.
    (i)  In the case of a change of ownership of a warehouse,
the  obligations  of  a  warehouseman  do not cease until its
successor is properly licensed under this Code or the  United
States Warehouse Act, it has surrendered all unused warehouse
receipts  to  the  Department  and has executed a successor's
agreement, or the successor has otherwise  provided  for  the
obligations of its predecessor.
    (j)  If  a  warehouseman proposes to cease doing business
as a warehouseman and there is no successor, it is  the  duty
of   the  warehouseman  to  surrender  all  unused  warehouse
receipts  to  the  Department,  together  with  an  affidavit
accounting for  all  warehouse  receipts  setting  forth  the
arrangements  made  with  depositors for final disposition of
the grain in storage and indicating the procedure for payment
in full of all outstanding obligations. After payment in full
of all  outstanding  obligations,  it  is  the  duty  of  the
warehouseman to surrender its license.
    (k)  Requests by a warehouseman for special examinations,
grain   inventory   computation,  or  verification  of  grain
quantity or quality shall be accompanied by a fee of $200.
    (l)  Nothing in this Section  is  deemed  to  prohibit  a
warehouseman from entering into agreements with depositors of
grain relating to allocation or reservation of storage space.
(Source: P.A. 89-287, eff. 1-1-96.)

    (240 ILCS 40/15-15)
    Sec. 15-15.  Violations of open position limits.
    (a)  Violations of maximum allowable open position limits
by  more  than  1,000 bushels but less than twice the maximum
allowable open position limits.
         (1)  If a licensee violates  the  maximum  allowable
    open  position limits of item (a)(2) of Section 10-10 and
    the open position is more than  1,000  bushels  but  less
    than  twice  the  maximum allowable open position limits,
    the licensee shall be required to:
              (A)  Post collateral with the Department in  an
         amount   equal  to  $1 per bushel for each bushel of
         soybeans in excess of  the  maximum  allowable  open
         position  limits  and  50  cents  per bushel of each
         bushel for all other grain in excess of the  maximum
         allowable  open position limits or $2,500, whichever
         is greater; and
              (B)   Pay a penalty in an amount not to  exceed
         $250.
         (2)  If a licensee commits 2 violations as set forth
    in  item (a) (1) of Section 15-10 within a 2 year period,
    the licensee must:
              (A)  post collateral with the Department in  an
         amount  equal  to  $1  per bushel for each bushel of
         soybeans in excess of  the  maximum  allowable  open
         position  limits  and  50  cents  per bushel of each
         bushel for all other grain in excess of the  maximum
         allowable  open position limits or $5,000, whichever
         is greater; and
              (B)  pay a penalty in the amount of $750 $500.
         (3)  If a licensee commits 3 or more  violations  as
    set forth in item (a)(1) of Section 15-10 within a 5 year
    period, the licensee must:
              (A)  post  collateral with the Department in an
         amount equal to $2 per bushel  for  each  bushel  of
         soybeans  in  excess  of  the maximum allowable open
         position limits and $1 per bushel of each bushel for
         all other grain in excess of the  maximum  allowable
         open   position  limits  or  $10,000,  whichever  is
         greater; and
              (B)  pay a penalty in an  amount  greater  than
         $2,000 $1,000 but less than $20,000 $10,000.
    (b)  Violations of maximum allowable open position limits
that  equal  or  exceed  twice  the  maximum  allowable  open
position.
         (1)  If  a  licensee  violates the maximum allowable
    open position limits of item (a)(2) of Section 10-10  and
    the  open  position  equals  or exceeds twice the maximum
    allowable open position limits, the licensee must:
              (A)  post collateral with the Department in  an
         amount  equal  to  $1  per bushel for each bushel of
         soybeans in excess of  the  maximum  allowable  open
         position  and 50 cents per bushel for each bushel of
         all other grain in excess of the  maximum  allowable
         open   position   limits  or  $5,000,  whichever  is
         greater; and
              (B)  pay a penalty in the amount of $500.00.
         (2)  If a licensee commits 2 violations as set forth
    in item (b)(1) of Section 15-10 within a 2  year  period,
    the licensee must:
              (A)  post  collateral with the Department in an
         amount equal to $2 per bushel  for  each  bushel  of
         soybeans  in  excess  of  the maximum allowable open
         position limits and $1 per bushel for each bushel of
         all other grain in excess of the  maximum  allowable
         open  position  limits  or    $10,000,  whichever is
         greater; and
              (B)  pay a penalty in an  amount  greater  than
         $750 $500 but less than $15,000 $10,000.
         (3)  If  a  licensee commits 3 or more violations as
    set forth in item (b)(1) of Section 15-5 within a 5  year
    period, the licensee must:
              (A)  post  collateral with the Department in an
         amount equal to $2 per bushel  for  each  bushel  of
         soybeans  in  excess  of  the maximum allowable open
         position limits and $1 per bushel  for  each  bushel
         for  all  other  grain  in  excess  of  the  maximum
         allowable open position limits or $10,000, whichever
         is greater; and
              (B)  pay  a  penalty  in an amount greater than
         $2,000 $1,000 but less than $20,000 $10,000.
(Source: P.A. 89-287, eff. 1-1-96.)
    (240 ILCS 40/15-20)
    Sec. 15-20.  Grain quantity and grain quality violations.
    (a)  Grain quantity deficiencies of more than $1,000  but
less than $20,000.
         (1)  If  a  licensee  fails  to  have  a  sufficient
    quantity  of  grain  in store to meet outstanding storage
    obligations  and  the  value  of   the   grain   quantity
    deficiency  as  determined  by  the  formula set forth in
    subsection (c) of Section 15-20 is more than  $1,000  but
    less than $20,000, the licensee must:
              (A)  post  collateral with the Department in an
         amount equal to the  value  of  the  grain  quantity
         deficiency or $2,500, whichever is greater; and
              (B)  pay a penalty of $250.
         (2)  If a licensee commits 2 violations as set forth
    in  item  (a)(1) of Section 15-20 within a 2 year period,
    the licensee must:
              (A)  post collateral with the Department in  an
         amount  equal  to  the  value  of the grain quantity
         deficiency or $10,000, whichever is greater; and
              (B)  pay a penalty of $750 $500.
         (3)  If a licensee commits 3 or more  violations  as
    set forth in item (a)(1) of Section 15-20 within a 5 year
    period, the licensee must:
              (A)  post  collateral with the Department in an
         amount equal to the  value  of  the  grain  quantity
         deficiency or $20,000, whichever is greater; and
              (B)  pay  a  penalty  of  no  less  than $2,000
         $1,000 and no greater than $20,000 $10,000.
    (b)  Grain quantity deficiencies of $20,000 or more.
         (1)  If a licensee fails to have sufficient quantity
    of grain in store to meet outstanding storage obligations
    and  the  value  of  the  grain  quantity  deficiency  as
    determined by the formula set forth in subsection (c)  of
    Section  15-20  equals  or  exceeds $20,000, the licensee
    must:
              (A)  post collateral with the Department in  an
         amount  equal  to  twice  the  value  of  the  grain
         quantity deficiency; and
              (B)  pay a penalty of $500.
         (2)  If a licensee commits 2 violations as set forth
    in  item  (b)(1) of Section 15-20 within a 2 year period,
    the licensee must:
              (A)  post collateral with the Department in  an
         amount  equal  to  twice  the  value  of  the  grain
         quantity   deficiency   or   $20,000,  whichever  is
         greater; and
              (B)  pay a penalty of no less  than  $750  $500
         and no greater than $15,000 $10,000.
         (3)  If  a  licensee commits 3 or more violations as
    set forth in item (b)(1) of Section 15-20 within a 5 year
    period, the licensee must:
              (A)  post collateral with the Department in  an
         amount  equal  to  twice  the  value  of  the  grain
         quantity   deficiency   or   $40,000,  whichever  is
         greater; and
              (B)  pay a  penalty  of  no  less  than  $2,000
         $1,000 and no greater than $20,000 $10,000.
    (c)  To   determine  the  value  of  the  grain  quantity
deficiency for the purposes of this Section, the  rate  shall
be $1 per bushel for soybeans and 50 cents per bushel for all
other grains.
    (d)  If  a  licensee  fails to have sufficient quality of
grain in store to meet outstanding storage  obligations  when
the value of the grain quality deficiency exceeds $1,000, the
licensee  must  post  collateral  with  the  Department in an
amount equal to the value of the  grain  quality  deficiency.
For  the  purposes  of  this  Section, the value of the grain
quality deficiency shall be determined by applying prevailing
market discount factors to all grain quality factors.
(Source: P.A. 89-287, eff. 1-1-96; 89-463, eff. 5-31-96.)

