Current through Register Vol. 50, No. 6, December 1, 2023
RELATES TO: KRS 149.010, 149.020
NECESSITY, FUNCTION, AND CONFORMITY: KRS 149.010(2) requires
the director of the Division of Forestry, with the approval of the Secretary of
the Energy and Environment Cabinet, to promulgate administrative regulations
necessary to carry out the functions assigned to the cabinet. 149.020
authorizes the cabinet to receive by donation, purchase, or lease lands, for
forestry purposes, and may convey, exchange, or lease those lands and may sell
timber or other forest products thereon. This administrative regulation
establishes the requirements of major and minor timber sales.
Section 1. Definitions.
(1) "Director" means the director of the
Division of Forestry.
(2) "Major
timber sales" means sales of merchantable timber with a return of $25,000 or
more in cash receipts to the Division of Forestry.
(3) "Minor timber sales" means sales of
merchantable timber with a return of less than $25,000 in cash receipts to the
Division of Forestry.
Section
2. Major Timber Sales from State Forests. Timber may be harvested
from a state forest for sale pursuant to KRS 149.020. Major timber sales shall
be conducted in accordance with the requirements of this section.
(1) Advertisement.
(a) The Division of Forestry shall mail a
timber sale packet to each prospective buyer a minimum of three (3) weeks
before bid opening. The sale shall be advertised at least one (1) time in three
(3) local newspapers or three times (3) in one (1) local newspaper.
(b) A timber sale packet shall be prepared
for each sale and shall include a:
1. Timber
Sale Prospectus, including pertinent details of the sale;
2. Bid for advertised timber;
3. Summary of Timber Marked if the trees are
individually designated, or a Cruise Summary if it is a boundary
sale;
4. Timber Sale
Contract;
5. Map of the sale area;
and
6. Self-addressed sealed bid
envelope.
(2)
Contract.
(a) Timber shall be sold by written
timber sales contract. The terms shall be adequate in the judgment of the
director to protect the interests of the Commonwealth.
1. The timber sale contract shall be awarded
immediately after bid opening.
2.
Full payment for the timber sold shall be submitted within five (5) working
days of awarding the contract.
(b) A certified check, made payable to
Kentucky State Treasurer in an amount not less than $2,500 or more than ten
(10) percent of the established minimum bid, shall be required as a sign of
good faith to accompany each bid.
1. The bid
shall be considered as part of the total sale price of the successful
bidder.
2. Deposits of unsuccessful
bidders shall be returned.
(c) As a guarantee of the performance of the
terms of the contract, the successful bidder shall, within five (5) days of the
date of the contract, deposit with the Division of Forestry a certified check
as performance bond in the amount of not more than ten (10) percent of the
established minimum bid, but not less than $2,500.
1. In lieu of the posting of the certified
check as a performance bond, the successful bidder may post a surety bond with
surety satisfactory to the Division of Forestry.
2. The bond shall be held until the
completion of the terms of the contract.
(3) Compliance.
(a) The timber purchaser shall be required to
comply with all timber sale contract requirements.
1. During ongoing harvesting activities, the
operation shall be inspected by the local state forest administrator at least
once every two (2) weeks to access compliance and to be available to answer any
questions the purchaser may have.
2. If the purchaser is found in
non-compliance with the contract, then the purchaser shall be informed and told
what corrective measures shall be taken.
(b) The timber purchaser shall be required to
maintain compliance with best management practices pursuant to 402 KAR 3:030.
(c) If the purchaser fails
or refuses to comply with the direction given by the state forest
administrator, then the operation shall be suspended or terminated in
accordance with the timber sale contract.
(d) Upon satisfactory completion of all terms
of the contract and payment of any damages incurred, the Division of Forestry
shall release the purchaser's performance bond.
(4) Minimum Bid. A minimum acceptable bid
shall be determined for each sale and shall be stated as a part of the timber
sale packet advertisement.
(a) A guide for
determining the minimum bid shall be calculated by indexing the current price
of No. 1 common lumber for each species, multiplying by the general profit or
risk percentage and commission for industry in the particular area of the sale,
and subtracting average logging, milling and drying cost.
(b) The price of No. 2 common lumber may be
substituted for No. 1 common lumber on low quality species.
(c) The director may adjust the minimum bid
established in subsection (4) of this section, as necessary, based on the
director's professional knowledge, general market conditions in the local area,
and the special characteristic of the individual sale.
(5) Negotiated Sale. If bids are not received
on an advertised tract of timber, the Division of Forestry, with the approval
of the director, may negotiate the sale of the tract of timber if it is judged
in the best interest of the Division of Forestry and the Commonwealth.
(a) Negotiated sales shall be for no less
than the minimum bid.
(b) The
contract shall be executed within six (6) months of the bid opening
date.
Section
3. Minor Timber Sales from State Forests.
(1) Timber may be harvested from a state
forest for sale pursuant to KRS 149.020. Minor timber sales shall require:
(a) A performance bond of $500 or five (5)
percent of the winning bid amount, whichever is greater;
(b) Full payment for products and performance
bonds, if necessary, to be made within five (5) working days of execution of
the permit; and
(c) The timber
purchaser to maintain compliance with best management practices pursuant to 402 KAR 3:030.
(2) A
potential buyer for minor timber sales shall notify the division and the sales
shall be carried out under the supervision of the Division of
Forestry.
(3) If time is
insufficient, harvest or salvage operations in preparation for land use change
as approved by the director of the Division of Forestry may exceed the $25,000
maximum limitation.
11 Ky.R. 669; eff.
11-13-1984; 41 Ky.R. 2619; 42 Ky.R. 281; eff. 9-3-2015 44 Ky.R. 577, 922; eff.
11-2-2017; Crt eff. 7-3-2018.
STATUTORY AUTHORITY: KRS 149.010(2),
149.020