225 ILCS 640/3 — Illinois Code / Chapter 225 / Act 640 / Section 3
Section 3
Status: in_force

(225 ILCS 640/3) (from Ch. 121 1/2, par. 210) Sec. 3. Each applicant for a license to operate and conduct a livestock auction market shall file a bond with the Department. The amount of the required bond shall be an average of the total dollar value of livestock sold at auction throughout the year. The total dollar value of livestock sold during the year shall be divided by the number of sales held during the year. The amount of bond must be the next multiple of $5,000 above the average of the total dollar value of livestock sold. When the computed amount of bond exceeds $50,000, the amount of bond shall be $50,000, plus 10 percent of the excess over $50,000, raised to the next $5,000 multiple. In no case shall the amount of bond be less than $10,000. Such bond shall be conditioned for the prompt remittance to consignors of the proceeds from any sale or exchange of livestock. Such bond shall be in a form and with sureties satisfactory to the Department, shall provide that it may not be cancelled without 30 days notice in writing to the Department, and shall name the Director as trustee. Such bond shall be for the use and benefit of any consignor suffering loss or damage by breach of the condition thereof and any such consignor may bring action for recovery thereon. In lieu of filing such bond, the operator of a livestock auction market may deliver to the Department the receipt of a duly authorized bank, savings and loan association or trust company in this State showing the deposit with the bank, savings and loan association or trust company of cash or of securities endorsed in blank by the owner thereof and of a market value equal at least to the required principal amount of such bond, the cash or securities to be deposited in escrow under agreement conditioned as in the case of the bond. An action for recovery against any such deposit may be brought in the same manner as in the case of an action for recovery on a bond filed hereunder. Any such receipt shall further be accompanied by evidence that there are no unsatisfied judgments against the operator of such livestock auction market of record in the county where the operator resides. When a licensee under this Act has a bond on file with the United States Department of Agriculture, Packers and Stockyards Administration, or any successor agency, and such bond is in an amount and conditioned upon such terms as meet the conditions of this Act, a duplicate original of such bond shall be furnished to the Department, and such bond shall replace the State bond as if it were the State bond. The Director shall be named as trustee in such bond, and such bond may not be cancelled without 30 days notice in writing to the Department. Any operator of a livestock auction market required to maintain a surety bond under this Act may elect to maintain, in whole or partial substitution for such surety bond, one or more irrevocable letters of credit on which a trustee is authorized to draw funds subject to a trust agreement. The amount of letters of credit, surety bond, trust fund agreement, or combination thereof, must be the total amount of the surety bond otherwise required under this Act. Letters of credit and trust agreements shall be on forms prescribed by the Department. Any letter of credit must be issued for a period of not less than one year. The Director shall be trustee on any such trust agreements. An action for recovery against this trust agreement may be brought in the same manner as in the case of an action for recovery on a bond filed hereunder. This letter of credit and trust agreement may be terminated by any party to the agreement by providing the Illinois Department of Agriculture with written notice of such termination at least 30 days prior to the effective date of termination. In any case when an operator of a livestock auction market has elected to maintain one or more irrevocable letters of credit and related trust agreements, in order to fulfill the bonding requirements of the Packers and Stockyards Administration, United States Department of Agriculture, or any successor agency, such letters of credit and trust agreements shall satisfy the provisions of this Act, and such letters of credit and trust agreements shall replace the State letters of credit and trust agreement as if they were the State letters of credit and trust agreements. Whenever the Director has reason to believe that any bond, or bond substitute, filed or maintained under this Act is inadequate to secure the performance of the obligations of the operator of the livestock auction market covered by such bond, he shall notify the operator of the livestock auction market to adjust such bond to meet the requirements of this Section or, if such bond is inadequate to meet such requirements as may be determined by the Director to be reasonable based upon such seasonal or irregular operation. (Source: P.A. 86-231; 87-160.)