    (240 ILCS 40/15-30)
    Sec. 15-30.  Financial and record  keeping  deficiencies;
collateral and guarantees.
    (a)  An   applicant   or   a  licensee  has  a  financial
deficiency  if  it  does  not  meet  the  minimum   financial
requirements  of  Section  5-25 and subsection (b) of Section
10-15 of this Code.
    (b)  A  licensee   must   collateralize   all   financial
deficiencies  at the rate of one dollar's worth of collateral
for each dollar of the aggregate sum of the individual  ratio
deficiencies,  the  net  worth  deficiencies,  and  90% asset
requirement deficiencies.
    (c)  A licensee who  is  found  to  have  record  keeping
deficiencies,  other  than  in reference to violations as set
forth in subsection (b) of  Section  10-15  and  in  Sections
15-15  and  15-20,  may be required by the Department to post
collateral up to the amount of $10,000.
    (d)  If an applicant for a new license or a renewal of  a
license  has  financial  deficiencies  or  the Department has
reason  to  believe  that  the  financial  stability  of   an
applicant  or  a  licensee is in question, the Department may
require the applicant or licensee to provide the  Department,
in  addition  to  collateral,  personal,  corporate, or other
related  person  guarantees  in  a  form  and  in  an  amount
satisfactory to the Department.
    (e)  Subject to  subsection  (c)  of  Section  5-15,  the
posting of collateral and the delivery of guarantees does not
relieve  a licensee of the continuing obligation to otherwise
comply with the requirements imposed by the Code.
(Source: P.A. 89-287, eff. 1-1-96.)
    (240 ILCS 40/15-35)
    Sec. 15-35.  Return of collateral and guarantees.  If the
next fiscal year's financial statement of a licensee received
by  the  Department  and  an  examination  performed  by  the
Department  after  delivery  or  posting  of   any   required
collateral  or  the  guarantee  indicates  compliance  by the
licensee with all statutory requirements  of  this  Code  for
which  the  collateral  and  guarantees  were  required,  the
collateral  and  guarantee shall be returned within 90 days a
reasonable period of time to the licensee and  the  guarantor
following  a  written  request for the return.  The financial
statement must comply with the requirements of Section 5-20.
(Source: P.A. 89-287, eff. 1-1-96.)

    (240 ILCS 40/15-40)
    Sec. 15-40.  Suspension and revocation of license.
    (a)  The  Director  may  suspend  a  license   and   take
possession  and control of all grain assets and equity assets
(except that the  Department  may  not  take  possession  and
control  of  any equity asset on which there is a valid prior
perfected security interest or other  valid  prior  perfected
lien  without  the  prior,  written permission of the secured
party or lien  holder)  of  the  suspended  licensee  if  the
Department  has  reason  to believe that any of the following
has occurred:
         (1)  A licensee has made  a  formal  declaration  of
    insolvency;  failed to apply for license renewal, leaving
    indebtedness to  claimants;  or  been  denied  a  license
    renewal,  leaving indebtedness to claimants experienced a
    failure or is unable to financially satisfy claimants  in
    accordance with applicable statute, rule, or agreement if
    a  bona  fide dispute does not exist between the licensee
    and a claimant.
         (2)  A licensee has failed to  pay  a  producer,  on
    demand,  for grain purchased from that producer, assuming
    no bona fide dispute exists with regard to the payment.
         (3)  A licensee is otherwise unable  to  financially
    satisfy  claimants  in  accordance  with  any  applicable
    statute, rule, or agreement, assuming a bona fide dispute
    does not exist between the licensee and the claimant.
         (4)  A  licensee  has  violated  any  of  the  other
    provisions of this Code and the violation, or the pattern
    of  the  violations,  would  create a substantial risk of
    failure violated any of the provisions of this  Code  and
    the  violation or the pattern of the violations indicates
    an immediate danger of loss to potential claimants.
         (5) (3)  A  licensee  has  failed  fails  to  pay  a
    penalty or post  collateral or  guarantees  by  the  date
    ordered by the Director.
         (6) (4)  A  licensee  has  failed  fails  to  pay an
    assessment as required by Section 5-30.
    (b)  The Director may revoke a  license  if  any  of  the
following   occurs:   (1)  the   Director   finds,  after  an
administrative  hearing,  that  any  of   the   grounds   for
suspension  under  item  (a)(1),  (a)(2),  (a)(3), or (a)(4),
(a)(5), or (a)(6) of Section 15-40 have occurred.
    (c) (2)  When a licensee voluntarily files for bankruptcy
under the federal bankruptcy laws, that filing constitutes  a
revocation of the license of the licensee on the day that the
filing occurs.
    (d) (3)  When an order for relief is entered in reference
to  a licensee as a consequence of a petition for involuntary
bankruptcy filed under  the  federal  bankruptcy  laws,  that
order  constitutes a revocation of the license on the date of
that order.
    (e) (c)   Within 10 days after suspension of  a  license,
an  administrative  hearing  shall  be commenced to determine
whether the license shall be reinstated or revoked.  Whenever
an administrative hearing is scheduled, the licensee shall be
served with written notice of the date, place,  and  time  of
the  hearing  at  least  5 days before the hearing date.  The
notice may be served by personal service on the  licensee  or
by mailing it by registered or certified mail, return receipt
requested, to the licensee's place of business.  The Director
may,  after  a  hearing,  issue  an  order either revoking or
reinstating the license.
(Source: P.A. 89-287, eff. 1-1-96.)

