Public Act 096-0464
 
HB2533 Enrolled LRB096 03551 RCE 13576 b

    AN ACT concerning warehouses.
 
    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
1-10, 1-25, 10-15, 10-25, and 25-5 as follows:
 
    (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 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);
    (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 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, 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, a trust, or a governmental
agency.
    "Price later contract" means a written contract, in written
or electronic form, 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, submitted by a claimant, the 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
    participates in the Fund under subsection (c) of Section
    30-10.
(Source: P.A. 92-16, eff. 6-28-01; 93-225, eff. 7-21-03.)
 
    (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.
    (a) The Department shall adopt rules governing electronic
systems under which electronic warehouse receipts are 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.
    (b) The Department shall adopt rules governing electronic
price later contracts. Licensees and producers shall not be
required, however, to issue or use electronic price later
contracts.
(Source: P.A. 93-225, eff. 7-21-03.)
 
    (240 ILCS 40/10-15)
    Sec. 10-15. Price later contracts.
    (a) Price later contracts shall contain provisions be
written on forms prescribed or authorized by the Department and
shall be in either written or electronic form. If in written
form, price . 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.
    Price later contracts that are in electronic form shall be
numbered consecutively.
    (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 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 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.
    (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. If the price later contract is
in electronic form, the licensee shall, within 5 business days
after that price selection, e-mail to that producer a
confirmation of the price selection, clearly and succinctly
indicating the price selected, in full satisfaction of the
mailing requirement in the previous sentence.
    (l) The issuance and use of price later contracts in
electronic form pursuant to the rules promulgated by the
Department are specifically authorized by this Code, and any
such price later contracts shall have the same validity and
enforceability, for all purposes, as those in non-electronic
form. For purposes of this Code, the word "written", and
derivatives thereof, when used in relation to price later
contracts, shall include price later contracts created or
displayed electronically.
(Source: P.A. 93-225, eff. 7-21-03.)
 
