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Violations; Financial Deficiencies; Administrative Penalties; Suspension And Revocation Of License

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(240 ILCS 40/Art. 15 heading)

ARTICLE 15. VIOLATIONS; FINANCIAL DEFICIENCIES;ADMINISTRATIVE PENALTIES; SUSPENSION ANDREVOCATION OF LICENSE.

(240 ILCS 40/15-5)

Sec. 15-5. Training. Without limitation upon any other action under this Code, if a licensee violates any of the provisions of this Code, the Department may, without need for a hearing, require additional training.

(Source: P.A. 89-287, eff. 1-1-96.)

(240 ILCS 40/15-10)

Sec. 15-10. De minimis violations.

(a) If a licensee commits a de minimis violation of this Code, the Director may, in his or her discretion, and without further action, issue a warning letter to the licensee.

(b) For the purposes of this Article, a de minimis violation exists when a licensee:

(1) violates the maximum allowable speculative limits of item (a)(2) of Section 10-10 by 1,000 bushels or less;
(2) has total grain quantity deficiency violations that do not exceed $1,000 as determined by the formula set forth in subsection (c) of Section 15-20; or
(3) has total grain quality deficiency violations that do not exceed $1,000 as determined by the formula set forth in subsection (d) of Section 15-20.

(Source: P.A. 99-642, eff. 7-28-16.)

(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.

(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 but less than $20,000.

(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 but less than $15,000.

(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 but less than $20,000.

(Source: P.A. 93-225, eff. 7-21-03.)

(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.

(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 and no greater than $20,000.

(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 and no greater than $15,000.

(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 and no greater than $20,000.

(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. 93-225, eff. 7-21-03.)

(240 ILCS 40/15-25)

Sec. 15-25. Deposit of penalties. All monetary penalties collected by the Department shall be paid into the Fund.

(Source: P.A. 89-287, eff. 1-1-96.)

(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. 93-225, eff. 7-21-03.)

(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 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. 93-225, eff. 7-21-03.)

(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.
(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.
(5) A licensee has failed to pay a penalty or post collateral or guarantees by the date ordered by the Director.
(6) A licensee has failed to pay an assessment as required by Section 5-30.

(b) The Director may revoke a license if the Director finds, after an administrative hearing, that any of the grounds for suspension under item (a)(1), (a)(2), (a)(3), (a)(4), (a)(5), or (a)(6) of Section 15-40 have occurred.

(c) 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) 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) 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. 93-225, eff. 7-21-03.)

(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 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 felony.

(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 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 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 felony.

(h) In case of a continuing violation, each day a violation occurs constitutes a separate and distinct offense.

(Source: P.A. 93-225, eff. 7-21-03.)

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