    (240 ILCS 40/15-45)
    Sec. 15-45.  Criminal offenses.
    (a)  A person who causes a warehouse receipt for grain to
be issued knowing that the grain  for  which  that  warehouse
receipt  is issued is not under the licensee's control at the
time of issuing that  warehouse  receipt,  or  who  causes  a
licensee  to issue a warehouse receipt for grain knowing that
the warehouse receipt contains any false  representation,  is
guilty of a Class 2 3 felony.
    (b)  A   person   who,   knowingly   and  without  lawful
authority,  disposes  of  grain  represented  by  outstanding
warehouse  receipts  or  covered   by   unreceipted   storage
obligations is guilty of a Class 2 3 felony.
    (c)  A   person   who,   knowingly   and  without  lawful
authority:
         (1)  withholds records from the Department;
         (2)  keeps, creates, or files  with  the  Department
    false, misleading, or inaccurate records;
         (3)  alters   records   without  permission  of  the
    Department; or
         (4)  presents to the Department any materially false
    or misleading records;
is guilty of a Class 2 3 felony.
    (d)  A licensee who, after suspension  or  revocation  of
its license, knowingly and without legal authority refuses to
surrender  to the Department all books, accounts, and records
relating to the  licensee  that  are  in  its  possession  or
control is guilty of a Class 2 3 felony.
    (e)  A   licensee   who   knowingly  impedes,  obstructs,
hinders, or otherwise prevents or  attempts  to  prevent  the
Director  from  performing his or her duties under this Code,
or  who  knowingly  refuses  to  permit  inspection  of   its
premises,  books,  accounts, or records by the Department, is
guilty of a Class A misdemeanor.
    (f)  A person  who,  knowingly  and  without  a  license,
engages  in  the business of a grain dealer or a warehouseman
for which a license is required under the Code is guilty of a
Class A misdemeanor.
    (g)  A person who, intentionally, knowingly  and  without
lawful authority:
         (1)  fails to maintain sufficient assets as required
    by subsection (b) of Section 10-15; or
         (2)  issues  a collateral warehouse receipt covering
    grain purchased by a price later contract to  the  extent
    the purchase price has not been paid by the grain dealer;
is guilty of a Class 3 4 felony.
    (h)  In  case  of  a  continuing  violation,  each  day a
violation occurs constitutes a separate and distinct offense.
(Source: P.A. 89-287, eff. 1-1-96.)

    (240 ILCS 40/20-10)
    Sec. 20-10.  Lien on grain assets and equity assets.
    (a)  A statutory lien  shall  be  imposed  on  all  grain
assets and equity assets in favor of and to secure payment of
obligations of the licensee to:
         (1)  A  person,  including,  without  limitation,  a
    lender:
              (A)  who  possesses  warehouse  receipts issued
         from an Illinois warehouse location  covering  grain
         owned or stored by a warehouseman;
              (B)  who   has  other  written  evidence  of  a
         storage obligation of a warehouseman issued from  an
         Illinois  warehouse location in favor of the holder,
         including,  but  not  limited  to,  scale   tickets,
         settlement sheets, and ledger cards; or
              (C)  who has loaned money to a warehouseman and
         was  to receive a warehouse receipt from an Illinois
         location as security for that loan,  who surrendered
         warehouse receipts as a part of a grain sale  at  an
         Illinois location, or who has delivered grain out of
         storage  with  the warehouseman as a part of a grain
         sale at an Illinois location and:
                   (i)  the  grain  dealer  or   warehouseman
              experienced    a   failure   within   21   days
              thereafter, a warehouse receipt was not issued,
              and payment in full was not made; or
                   (ii)  written  notice  was  given  by  the
              person  to  the  Department  within   21   days
              thereafter stating that a warehouse receipt was
              not issued and payment in full was not made.
         (2)  A  producer  who possesses evidence of the sale
    at an Illinois location of grain delivered to that failed
    a grain dealer, or its designee, and who  was  not  fully
    paid in full.
    This statutory lien arises, attaches, and is perfected at
the  date  of  delivery  of grain, and is at that time deemed
assigned by the operation of this Code to the Department.
    (b)  The lien on grain assets created under this  Section
shall  be preferred and prior to any other lien, encumbrance,
or security interest relating to those  assets  described  in
the  definition of "grain assets" in Section 1-10, regardless
of  the  time  the  other  lien,  encumbrance,   or  security
interest attached or became perfected.  The  lien  on  equity
assets created under this Section shall also be preferred and
prior  to  any  other lien, encumbrance, or security interest
relating to "equity assets" as defined in Section 1-10 to the
extent a creditor does not have a valid security interest in,
or other lien on, the property that was  perfected  prior  to
the  date  of  failure  of  the  licensee. The lien on equity
assets  created  under  this  Section,  however,   shall   be
subordinate  and  subject  to any other lien, encumbrance, or
security interest relating to "equity assets" as  defined  in
Section  1-10  to  the extent a creditor has a valid security
interest in or other valid lien  on  the  property  that  was
perfected  prior  to  the  date  of  failure of the licensee;
provided, however, that a creditor is not deemed  to  have  a
valid  security  interest  or other valid lien on property if
(i) the property can be directly traced  as  being  from  the
sale  of  grain  by the licensee or failed licensee; (ii) the
security interest  was  taken  as  additional  collateral  on
account of an antecedent debt owed to the creditor; and (iii)
the  security  interest or other lien was perfected (A) on or
within 90 days before the date of failure of the licensee  or
(B) when the creditor is a related person, within one year of
the date of failure of the licensee.
    (c)  To  the  extent  any  portion of this Code conflicts
with  any  portion  of  the  Uniform  Commercial  Code,   the
provisions of this Code control.
    (d)  If an adversarial proceeding is commenced to recover
"grain  assets"  or "equity assets" upon which a lien created
under this Section is imposed and if the Department  declines
to  take part in that adversarial proceeding, the Department,
upon application to  the  Director  by  any  claimant,  shall
assign  to  the  claimant  the  statutory  lien to permit the
claimant to pursue the lien in  the  adversarial  proceeding,
but  only  if  the assignment and adversarial proceeding will
not delay the Department's liquidation  and  distribution  of
grain  assets,  equity  assets,  collateral,  and guarantees,
including proceeds thereof, to all  claimants  holding  valid
claims.
(Source: P.A. 89-287, eff. 1-1-96.)