    (240 ILCS 40/10-25)
    Sec. 10-25. Warehouse receipts and storage of grain.
    (a) When grain is delivered to a warehouseman at a location
where grain is also purchased, the licensee shall give written
evidence of delivery of grain and that written evidence shall
be marked to indicate whether the grain is delivered for
storage or for sale. In the absence of adequate evidence of
sale, the grain shall be construed to be in storage.
    (b) Upon demand by a depositor, a warehouseman shall issue
warehouse receipts for grain delivered into storage.
    (c) There shall be no charge for the first warehouse
receipt issued to a depositor for a given lot of grain. Charges
for any additional warehouse receipts for grain previously
covered by a warehouse receipt must be commensurate with the
cost of issuance of the additional warehouse receipt.
    (d) A warehouseman shall issue warehouse receipts only in
accordance with the following requirements:
        (1) Warehouse receipts shall be consecutively numbered
    in a form prescribed by the Department and issued
    consecutively by the warehouseman.
        (2) In the case of a lost or destroyed warehouse
    receipt, the new warehouse receipt shall bear the same date
    as the original and shall be plainly marked on its face
    "duplicate in lieu of lost or destroyed warehouse receipt
    number .......", and the warehouseman shall duly fill in
    the blank with the appropriate warehouse receipt number.
        (3) Warehouse receipts shall be printed by a person
    authorized by the Department. The person shall register
    with the Department and pay an annual registration fee of
    $100 to print warehouse receipts.
        (4) Negotiable warehouse receipts shall be issued only
    for grain actually in storage with the warehouseman from
    which it is issued or redeposited by that warehouseman as
    provided in subsection (e) of Section 10-20.
        (5) A warehouseman shall not insert in any negotiable
    warehouse receipt issued by it any language that in any way
    limits or modifies its liability or responsibility.
    (e) Upon delivery of grain covered by a negotiable
warehouse receipt, the holder of the negotiable warehouse
receipt must surrender the warehouse receipt for cancellation,
and a warehouseman must cancel and issue a new negotiable
warehouse receipt for the balance of grain in storage.
    (f) When all grain, the storage of which is evidenced by a
warehouse receipt, is delivered from storage, the warehouse
receipt shall be plainly marked across its face with the word
"cancelled" and shall have written on it the date of
cancellation, the name of the person canceling the warehouse
receipt, and such other information as required by rule, and is
thereafter void.
    (g) When a warehouseman delivers grain out of storage but
fails to collect and cancel the negotiable warehouse receipt,
the warehouseman shall be liable to any purchaser of the
negotiable warehouse receipt for value in good faith for
failure to deliver the grain to the purchaser, whether the
purchaser acquired the negotiable warehouse receipt before or
after the delivery of the grain by the warehouseman. If,
however, grain has been lawfully sold by a warehouseman to
satisfy its warehouseman's lien, the warehouseman shall not be
liable for failure to deliver the grain pursuant to the demands
of a holder of a negotiable warehouse receipt to the extent of
the amount of grain sold.
    (h) Except as otherwise provided by this Code or other
applicable law, a warehouseman shall deliver the grain upon
demand made by the holder of a warehouse receipt pertaining to
that grain if the demand is accompanied by:
        (1) satisfaction of the warehouseman's lien;
        (2) in the case of a negotiable warehouse receipt, a
    properly endorsed negotiable warehouse receipt; or
        (3) in the case of a non-negotiable warehouse receipt,
    written evidence that the grain was delivered to the
    warehouseman and that the depositor is entitled to it.
    (i) If no warehouse receipt is issued to a depositor, a
warehouseman shall deliver grain upon the demand of a depositor
if the demand is accompanied by satisfaction of the
warehouseman's lien and written evidence that the grain was
delivered to the warehouseman and the depositor is entitled to
it.
    (j) If a warehouseman refuses or fails to deliver grain in
compliance with a demand by a holder of a warehouse receipt or
a depositor, the burden is on the warehouseman to establish the
existence of a lawful excuse for the refusal.
    (k) If a warehouse receipt has been lost or destroyed, a
warehouseman may issue a substitute warehouse receipt, as
provided for in this Section, upon delivery to the warehouseman
of an affidavit under oath stating that the applicant for the
substitute warehouse receipt is entitled to the original
warehouse receipt and setting forth the circumstances that
resulted in the loss or destruction of the original warehouse
receipt. The warehouseman may request from the depositor a bond
in double the value of the grain represented by the original
warehouse receipt at the time of issuance of the substitute
warehouse receipt so as to protect the warehouseman from any
liability or expense that it, or any person injured by the
delivery, may incur by reason of the original warehouse receipt
remaining outstanding.
    (l) A warehouse receipt that is to be used for collateral
purposes by a warehouseman must be first issued by the
warehouseman to itself.
    (m) The Department shall approve temporary storage space in
an amount to be determined by the Department if all the
following conditions are met:
        (1) The warehouseman pays all fees and assessments
    associated with the temporary storage space.
        (2) The warehouseman demonstrates that there is a need
    for additional storage on a temporary basis due to a bumper
    crop or otherwise.
        (3) The structure for the storage of grain meets all of
    the following requirements:
            (A) The grain storage area has a permanent base
        made of concrete, asphalt, or a material having similar
        structural qualities.
            (B) Hot spot detectors, aeration fans, and ducts
        are provided to assure that the quality of grain in
        storage is maintained.
            (C) The grain storage structure has rigid
        sidewalls made of concrete, wood, metal, or a material
        having similar structural qualities.
            (D) The grain storage structure is equipped with a
        waterproof covering of sufficient strength to support
        a person's weight and with inlets to allow airflow.
            (E) Access to the grain is provided for the purpose
        of sampling and making examinations.
        (4) Temporary storage space shall be considered an
    increase in the licensed storage capacity of the licensee
    and shall be subject to Section 5-30.
        (5) The authorization to use temporary storage space
    for the storage of grain shall expire at the end of 6
    months after the date of approval by the Department or May
    15th, whichever comes first.
    (n) The Department may approve emergency storage space at
the request of the licensee according to rule.
    (o) The issuance and transfer of the warehouse receipts in
electronic form pursuant to rules promulgated by the Department
are specifically authorized by this Code, and any such
warehouse receipts shall have the same validity and
enforceability, for all purposes, as those in non-electronic
non- electrical form. For purposes of this Code, the words
"written" and "printed", and derivatives thereof, when used in
relation to warehouse receipts, shall include warehouse
receipts created or displayed electronically.
(Source: P.A. 94-211, eff. 7-14-05.)
 
    (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, 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 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) 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 the location of the principal office or place of
business, in Illinois, residence of the failed licensee
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. 93-225, eff. 7-21-03.)
 
    Section 99. Effective date. This Act takes effect upon
becoming law.

Effective Date: 8/14/2009