Statutes > Illinois Statutes > CHAPTER 240 WAREHOUSES > 240 ILCS 40/ Grain Code. > Article 5 - Licensing

Article 5 - Licensing


      (240 ILCS 40/Art. 5 heading)
ARTICLE 5. LICENSING

    (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, 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, 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. 93‑225, eff. 7‑21‑03.)

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

    (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 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 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. 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. 93‑225, eff. 7‑21‑03.)

    (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, 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 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 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. 93‑225, eff. 7‑21‑03.)

    (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. Each location where the licensee is transacting 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 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. 93‑225, eff. 7‑21‑03.)

    (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, 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 shall be paid at the time of or before the issuance of a new license, the second installment shall be paid on or before the first anniversary date of the issuance of the new license, and the third installment shall be paid on or before the second anniversary date of the issuance of the new license. For a grain dealer, the payment of each of the 3 installments shall be based upon the total estimated value of grain purchases by the grain dealer for the applicable year with the final installment 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, 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 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 for the first installment
     shall be $500 and the maximum shall be $15,000.
        (3) The second installment 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 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 shall be $250 per year and the maximum for each year shall be $7,500.
        (6) Each of the newly licensed 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 shall be paid within 30 days after notification by the Department.
        (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 for the first installment
     shall be $500 and the maximum shall be $15,000.
        (3) The second and third installments 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 for the second and third