    (240 ILCS 40/20-15)
    Sec.  20-15.   Liquidation  procedures.   When a licensee
experiences a failure, the Department has  the  authority  to
and shall:
    (a)  Immediately  post  notice  at  all  locations of the
failed licensee stating that the licensee has  experienced  a
failure  and  that  the license has been terminated and is no
longer effective.
    (b)  Immediately take physical control and possession  of
the  failed licensee's facility, including but not limited to
all offices and grain storage facilities, books, records, and
any other property necessary or desirable to liquidate  grain
assets and equity assets.
    (c)  Give  public  notice  and notify all known potential
claimants by certified mail of the licensee's failure and the
processes necessary to file grain claims with the  Department
as set forth in Section 25-5.
    (d)  Perform an examination of the failed licensee.
    (e)  Seize  and  take  possession of, protect, liquidate,
and collect upon all grain assets, collateral, and guarantees
of or  relating  to  the  failed  licensee  and  deposit  the
proceeds  into  the Trust Account. If at any time it appears,
however, in the judgment of the Department that the costs  of
seizing  and  taking  possession of, protecting, liquidating,
and  collecting  upon  any  or  all  of  the  grain   assets,
collateral,  and  guarantees  equals  or exceeds the expected
recovery to the Department, the Department may elect  not  to
pursue   seizing   and   taking  possession  of,  protecting,
liquidating, and collecting upon any or all of the assets.
    (f)  Seize, take possession of, protect,  liquidate,  and
collect  upon  the  equity  assets of the failed licensee and
deposit the proceeds into the Trust account if the Department
has first obtained the  written  consent  of  all  applicable
secured  parties  or lien holders, if any.  If at any time it
appears, however, in the judgment of the Department that  the
costs  of  seizing  and  taking  possession  of,  protecting,
liquidating,  and  collecting  upon  any or all of the equity
assets  equals  or  exceeds  the  expected  recovery  to  the
Department, the Department may elect not  to  pursue  seizing
and   taking  possession  of,  protecting,  liquidating,  and
collecting upon any or all of  the  equity  assets.   If  the
Department  does  not  otherwise  pursue  seizing  and taking
possession of, protecting, liquidating, and  collecting  upon
any  of  the  equity  assets,  the  Department  may  bring or
participate in  any  liquidation  or  collection  proceedings
involving  the applicable secured parties or other interested
party, if  any,  and  shall  have  the  rights  and  remedies
provided  by  law, including the right to enforce its lien by
any available judicial procedure.
    If an applicable secured party or lien  holder  does  not
consent  to  the  Department  seizing,  taking possession of,
liquidating,  or  collecting  upon  the  equity  assets,  the
secured party or  lien  holder  shall  have  the  rights  and
remedies provided by law or by agreement with the licensee or
failed  licensee, including the right to enforce its security
interest or lien by any available judicial procedure.
    (g)  Make available on demand to  an  applicable  secured
party  or  lien  holder  the  equity asset, to the extent the
Department seized or otherwise gained possession  or  control
of  the  equity  asset,  but the secured party or lien holder
does not consent to the Department liquidating and collecting
upon the equity asset.
(Source: P.A. 89-287, eff. 1-1-96.)

    (240 ILCS 40/20-20)
    Sec. 20-20.  Liquidation expenses.
    (a)  The Trustee shall pay from  the  Trust  Account  all
reasonable  expenses  incurred by the trustee on or after the
date of failure in  reference  to  seizing,  preserving,  and
liquidating  the grain assets, equity assets, collateral, and
guarantees of or relating to a  failed  licensee,  including,
but  not limited to, the hiring of temporary field personnel,
equipment  rental,  auction  expenses,  mandatory   commodity
check-offs, and clerical expenses.
    (b)  Except  as  to  claimants  holding valid claims, any
outstanding  indebtedness  of  a  failed  licensee  that  has
accrued before the date of failure shall not be paid  by  the
Trustee and shall represent a separate cause of action of the
creditor against the failed licensee.
    (c)  The  Trustee shall report all expenditures paid from
the Trust Account to the Corporation at least  annually.
    (d)  To the extent assets are available under  subsection
(g)  of  Section 25-20 and upon presentation of documentation
satisfactory to the Trustee, the Trustee shall transfer  from
the  Trust  Account  to  the Regulatory Fund an amount not to
exceed the expenses incurred by the Department in performance
of its duties under Article 20 of this Code, in reference  to
the failed licensee.
(Source: P.A. 89-287, eff. 1-1-96.)

    (240 ILCS 40/25-5)
    Sec. 25-5.   Adjudication of claims.  When a licensee has
experienced  a  failure,  the  Department  shall  process the
claims in the following manner:
    (a)  The Department shall publish once each  week  for  3
successive   weeks  in  at  least  3  newspapers  of  general
circulation within the county of the licensee, and shall mail
or deliver to  each  claimant  whose  name  and  post  office
address  are  known  or  are  reasonably ascertainable by the
Department, a notice stating:
         (1)  That the licensee has experienced a failure and
    the date of that failure.
         (2)  The place and post office address where  claims
    may be filed.
         (3)  The  procedure for filing claims, as determined
    by rule.
         (4)  That a claimant's claims shall be barred if not
    filed with the Department on or before the later of:
              (A)  the claim date, which  shall  be  90  days
         after the date of failure of the licensee; or
              (B)  7  days from the date notice was mailed to
         a claimant if the date notice  was  mailed  to  that
         claimant is on or before the claim date.
    (b)  Time of notice.
         (1)  The  first date of publication of the notice as
    provided for in subsection (a) of this Section  shall  be
    within 30 days after the date of failure.
         (2)  The   published   notice  as  provided  for  in
    subsection (a) of this Section shall be published  in  at
    least  3  newspapers  of  general circulation in the area
    formerly served by the failed licensee.
         (3)  The notice as provided for in subsection (a) of
    this Section shall be mailed by  certified  mail,  return
    receipt  requested,  within  60  days  after  the date of
    failure to each  claimant  whose  name  and  post  office
    address  are known by the Department within 60 days after
    the date of failure.
    (c)  Every claim filed must be in writing, and  verified,
and  signed by a person who has the legal authority to file a
claim on behalf of the claimant and  must  state  information
sufficient  to  notify  the  Department  of the nature of the
claim and the amount sought.
    (d)  A claim  shall  be  barred  and  disallowed  in  its
entirety if:
         (1)  notice  is  published and given to the claimant
    as provided for  in  subsections  (a)  and  (b)  of  this
    Section  and  the claimant does not file a claim with the
    Department on or before the claim date; or
         (2)  the claimant's name or post office  address  is
    not  known  by  the  Department or cannot, within 60 days
    after the date of failure, be reasonably  ascertained  by
    the  Department  and  the  claimant does not file a claim
    with the Department on or before the later of  the  claim
    date  or  7 days after the date notice was mailed to that
    claimant if the date notice was mailed to  that  claimant
    is on or before the claim date.
    (e)  Subsequent notice.
         (1)  If, more than 60 days after the date of failure
    but  before  the claim date, the Department learns of the
    name and post  office  address  of  a  claimant  who  was
    previously  not  notified  by the Department by mail, the
    Department shall mail by certified mail,  return  receipt
    requested,  the notice to the claimant as provided for in
    subsection (a) of this Section.
         (2)  The notice  mailed  as  provided  for  in  item
    (e)(1)  of  this  Section  shall not extend the period of
    time in which a claimant may file its  claim  beyond  the
    claim  date.  A  claimant  to whom notice is mailed under
    item (e)(1) of this  Section,  however,  shall  have  the
    later  of  the claim date or 7 days after the date notice
    was mailed to file a claim with the Department.
    (f)  The  Department  shall   determine   the   validity,
category,  and amount of each claim within 120 days after the
date of failure of  the  licensee  and.  (g)  The  Department
shall  give  written  notice  within that time period to each
claimant and to  the  failed  licensee  of  the  Department's
determination  as  to  the  validity, category, and amount of
each claim.
    (g) (h)  A claimant or the failed licensee may request  a
hearing  on  the  Department's  determination  within 30 days
after receipt of the written notice and the hearing shall  be
held  in  the  county  of  residence  of  the claimant and in
accordance with rules. Under no circumstances  shall  payment
to  claimants  who have not requested a hearing be delayed by
reason  of  the  request  for  a  hearing  by  any  unrelated
claimant.
    (h)  Within 30 days after a failure of  a  licensee,  the
Director  shall  appoint  an Administrative Law Judge for the
hearings.  The Director shall appoint a  person  licensed  to
practice   law   in   this  State;  who  is  believed  to  be
knowledgeable  with  regard  to  agriculture  and  the  grain
industry in Illinois; who has no conflict  of  interest;  and
who  at the time of his or her appointment is not working for
or employed by the Department in any capacity whatsoever.
    (i)  For the purposes of this  Article,  the  "reasonably
ascertainable"   standard   shall   be   satisfied  when  the
Department conducts a review of the failed  licensee's  books
and records and an interview of office and clerical personnel
of the failed licensee.
    (j)  It  is  the intent of this Act that the time periods
and deadlines in this Section 25-5 are absolute, and are  not
to  be  tolled,  or their operation halted or delayed. In the
event of a bankruptcy by a licensee, the Director shall  seek
to  have  commenced  any  proceedings  that are necessary and
appropriate to lift the automatic stay or make  it  otherwise
inapplicable  to the actions of the Department with regard to
the claims determination process. In  all  other  cases,  the
Department  shall  seek  to  have  commenced  the proceedings
necessary to expeditiously remove or lift any  order  of  any
court  or  administrative  agency that might attempt to delay
the time periods and  deadlines  contained  in  this  Section
25-5.
(Source: P.A. 89-287, eff. 1-1-96.)

