HF 778

1st Engrossment - 88th Legislature (2013 - 2014) Posted on 03/20/2013 03:32pm

A bill for an act
relating to natural resources; providing for exchange of road easements;
modifying forest management investment account; modifying State Timber
Act; appropriating money; amending Minnesota Statutes 2012, sections
89.0385; 90.01, subdivisions 4, 5, 6, 8, 11; 90.031, subdivision 4; 90.041,
subdivisions 2, 5, 6, 9, by adding subdivisions; 90.045; 90.061, subdivision
8; 90.101, subdivision 1; 90.121; 90.145; 90.151, subdivisions 1, 2, 3, 4, 6,
7, 8, 9; 90.161; 90.162; 90.171; 90.181, subdivision 2; 90.191, subdivision 1;
90.193; 90.195; 90.201, subdivision 2a; 90.211; 90.221; 90.252, subdivision 1;
90.301, subdivisions 2, 4; 90.41, subdivision 1; proposing coding for new law in
Minnesota Statutes, chapters 84; 90; repealing Minnesota Statutes 2012, sections
90.163; 90.173; 90.41, subdivision 2.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [84.633] EXCHANGE OF ROAD EASEMENTS.
new text end

new text begin Subdivision 1. new text end

new text begin Authority. new text end

new text begin The commissioner of natural resources, on behalf of
the state, may convey a road easement according to this section for access across state
land under the commissioner's jurisdiction in exchange for a road easement for access to
property owned by the United States, the state of Minnesota or any of its subdivisions, or a
private party. The exercise of the easement across state land must not cause significant
adverse environmental or natural resources management impacts.
new text end

new text begin Subd. 2. new text end

new text begin Substantially equal acres. new text end

new text begin The acres covered by the state easement
conveyed by the commissioner must be substantially equal to the acres covered by the
easement being received by the commissioner. For purposes of this section, "substantially
equal" means that the acres do not differ by more than 20 percent. The commissioner's
finding of substantially equal acres is in lieu of an appraisal or other determination of
value of the lands.
new text end

new text begin Subd. 3. new text end

new text begin School trust lands. new text end

new text begin If the commissioner conveys a road easement over
school trust land to a nongovernmental entity, the term of the road easement is limited
to 50 years. The easement exchanged with the state may be limited to 50 years or may
be perpetual.
new text end

new text begin Subd. 4. new text end

new text begin Terms and conditions. new text end

new text begin The commissioner may impose terms and
conditions of use as necessary and appropriate under the circumstances. The state may
accept an easement with similar terms and conditions as the state easement.
new text end

new text begin Subd. 5. new text end

new text begin Survey. new text end

new text begin If the commissioner determines that a survey is required, the
governmental unit or private landowner shall pay to the commissioner a survey fee of not
less than one half of the cost of the survey as determined by the commissioner.
new text end

new text begin Subd. 6. new text end

new text begin Application fee. new text end

new text begin When a private landowner or governmental unit, except
the state, presents to the commissioner an offer to exchange road easements, the private
landowner or governmental unit shall pay an application fee as provided under section
84.63 to cover reasonable costs for reviewing the application and preparing the easements.
new text end

new text begin Subd. 7. new text end

new text begin Title. new text end

new text begin If the commissioner determines it is necessary to obtain an opinion
as to the title of the land being encumbered by the easement that will be received by the
commissioner, the governmental unit or private landowner shall submit an abstract of title
or other title information sufficient to determine possession of the land, improvements,
liens, encumbrances, and other matters affecting title.
new text end

new text begin Subd. 8. new text end

new text begin Disposition of fees. new text end

new text begin (a) Any fee paid under subdivision 5 must be credited
to the account from which expenses are or will be paid and the fee is appropriated for the
expenditures in the same manner as other money in the account.
new text end

new text begin (b) Any fee paid under subdivision 6 must be deposited in the land management
account in the natural resources fund and is appropriated to the commissioner to cover the
reasonable costs incurred for preparing and issuing the state road easement and accepting
the road easement from the private landowner or governmental entity.
new text end

Sec. 2.

Minnesota Statutes 2012, section 89.0385, is amended to read:

89.0385 FOREST MANAGEMENT INVESTMENT ACCOUNT; COST
CERTIFICATION.

(a) deleted text begin After each fiscal year, deleted text end The commissioner shall certify the total costs incurred for
forest management, forest improvement, and road improvement on state-managed lands
during deleted text begin that deleted text end new text begin a fiscal new text end year. The commissioner shall distribute forest management receipts
credited to various accounts according to this section.

