§ 10-15 — Price later contracts

(a) Price later contracts shall contain provisions prescribed or authorized by the Department and shall be in either written or electronic form. If in written form, 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.

Legislative History

(Source: P.A. 96-464, eff. 8-14-09.)