    (240 ILCS 40/25-10)
    Sec. 25-10.  Claimant compensation.  Within 30 days after
the  day  on  which a claim becomes a valid claim, a claimant
shall be compensated to the extent  of  its  valid  claim  as
provided in this Section.
    It  is  the  express intent of this legislation that each
undisputed portion of a claim shall  be  paid  in  accordance
with  the  deadlines of this Code, even if there are disputed
portions of the claim. For example, the  amount  of  a  valid
claim  calculated  for an "unpriced obligation" shall be paid
to the claimant despite the fact that  claimant  additionally
seeks the amount for a "priced obligation".
    Each claimant shall be compensated in accordance with the
following provisions:
    (a)  Valid  claims  filed by warehouse claimants shall be
paid 100% of the amount determined by the Department  out  of
the  net  proceeds  of the liquidation of grain assets as set
forth in this subsection (a).  To the extent the net proceeds
are insufficient, warehouse claimants shall be paid their pro
rata share of the net proceeds of the  liquidation  of  grain
assets  and,  subject  to  subsection (j) of this Section, an
additional amount per claimant not to exceed the  balance  of
their respective claims out of the Fund.
    (b)  Subject  to  subsection  (j) of this Section, if the
net proceeds as set forth in subsection (a) of  this  Section
are  insufficient  to  pay  in full all valid claims filed by
warehouse claimants as payment becomes due, the balance shall
be paid out of the Fund in accordance with subsection (b)  of
Section 25-20.
    (c)  Valid claims filed by producers who:
         (1)  have  delivered grain within 21 days before the
    date of  failure,  or  the  date  of  suspension  if  the
    suspension  results  in  a  failure, for which pricing of
    that grain has been completed before date of failure; or
         (2)  gave written notice to the Department within 21
    days of the date of delivery of grain, if the pricing  of
    that  grain  has been completed, that payment in full for
    that grain has not been made;
shall be paid, subject to subsection  (j)  of  this  Section,
100%  of  the  amount  of  the  valid claim determined by the
Department.  Valid claims that are included in subsection (c)
of this Section shall receive no payment under subsection (d)
of this Section, and any claimant having a valid claim  under
this  subsection  (c)  determined  by the Department to be in
excess of the limits, if any, imposed under subsection (j) of
this Section shall be paid  only  sums  in  excess  of  those
limits  to  the  extent  additional  money is available under
subsection (d)(2) of Section 25-20.
    (d)  Valid claims that are not included in subsection (c)
of this Section that are filed by producers where  the  later
date  of  completion of who completed delivery or and pricing
of the grain in reference to the valid  claim,  whichever  is
later,  within  160  days before the date of failure shall be
paid 85% of the amount of the valid claim determined  by  the
Department  or  $250,000  $100,000,  whichever  is  less, per
claimant. In computing the 160-day period, the  phrase  "date
of  completion  of  delivery"  means  the  date  of  the last
delivery of grain to be applied to the  quantity  requirement
of  the  contract,  and the phrase "the later date" means the
date closest to the date of failure.  In addition, for claims
filed by producers for grain sold on a contract, however, the
later of the date of execution of the contract or the date of
delivery of grain in reference to the grain  covered  by  the
price  later  contract  must  not  be  more than 365 270 days
before the date of failure  in  order  for  the  claimant  to
receive  any  compensation.  In computing the 365-day period,
the phrase "the later of the date" means the date closest  to
the  date of failure, and the phrase "date of delivery" means
the date of the last delivery of grain to be applied  to  the
quantity requirement of the price later contract.
    (e)  Valid  claims filed by producers for grain sold on a
price later contract, for which the final price has not  been
established,  shall  be  paid  85% of the amount of the valid
claims determined by the  Department  or  $250,000  $100,000,
whichever  is less, per claimant, if the later of the date of
execution of the contract or the date of delivery of grain in
reference to the grain covered by the  price  later  contract
occurred  not  no  more  than 365 270 days before the date of
failure. In computing the 365-day  period,  the  phrase  "the
later  of  the  date"  means  the date closest to the date of
failure, and the phrase "date of delivery" means the date  of
the  last  delivery  of  grain  to be applied to the quantity
requirement of the price later contract.
    The execution of subsequent price later contracts by  the
producer  and  the licensee for grain previously covered by a
price later contract shall not extend the coverage of a claim
beyond the original 365 270 days.
    (f)  The maximum payment to producers  under  subsections
(d)  and  (e)  of  this  Section, combined, shall be $250,000
$100,000 per claimant.
    (g)  The following claims shall be barred and  disallowed
in  their  entirety and shall not be entitled to any recovery
from the Fund or the Trust Account:
         (1)  Claims filed by producers where both  the  date
    of  completion of delivery and the date of pricing of the
    grain are who completed pricing of the grain in reference
    to their claim in excess of 160 days before the  date  of
    failure.
         (2)  Claims  filed  by producers for grain sold on a
    price  later  contract  if  the  later  of  the  date  of
    execution of the contract or  the  date  of  delivery  of
    grain  in  reference  to  the  grain covered by the price
    later contract occurred more than 365 270 days before the
    date of failure.  In computing the  365-day  period,  the
    phrase  "the later of the date" means the date closest to
    the date of failure, and the phrase  "date  of  delivery"
    means  the  date  of  the  last  delivery  of grain to be
    applied to the quantity requirement of  the  price  later
    contract.
         (3)  Claims  filed  by  any  claimant that are based
    upon or acquired by fraudulent or  illegal  acts  of  the
    claimant.
    (h)  To  the  extent moneys are available, additional pro
rata payments may be made to claimants under  subsection  (d)
of Section 25-20.
    (i)  For  purposes  of  this  Section,  a  claim filed in
connection with warehouse receipts that are possessed under a
collateral pledge of a producer, or that  are  subject  to  a
perfected  security  interest,  or  that  were  acquired by a
secured party  or  lien  holder  under  an  obligation  of  a
producer, shall be deemed to be a claim filed by the producer
and  not  a  claim  filed  by  the  secured party or the lien
holder, regardless of whether  the  producer  is  in  default
under  that  collateral  pledge, security agreement, or other
obligation.
    (j)  With respect to any failure occurring  on  or  after
July  1,  1998,  The  maximum  payment  out  of  the Fund for
claimants under subsection (a), (b) of this Section shall  be
$1,000,000  per  claimant  and the maximum payment out of the
Fund for claimants under subsections (c),  (d),  and  (e)  of
this Section, combined, shall be $1,000,000 per claimant.
    (k)  The  amounts to be paid to warehouse valid claimants
and  grain  dealer  valid  claimants  shall   be   calculated
according to the following:
         (1)  Valid  claimants  who have warehouse claims, or
    who have grain dealer claims for  grain  sold,  delivered
    but  unpriced  as  of  the  date  of  failure, shall have
    "unpriced obligations", and to determine the  per  bushel
    value  of  these valid claims the Department shall use an
    average of the cash bid prices on  the  date  of  failure
    from  grain dealers located within the market area of the
    failed licensee, and the cash bid price  offered  by  the
    failed   licensee   on   the   date   of   failure,  less
    transportation, handling costs, and discounts  applicable
    as of that date.
         (2)  Valid  claimants  who  have grain dealer claims
    for grain sold, delivered, and priced as of the  date  of
    failure  shall  have  "priced obligations", and the price
    per bushel to be used in calculating the compensation due
    these valid claimants shall be that which has been agreed
    upon by  the  failed  licensee  and  the  claimant,  less
    applicable  discounts.  For  purposes of this item (2), a
    person has "priced" his or her grain if  he  or  she  has
    done  those  things necessary under the agreement to set,
    choose, or select a price for any portion  of  the  grain
    under  the agreement, without regard to whether he or she
    has received a check in payment for the grain,  or  could
    have  received a check in payment for the grain, prior to
    the failure.
    (l)  Arrangements  whereby  a  producer  agrees  with   a
licensee  to defer receipt of payment of amounts due from the
sale of grain are covered by this Code  and  are  not  to  be
considered  loans  by  the  producer to the licensee, despite
payments to the producer as an inducement for the leaving  of
moneys  with  the  licensee, unless the licensee has executed
and delivered to the  producer  a  promissory  note  covering
those amounts.
(Source: P.A. 91-213, eff. 7-20-99.)