(b) The amount of the certified costs incurred for forest management activities on
state lands shall be transferred from the account where receipts are deposited to the forest
management investment account in the natural resources fund, except for those costs
certified under section 16A.125. new text begin Transfers may occur quarterly, based on quarterly cost and
revenue reports, throughout the fiscal year, with final certification and reconciliation after
each fiscal year. new text end Transfers in a fiscal year cannot exceed receipts credited to the account.

Sec. 3.

Minnesota Statutes 2012, section 90.01, subdivision 4, is amended to read:

Subd. 4.

Scaler.

"Scaler" means a qualified bonded person designated by the
commissioner to measure new text begin timber and new text end cut forest products.

Sec. 4.

Minnesota Statutes 2012, section 90.01, subdivision 5, is amended to read:

Subd. 5.

State appraiser.

"State appraiser" means an employee of the department
designated by the commissioner to appraise state lands new text begin , which includes, but is not limited
to, timber and other forest resource products, for volume, quality, and value new text end .

Sec. 5.

Minnesota Statutes 2012, section 90.01, subdivision 6, is amended to read:

Subd. 6.

Timber.

"Timber" means trees new text begin , shrubs, or woody plants, new text end that will produce
forest products of value whether standing or down, and including but not limited to logs,
new text begin sawlogs, new text end posts, poles, bolts, pulpwood, cordwood, new text begin fuelwood, woody biomass, new text end lumber new text begin ,
new text end and new text begin woody new text end decorative material.

Sec. 6.

Minnesota Statutes 2012, section 90.01, subdivision 8, is amended to read:

Subd. 8.

Permit holder.

"Permit holder" means the person deleted text begin holding deleted text end new text begin who is the
signatory of new text end a permit to cut timber on state lands.

Sec. 7.

Minnesota Statutes 2012, section 90.01, subdivision 11, is amended to read:

Subd. 11.

Effective permit.

"Effective permit" means a permit for which the
commissioner has on file full or partial deleted text begin surety deleted text end new text begin security new text end as required by section 90.161 deleted text begin , deleted text end new text begin or
new text end 90.162 deleted text begin , 90.163, or 90.173 deleted text end or, in the case of permits issued according to section 90.191 or
90.195, the commissioner has received a down payment equal to the full appraised value.

Sec. 8.

Minnesota Statutes 2012, section 90.031, subdivision 4, is amended to read:

Subd. 4.

Timber rules.

The Executive Council may formulate and establish, from
time to time, rules it deems advisable for the transaction of timber business of the state,
including approval of the sale of timber on any tract in a lot exceeding deleted text begin 6,000 deleted text end new text begin 12,000 new text end cords
in volume when the sale is in the best interests of the state, and may abrogate, modify,
or suspend rules at its pleasure.

Sec. 9.

Minnesota Statutes 2012, section 90.041, subdivision 2, is amended to read:

Subd. 2.

Trespass on state lands.

The commissioner may compromise and settle,
with deleted text begin the approval of deleted text end new text begin notification to new text end the attorney general, upon terms the commissioner
deems just, any claim of the state for casual and involuntary trespass upon state lands or
timber; provided that no claim shall be settled for less than the full value of all timber
or other materials taken in casual trespass or the full amount of all actual damage or
loss suffered by the state as a result. new text begin Upon request, new text end the commissioner shall advise the
Executive Council of any information acquired by the commissioner concerning any
trespass on state lands, giving all details and names of witnesses and all compromises and
settlements made under this subdivision.

Sec. 10.

Minnesota Statutes 2012, section 90.041, subdivision 5, is amended to read:

Subd. 5.

Forest improvement contracts.

The commissioner may contract as part
of the timber sale with the purchaser of state timber at either informal or auction sale
for deleted text begin the following deleted text end forest improvement work to be done on the land included within the
sale area deleted text begin : deleted text end new text begin . Forest improvement work may include activities relating to new text end preparation of
the site for seeding or planting of seedlings or trees, seeding or planting of seedlings or
trees, and other activities deleted text begin relating deleted text end new text begin related new text end to forest regeneration new text begin or deemed necessary by
the commissioner to accomplish forest management objectives, including those related
to water quality protection, trail development, and wildlife habitat enhancement new text end . A
contract issued under this subdivision is not subject to the competitive bidding provisions
of chapter 16C and is exempt from the contract approval provisions of section 16C.05,
subdivision 2. new text begin The bid value received in the sale of the timber and the contract bid
cost of the improvement work may be combined and the total value may be considered
by the commissioner in awarding forest improvement contracts under this section.
The commissioner may refuse to accept any and all bids received and cancel a forest
improvement contract sale for good and sufficient reasons.
new text end

Sec. 11.

Minnesota Statutes 2012, section 90.041, subdivision 6, is amended to read:

Subd. 6.

