Oregon Administrative Rules
Chapter 629 - DEPARTMENT OF FORESTRY
Division 32 - PROCEDURES GOVERNING DEFAULTS ON BOARD OF FORESTRY TIMBER SALE CONTRACTS
Section 629-032-0060 - Settlement of Default
Universal Citation: OR Admin Rules 629-032-0060
Current through Register Vol. 63, No. 9, September 1, 2024
(1) In the event of default, the forester may terminate the contract and assess damages and expenses using the formula; D = (OSV+AC)-(PR+RSV), where:
(a) D = Damages and Expenses;
(b) OSV = Original Sale Value (timber value
only -- does not include project value). The original sale value shall be
adjusted to reflect estimated overruns or underruns on recovery
sales;
(c) AC = Administrative
Costs. These costs include both the field and office costs required for the
preparation of the defaulted parcel for resale. These costs also include
rehabilitation or regeneration delay costs, legal service costs, interest, and
other costs allowed by law;
(d) PR
= Payments Received;
(e) RSV =
Remaining Sale Value. Dependent upon when settlement is made, the value of the
remaining timber shall be determined by the forester using the Department of
Forestry's log prices and logging costs in effect at the time of default or
immediately prior to resale; or shall be based upon the price bid for the
timber in the resale; or shall be based on the actual value of timber removed
in the resale.
(2) The purchaser shall have the following options for settlement of the default:
(a) Settlement prior to resale:
(A) A purchaser may settle a default prior to
the resale of the defaulted parcel by paying balances owing the state plus any
other damages and expenses incurred by the state as a result of the
default;
(B) Damages and expenses
shall include, but not be limited to, any estimated costs and losses resulting
from resale of the parcel and any estimated rehabilitation or regeneration
delay costs and losses in areas which have been harvested.
(b) Settlement after resale:
(A) Cash Resale. The purchaser shall be
responsible for any monies due the state if the balance of payments owing and
other damages and expenses incurred as a result of the default are not offset
by the values of the resale on a cash basis. Such balances shall be due 30 days
after the date of billing by State. If payment is not made within 30 days, it
shall be subject to an interest charge starting from the date of billing until
full payment is received;
(B)
Recovery Resale. The purchaser shall be responsible for any monies due the
State if the balance of payments owing and other damages and expenses incurred
as a result of the default are not offset by the values in the new sale on a
recovery basis. The purchaser shall have the option of settling with the state
based upon the resale bid and the state's estimate of volume and value to be
recovered. If this option is not exercised within 30 days of the date of
billing by state, then payment shall be subject to an interest charge starting
from the date of billing until full payment is received, or from the date of
original billing if non-payment is the cause of default;
(C) Settlement after completion of recovery
resale. The purchaser has the option of waiting until the actual volume and
value has been determined upon completion of a recovery resale before making a
settlement. However, the purchaser shall be required to pay an interest charge
on the actual value of the completed sale from the date of the original billing
until full payment is received, or from the date of original billing if
non-payment is the cause of default.
(c) Without Resale. In the event a defaulted
sale is offered for resale but does not sell, or if the forester determines a
defaulted sale is not resaleable, the difference between the appraised price
(including estimated bid-up) of the sale at time of default and the original
bid price, plus any damages and expenses and interest due, shall become the
basis for settlement of the defaulted contract. Payments shall be due within 30
days after the billing by State. If payment is not made within 30 days, it
shall be subject to an interest charge from the date of billing. Examples of
situations in which sales may not be resaleable would include, but not be
limited to the following:
(A) The resale of
remaining timber must be added to another sale to make it resaleable so that
the original sale loses its identity;
(B) Anticipated revenue from the resale would
be less than the cost of making the sale;
(C) There is no market for the remaining
timber;
(D) The resale would not be
scheduled within two years from date of default;
(E) Environmental restrictions prohibit
resale;
(F) The defaulted sale area
is included in exchange plans.
(3) In the event of default because of the purchaser's injury to or severance of timber not included in the sale, the forester may terminate the contract and/or assess damages and expenses in the amount of:
(a) Treble the market value of the
severed or injured timber if the purchaser's action is wilful or intentional;
or
(b) Double the market value of
the severed or injured timber if the purchaser's action is not wilful or
intentional.
(4) Any damages assessed for injury or severance are in addition to and not in lieu of any damages to which the forester may be entitled under section(1) of this rule.
Stat. Auth.: ORS 526 & ORS 530
Stats. Implemented: ORS 526.041, ORS 530.059 & ORS 530.065
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