    (240 ILCS 40/25-20)
    Sec. 25-20.  Priorities and repayments.
    (a)  All  valid  claims  shall  be  paid  from  the Trust
Account,  as  provided  in  Section  25-10,  first  from  the
proceeds realized from liquidation of and collection upon the
grain assets relating to the failed licensee, as to warehouse
claimants, and the equity assets as to  a  secured  party  or
lien  holder  who has consented to the Department liquidating
and  collecting  upon  the  equity  asset  as  set  forth  in
subsection (f) of Section 20-15,  and  the  remaining  equity
assets,  collateral,  and  guarantees  relating to the failed
licensee, as to grain dealer claimants.
    (b)  If the proceeds realized  from  liquidation  of  and
collection  upon the grain assets, equity assets, collateral,
and  guarantees  relating  to   the   failed   licensee   are
insufficient  to  pay all valid claims as provided in Section
25-10 and subsection (a) of this Section as payment on  those
claims becomes due, the Director shall request from the Board
sufficient funds to be transferred from the Fund to the Trust
Account  to  pay  the balance owed to claimants as determined
under Section 25-10.  If a request is made  by  the  Director
for  a  transfer of funds to the Trust Account from the Fund,
the Board shall act on that request within 25 days after  the
date  of  that request.  Once moneys are transferred from the
Fund to the Trust Account, the Director shall pay the balance
owed to claimants in accordance with Section 25-10.
    (c)  Net proceeds from liquidation of grain assets as set
forth in subsection (a) of  Section  25-10  received  by  the
Department,  to  the  extent  not  already  paid to warehouse
claimants, shall be prorated among the fund and all warehouse
claimants who have not had their valid claims paid in full.
         (1)  The pro rata distribution to the Fund shall  be
    based  upon  the  total  amount  of  valid  claims of all
    warehouse claimants who have had their valid claims  paid
    in  full.   The  pro  rata distribution to each warehouse
    claimant who has not had his or her valid claims paid  in
    full  shall  be  based  upon  the  total  amount  of that
    claimant's original valid claims.
         (2)  If the net proceeds  from  the  liquidation  of
    grain  assets  as  set forth in subsection (a) of Section
    25-10 exceed all amounts  needed  to  satisfy  all  valid
    claims   filed   by   warehouse  claimants,  the  balance
    remaining shall be paid into the Trust Account or as  set
    forth in subsection (h).
    (d)  Subject to subsections (c) and (h):
         (1)  The  proceeds  realized from liquidation of and
    collection  upon  the  grain   assets,   equity   assets,
    collateral,   and   guarantees  relating  to  the  failed
    licensee or any  other  assets  relating  to  the  failed
    licensee  that  are  received  by  the Department, to the
    extent not already paid to claimants, shall be first used
    to repay the Fund for moneys  transferred  to  the  Trust
    Account.
         (2)  After the Fund is repaid in full for the moneys
    transferred  from it to pay the valid claims in reference
    to a failed licensee,  any  remaining  proceeds  realized
    from liquidation of and collection upon the grain assets,
    equity assets, collateral, and guarantees relating to the
    failed  licensee  thereafter  received  by the Department
    shall be prorated to the claimants holding  valid  claims
    who  have  not received 100% of the amount of their valid
    claims based  upon  the  unpaid  amount  of  their  valid
    claims.
    (e)  After all claimants have received 100% of the amount
of  their  valid  claims,  to the extent moneys are available
interest at the rate of 6% per annum shall  be  assessed  and
paid  to  the Fund on all moneys transferred from the Fund to
the Trust Account.
    (f)  After the Fund is paid the interest as  provided  in
subsection  (e) of this Section, then those claims barred and
disallowed under subsection (g) of  Section  25-10  shall  be
paid  on  a pro rata basis only to the extent that moneys are
available.
    (g)  Once all claims become valid claims  and  have  been
paid  in  full and all interest as provided in subsection (e)
of this Section is paid in full, and all claims are  paid  in
full under subsection (f), any remaining grain assets, equity
assets, collateral, and guarantees, and the proceeds realized
from  liquidation  of  and  collection upon the grain assets,
equity assets, collateral, and  guarantees  relating  to  the
failed  licensee, shall be returned to the failed licensee or
its  assignee,  or  as  otherwise  directed  by  a  court  of
competent jurisdiction.
    (h)  If amounts in the Fund are insufficient to  pay  all
valid claims, the Corporation shall transfer from the Reserve
Fund  to  the  Fund  amounts  sufficient to satisfy the valid
claims, and to the extent the amounts  thus  transferred  are
insufficient  to  pay  all valid claims, the General Assembly
shall appropriate to the Corporation  amounts  sufficient  to
satisfy  the  valid  claims.   If  for any reason the General
Assembly  fails  to  make   an   appropriation   to   satisfy
outstanding   valid   claims,   this   Code   constitutes  an
irrevocable  and  continuing  appropriation  of  all  amounts
necessary for that purpose and the irrevocable and continuing
authority for and direction to the State Comptroller  and  to
the  State  Treasurer  to  make  the  necessary transfers and
disbursements from the revenues and funds of  the  State  for
that  purpose.  Subject to payments to warehouse claimants as
set forth in subsection (c) of Section 25-20, the State shall
be first reimbursed, and the Reserve Fund shall thereafter be
reimbursed to the extent needed to restore the  Reserve  Fund
to  a  level of $2,000,000 of principal (not including income
on the assets in the Reserve Fund) as soon  as  funds  become
available  for  any amounts paid under subsection (g) of this
Section upon replenishment of the Fund from assessments under
subsections subsection (d), (f), and (g) of Section 5-30  and
collection  upon grain assets, equity assets, collateral, and
guarantees relating to the failed licensee.
    (i)  The Department shall have those rights of  equitable
subrogation  which  may result from a claimant receiving from
the Fund payment in full of the  obligations  of  the  failed
licensee to the claimant.
(Source: P.A. 91-213, eff. 7-20-99.)