Sale of damaged timber.

The commissioner may sell at public auction
timber that has been damaged by fire, windstorm, flood, new text begin insect, disease, new text end or other natural
cause on notice that the commissioner considers reasonable when there is a high risk that
the salvage value of the timber would be lost.

Sec. 12.

Minnesota Statutes 2012, section 90.041, subdivision 9, is amended to read:

Subd. 9.

Reoffering unsold timber.

deleted text begin To maintain and enhance forest ecosystems on
state forest lands, deleted text end The commissioner may reoffer timber tracts remaining unsold under the
provisions of section 90.101 below appraised value at public auction with the required
30-day notice under section 90.101, subdivision 2.

Sec. 13.

Minnesota Statutes 2012, section 90.041, is amended by adding a subdivision
to read:

new text begin Subd. 10. new text end

new text begin Fees. new text end

new text begin (a) The commissioner may establish a fee schedule that covers the
commissioner's cost of issuing, administering, and processing various permits, permit
modifications, transfers, assignments, amendments, and other transactions necessary to the
administration of activities under this chapter.
new text end

new text begin (b) A fee established under this subdivision is not subject to the rulemaking
provisions of chapter 14 and section 14.386 does not apply. The commissioner may
establish fees under this subdivision notwithstanding section 16A.1283.
new text end

Sec. 14.

Minnesota Statutes 2012, section 90.041, is amended by adding a subdivision
to read:

new text begin Subd. 11. new text end

new text begin Debarment. new text end

new text begin The commissioner may debar a permit holder if the holder
is convicted in Minnesota at the gross misdemeanor or felony level of criminal willful
trespass, theft, fraud, or antitrust violation involving state, federal, county, or privately
owned timber in Minnesota or convicted in any other state involving similar offenses and
penalties for timber owned in that state. The commissioner shall cancel and repossess the
permit directly involved in the prosecution of the crime. The commissioner shall cancel
and repossess all other state timber permits held by the permit holder after taking from
all security deposits money to which the state is entitled. The commissioner shall return
the remainder of the security deposits, if any, to the permit holder. The debarred permit
holder is prohibited from bidding, possessing, or being employed on any state timber
permit during the period of debarment. The period of debarment is not less than one year
or greater than three years. The duration of the debarment is based on the severity of the
violation, past history of compliance with timber permits, and the amount of loss incurred
by the state arising from violations of timber permits.
new text end

Sec. 15.

Minnesota Statutes 2012, section 90.045, is amended to read:

90.045 APPRAISAL STANDARDS.

By July 1, 1983, the commissioner shall establish specific timber appraisal standards
according to which all timber appraisals will be conducted under this chapter. The
standards shall include a specification of the maximum allowable appraisal sampling error,
deleted text begin and deleted text end new text begin including new text end the procedures for tree defect allowance, tract area estimation, product
volume estimation, and product value determination. The timber appraisal standards shall
be included in each edition of the timber sales manual published by the commissioner. In
addition to the duties pursuant to section 90.061, every state appraiser shall work within
the guidelines of the timber appraisal standards. The standards shall not be subject to
the rulemaking provisions of chapter 14.

Sec. 16.

Minnesota Statutes 2012, section 90.061, subdivision 8, is amended to read:

Subd. 8.

Appraiser authority; form of documents.

State appraisers are
empowered, with the consent of the commissioner, to perform any scaling, and generally
to supervise the cutting and removal of timber new text begin and forest products new text end on or from state lands
so far as may be reasonably necessary to insure compliance with the terms of the permits
or other contracts governing the same and protect the state from loss.

The form of appraisal reports, records, and notes to be kept by state appraisers
shall be as the commissioner prescribes.

Sec. 17.

Minnesota Statutes 2012, section 90.101, subdivision 1, is amended to read:

Subdivision 1.

Sale requirements.

The commissioner may sell the timber on any
tract of state land and may determine the number of sections or fractional sections of land
to be included in the permit area covered by any one permit issued to the purchaser of
timber on state lands, or in any one contract or other instrument relating thereto. No
timber shall be sold, except (1) to the highest responsible bidder at public auction, or
(2) if unsold at public auction new text begin , new text end the commissioner may offer the timber for private sale
for a period of no more than deleted text begin six months deleted text end new text begin one year new text end after the public auction to any deleted text begin person
deleted text end new text begin responsible bidder new text end who pays the appraised value for the timber. The minimum price shall
be the appraised value as fixed by the report of the state appraiser. Sales may include tracts
in more than one contiguous county or forestry administrative area and shall be held either
in the county or forestry administrative area in which the tract is located or in an adjacent
county or forestry administrative area that is nearest the tract offered for sale or that is
most accessible to potential bidders. In adjoining counties or forestry administrative areas,
sales may not be held less than two hours apart.

