Prior to the issuance of a license, as a livestock dealer, each applicant therefor shall file a surety bond with the Department, conditioned on his performance of all duties required by law of a livestock dealer. The form of such bond shall be prescribed by the Department. The bond shall specifically provide that the livestock dealer shall pay when due, to the person or persons entitled thereto, the purchase price of all livestock purchased by the livestock dealer. The surety on any such bond shall be a surety company authorized to do business within the State of Illinois. The amount of such bond shall be not less than the nearest multiple of $2,000 above the average amount of livestock purchases by such livestock dealer for 3 business days, based on the total number of business days, and the total amount of such sales and purchases in the preceding 12 months, or in such part thereof in which such livestock dealer did business, if any. For the purpose of this computation, 260 days shall be deemed the number of business days in the year. However, the amount of the bond shall not be less than $6,000, and when the bond requirements exceed $50,000 calculated on the livestock purchases as hereinbefore specified, the amount of the bond need not exceed $50,000 plus 15% of the excess. Whenever there has been a change in the gross amount of business transacted during the 12-month period prior to the renewal of any license which would warrant an increase or decrease in the amount of bond coverage required under this Act, the livestock dealer shall have his bond adjusted accordingly upon receipt of notice to that effect. A blanket bond based upon the gross amount of business transacted on an annual basis for each enterprise operated under the same ownership may be furnished by licensees in lieu of individual bonds for each enterprise operated if they so desire. Such bond shall be continuous in nature and shall provide that it may not be cancelled without 30 days written notice of termination to the Department prior to the effective date of such termination. In cases where a livestock dealer under this Act has a bond on file with the United States Department of Agriculture, Packers and Stockyards, Agricultural Marketing Service, or any successor agency, and such bond is in an amount and conditioned upon such terms so as to meet the requirements of this Act, separate bond coverage under this Act is not required. In any case where an applicant has sufficient bond posted with the United States Department of Agriculture, Packers and Stockyards, Agricultural Marketing Service, or any successor agency, to satisfy the provisions 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.
     In lieu of filing such bond, the livestock dealer 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, such cash or securities to be deposited in escrow under agreement conditioned as in the case of such bond. Such trust fund agreement shall be on forms prescribed by the Department. 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 livestock dealer of record in the county where the livestock dealer resides.
     Any livestock dealer 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 such 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. Such 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 agreement. An action for recovery against this trust agreement with related letter of credit may be brought in the same manner as in case of an action for recovery on a bond filed hereunder. This letter of credit with trust agreement may be terminated by any party to the agreement by providing the Department with written notice of such termination of at least 30 days prior to the effective date of termination. In any case when a livestock dealer has elected to maintain one or more irrevocable letters of credit with 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 with trust agreements shall satisfy the provisions of this Act, and such letters of credit with trust agreements shall replace the State letters of credit with trust agreements as if they were the State letters of credit with 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 livestock dealer covered by such bond, he shall notify the livestock dealer to adjust such bond to meet the requirements of this Section, or, if such bond is inadequate because of the volume of business conducted on a seasonal or otherwise irregular basis, to meet such requirements as may be determined by the Director to be reasonable based upon such seasonal or irregular operation.