    (240 ILCS 40/30-5)
    Sec. 30-5.  Illinois Grain Insurance Corporation.
    (a)  The  Corporation  is  a  political subdivision, body
politic, and public corporation. The governing powers of  the
Corporation  are vested in the Board of Directors composed of
the Director, who shall personally serve  as  president;  the
Attorney  General  or his or her designee, who shall serve as
secretary; the State Treasurer or his or  her  designee,  who
shall  serve  as treasurer; the Director of the Department of
Insurance or his  or  her  designee;  and  the  chief  fiscal
officer  of  the  Department.  Three  members  of  the  Board
constitute  a  quorum  at  any  meeting of the Board, and the
affirmative vote of 3 members is  necessary  for  any  action
taken  by the Board at a meeting, except that a lesser number
may adjourn a meeting from time to time.  A  vacancy  in  the
membership of the Board does not impair the right of a quorum
to  exercise all the rights and perform all the duties of the
Board and Corporation.
    (b)  The Corporation has the following  powers,  together
with  all  powers incidental or necessary to the discharge of
those powers in corporate form:
         (1)  To have perpetual succession by  its  corporate
    name as a corporate body.
         (2)  To   adopt,   alter,  and  repeal  bylaws,  not
    inconsistent with the provisions of this  Code,  for  the
    regulation and conduct of its affairs and business.
         (3)  To  adopt  and make use of a corporate seal and
    to alter the seal at pleasure.
         (4)  To avail itself  of  the  use  of  information,
    services,  facilities,  and  employees  of  the  State of
    Illinois in carrying out the provisions of this Code.
         (5)  To receive funds,  printer  registration  fees,
    and penalties assessed by the Department under this Code.
         (6)  To  administer  the  Fund by investing funds of
    the Corporation that the  Board  may  determine  are  not
    presently needed for its corporate purposes.
         (7)  To  receive  funds  from the Trust  Account for
    deposit into the  Fund.
         (8)  Upon the  request  of  the  Director,  to  make
    payment  from  the Fund and the Reserve Fund to the Trust
    Account when payment is necessary to compensate claimants
    in accordance with the provisions of Section 25-20 or for
    payment of refunds to licensees in  accordance  with  the
    provisions of this Code.
         (9)  To  authorize,  receive,  and disburse funds by
    electronic means.
         (10)  To make any inquiry and  investigation  deemed
    appropriate  with  regard to the failure of any licensee,
    including but not limited to analyzing the causes of  and
    reasons  for  the  failure;  determining the adequacy and
    accuracy of Department examinations and other  regulatory
    measures   with   regard  to  the  failed  licensee;  and
    analyzing whether the handling  of  the  liquidation  and
    payment  process  by  the Department was done in a manner
    that  served  the  interests  of  those   persons   whose
    interests this Code was designed to protect.
         (11) (9)  To have those powers that are necessary or
    appropriate  for  the exercise of the powers specifically
    conferred upon the Corporation and all incidental  powers
    that are customary in corporations.
    (c)  A  committee of advisors shall be created to provide
technical assistance and advice and make  recommendations  to
the  Board.  The advisory committee shall assist the board in
understanding pertinent developments in grain production  and
marketing  and  the  grain  industry.  The advisory committee
shall be composed of one grain  producer  designated  by  the
Illinois  Farm  Bureau;  one grain producer designated by the
Illinois Farmers Union; one grain producer designated by  the
Illinois   Corn   Growers  Association;  one  grain  producer
designated   by   the   Illinois   Soybean   Association;   2
representatives of the  grain  industry,  designated  by  the
Grain and Feed Association of Illinois; and 2 representatives
of  the lending industry, one each designated by the Illinois
Bankers Association and the Community  Bankers  of  Illinois.
Members  of  the  advisory  committee  shall serve terms of 2
years from the date of their  designation.   Members  of  the
advisory  committee  shall  have  the  right  to  attend  all
meetings  of  the Board and participate in Board discussions,
but shall not have a vote.
(Source: P.A. 91-213, eff. 7-20-99.)

