Or. Admin. Code § 629-032-0060

Current through Register Vol. 63, No. 11, November 1, 2024

Section 629-032-0060 - Settlement of Default

(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.

Or. Admin. Code § 629-032-0060

FB 4-1987, f. & ef. 9-8-87; FB 3-1990, f. 6-26-90, cert. ef. 6-19-90

Stat. Auth.: ORS 526 & ORS 530

Stats. Implemented: ORS 526.041, ORS 530.059 & ORS 530.065