    (240 ILCS 40/30-10)
    Sec. 30-10.  Participants in the Fund.
    (a)  A licensee  under  this  Code  is  subject  to  this
Article  and  shall collect and pay assessments into the Fund
as provided in Section 5-30.
    (b)  Except  as  provided  in  subsection  (c)  of   this
Section,  a  person engaged in the business of a grain dealer
or warehouseman but not licensed under this  Code  shall  not
participate  in  or  benefit  from the Fund and its claimants
shall not receive proceeds from the Fund.
    (c)  Participation of federal warehousemen.
         (1)  A federal warehouseman may participate  in  the
    Fund.   If  a federal warehouseman chooses to participate
    in the Fund, it shall to the extent permitted by  federal
    law:
              (A)  pay assessments into the Fund;
              (B)  be  deemed  a  licensee and a warehouseman
         under this Code;
              (C)  be subject to this Code; and
              (D)  execute a  cooperative  agreement  between
         itself and the Department.
         (2)  The  cooperative agreement shall, at a minimum,
    provide each of the following to the extent permitted  by
    federal law:
              (A)  Authorization for the Department to obtain
         information    about    the   federal   warehouseman
         including, but not limited to,  bushel  capacity  of
         storage space, financial stability, and examinations
         performed   by   employees   of  the  United  States
         Department of Agriculture.
              (B)  That  the  federal  warehouseman   submits
         itself  to  the  jurisdiction  of the Department and
         that it agrees to be subject to and  bound  by  this
         Code and deemed a licensee under this Code.
              (C)  That  in  the  event  of  a failure of the
         federal  warehouseman,  the  Department  shall  have
         authority to seize, liquidate, and collect upon  all
         grain assets, collateral, and guarantees relating to
         the federal warehouseman as in the case of any other
         licensee.
              (D)  Such  other requirements as established by
         rule.
         (3)  A federal warehouseman that participates in the
    Fund shall at a minimum meet the  licensing  requirements
    of  this Code and shall comply with all requirements of a
    licensee and a warehouseman under this Code to the extent
    permitted by federal law.
    (d)  A federal warehouseman that participates in the Fund
or a warehouseman that desires to or  has  become  a  federal
warehouseman  cannot  withdraw from participation in the Fund
for the benefit of existing depositors until  the  occurrence
of all of the following:
         (1)  Payment in full by the federal warehouseman or
    withdrawing   warehouseman   of   all  assessments  under
    subsection (a) of Section 5-30.
         (2)  Payment in full by the federal warehouseman or
    withdrawing warehouseman of  all  assessments  instituted
    under  subsection  (d)  of  Section  5-30  on or after an
    assessment determination date that occurs before  if  the
    Fund  is  under  $3,000,000 at any time after the federal
    warehouseman or  withdrawing  warehouseman  notifies  the
    Department that it desires to withdraw from participation
    in  the Fund and before the issuance by the Department of
    a certificate of withdrawal from the Fund.
         (3)  The expiration of 30 days following  the  later
    of:
              (A)  the   date  the  federal  warehouseman  or
         withdrawing warehouseman has  ceased  providing  its
         depositors with coverage under the Fund;
              (B)  the   date  the  federal  warehouseman  or
         withdrawing warehouseman has posted at each  of  its
         locations  a  notice  stating  when  it  will  cease
         providing  its  depositors  with  coverage under the
         Fund;
              (C)  notification of all potential claimants by
         the federal warehouseman or withdrawing warehouseman
         of the date on which it  will  cease  providing  its
         depositors with coverage under the Fund; and
              (D)  Completion  of  an  audit  and examination
         satisfactory to the Department as  provided  for  in
         this   Code   and  by  rule,  which  is  to  be  the
         Department's final examination.
         (4)  Obtaining  releases  of  liability   from   all
    existing   depositors  or  posting  collateral  with  the
    Department for 270 days after withdrawing from  the  Fund
    in   an   amount  equal  to  the  liability  to  existing
    depositors who have  not  executed  releases  before  the
    completion of the Department's final examination.
         (5)  Compliance  with  all notification requirements
    as provided for in this Code and by rule.
         (6)  Issuance by the Department of a certificate  of
    withdrawal from the Fund when the federal warehouseman or
    withdrawing  warehouseman  has  met  all requirements for
    withdrawal from participation in the Fund.
    (e)  Before a federal warehouseman or a warehouseman that
desires to or has become a federal warehouseman may  withdraw
from  participation in the Fund, it must pay for an audit and
examination and must provide to the Department all names  and
addresses   of   potential  claimants  for  the  purposes  of
notification of withdrawal of participation in the Fund.
(Source: P.A. 89-287, eff. 1-1-96.)

    (240 ILCS 40/30-25 new)
    Sec. 30-25.  Grain Insurance Reserve Fund.  Upon  payment
in  full  of  all money that has been transferred to the Fund
prior to June 30, 2003  from  the  General  Revenue  Fund  as
provided for under subsection (h) of Section 25-20, the State
of  Illinois  shall remit $2,000,000 to the Corporation to be
held in a separate and discrete account to  be  used  to  the
extent  the  assets  in  the Fund are insufficient to satisfy
claimants as payment of their claims become due as set  forth
in  subsection  (h)  of  Section 25-20. The remittance of the
$2,000,000 reserve shall be made to the Corporation within 60
days of payment in full of all money transferred to the  Fund
as set forth above in this Section 30-25. All income received
by  the Reserve Fund shall be deposited in the Fund within 35
days of the end of each calendar quarter.

    (240 ILCS 40/Art. 35 heading new)
                 ARTICLE 35. REGULATORY FUND

    (240 ILCS 40/35-5 new)
    Sec. 35-5.  Regulatory Fund.
    (a)  The Regulatory Fund is created as a  trust  fund  in
the   State  Treasury.  The  Regulatory  Fund  shall  receive
license, certificate, and extension fees under Sections 5-10,
5-15, and 5-20 and funds  under  subsection  (g)  of  Section
25-20 and shall pay expenses as set forth in this Article 35.
    (b)  Any  funds  received  by the Director under Sections
5-10, 5-15, and 5-20 and funds disbursed for deposit  to  the
Regulatory  Fund  under subsection (g) of Section 25-20 shall
be deposited with the Treasurer as ex officio  custodian  and
held  separate and apart from any public money of this State,
with interest accruing  on  moneys  in  the  Regulatory  Fund
deposited  into  the  Regulatory  Fund. Disbursement from the
Fund for expenses as set forth in this Article 35 shall be by
voucher ordered by the Director, accompanied by documentation
satisfactory to the Treasurer and the Comptroller  supporting
the   payment   warrant   drawn   by   the   Comptroller  and
countersigned by the Treasurer. Moneys in the Regulatory Fund
shall not be subject to appropriation by the General Assembly
but shall  be  subject  to  audit  by  the  Auditor  General.
Interest  earned on moneys deposited into the Regulatory Fund
shall be deposited into the Regulatory Fund.
    (c)  Fees  deposited  into  the  Regulatory  Fund   under
Sections  5-10, 5-15, and 5-20 shall be expended only for the
following program expenses of the Department;
         (1)  Implementation and monitoring  of  programs  of
    the  Department  solely  under  this  Code,  including an
    electronic warehouse receipt program.
         (2)  Employment or engagement  of  certified  public
    accountants  to  assist  in  oversight  and regulation of
    licensees in the course of an  intermediate  or  advanced
    examination under Section 1-15.
         (3)  Training  and  education of examiners and other
    Department employees in reference to Department  programs
    established  to  implement the Department's duties solely
    under the Code.
    (d)  Any  expenses  incurred   by   the   Department   in
performance  of its duties under Article 20 of the Code shall
be reimbursed to the Department out of the net  assets  of  a
liquidation  to  the extent available under subsection (q) of
Section 25-20 and shall be deposited into the Regulatory Fund
and shall be expended solely for program expenses  under  the
Code.

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