Sec. 18.

Minnesota Statutes 2012, section 90.121, is amended to read:

90.121 INTERMEDIATE AUCTION SALES; MAXIMUM LOTS OF 3,000
CORDS.

(a) The commissioner may sell the timber on any tract of state land in lots not
exceeding 3,000 cords in volume, in the same manner as timber sold at public auction under
section 90.101, and related laws, subject to the following special exceptions and limitations:

(1) the commissioner shall offer all tracts authorized for sale by this section
separately from the sale of tracts of state timber made pursuant to section 90.101;

(2) no bidder may be awarded more than 25 percent of the total tracts offered at the
first round of bidding unless fewer than four tracts are offered, in which case not more than
one tract shall be awarded to one bidder. Any tract not sold at public auction may be offered
for private sale as authorized by section 90.101, subdivision 1, new text begin 30 days after the auction new text end to
deleted text begin persons deleted text end new text begin responsible bidders new text end eligible under this section at the appraised value; and

(3) no sale may be made to a deleted text begin person deleted text end new text begin responsible bidder new text end having more than 30
employees. For the purposes of this clause, "employee" means an individual working in
the timber or wood products industry for salary or wages on a full-time or part-time basis.

(b) The auction sale procedure set forth in this section constitutes an additional
alternative timber sale procedure available to the commissioner and is not intended to
replace other authority possessed by the commissioner to sell timber in lots of 3,000
cords or less.

(c) Another bidder or the commissioner may request that the number of employees a
bidder has pursuant to paragraph (a), clause (3), be confirmed new text begin by signed affidavit new text end if there is
evidence that the bidder may be ineligible due to exceeding the employee threshold. The
commissioner shall request information from the commissioners of labor and industry and
employment and economic development including the premiums paid by the bidder in
question for workers' compensation insurance coverage for all employees of the bidder.
The commissioner shall review the information submitted by the commissioners of labor
and industry and employment and economic development and make a determination based
on that information as to whether the bidder is eligible. A bidder is considered eligible and
may participate in intermediate auctions until determined ineligible under this paragraph.

Sec. 19.

Minnesota Statutes 2012, section 90.145, is amended to read:

90.145 PURCHASER QUALIFICATIONS deleted text begin AND deleted text end new text begin , new text end REGISTRATION new text begin , AND
REQUIREMENTS new text end .

Subdivision 1.

Purchaser deleted text begin qualifications deleted text end new text begin requirements new text end .

(a) In addition to any other
requirements imposed by this chapter, the purchaser of a state timber permit issued under
section 90.151 must meet the requirements in paragraphs (b) to deleted text begin (d) deleted text end new text begin (e) new text end .

(b) The purchaser deleted text begin and deleted text end new text begin or new text end the purchaser's agents, employees, subcontractors, and
assigns new text begin conducting logging operations on the timber permit new text end must comply with general
industry safety standards for logging adopted by the commissioner of labor and industry
under chapter 182. The commissioner of natural resources deleted text begin shall deleted text end new text begin may new text end require a purchaser
to provide proof of compliance with the general industry safety standards.

(c) The purchaser deleted text begin and deleted text end new text begin or new text end the purchaser's agents, subcontractors, and assigns
new text begin conducting logging operations on the timber permit new text end must comply with the mandatory
insurance requirements of chapter 176. The commissioner deleted text begin shall deleted text end new text begin may new text end require a purchaser
to provide a copy of the proof of insurance required by section 176.130 before the start of
harvesting operations on any permit.

(d) Before the start of harvesting operations on any permit, the purchaser must certify
that a foreperson or other designated employee who has a current certificate of completion new text begin ,
new text end new text begin which includes instruction in site-level forest management guidelines or best management
practices, new text end from the Minnesota Logger Education Program (MLEP), the Wisconsin Forest
Industry Safety and Training Alliance (FISTA), or any similar new text begin continuous education
new text end program acceptable to the commissioner, is supervising active logging operations.

new text begin (e) The purchaser and the purchaser's agents, employees, subcontractors, and assigns
who will be involved with logging or scaling state timber must be in compliance with
this chapter.
new text end

Subd. 2.

Purchaser deleted text begin preregistration deleted text end new text begin registration new text end .

To facilitate the sale of permits
issued under section 90.151, the commissioner may establish a deleted text begin purchaser preregistration
deleted text end new text begin registration new text end system new text begin to verify the qualifications of a person as a responsible bidder to
purchase a timber permit new text end . Any system implemented by the commissioner shall be limited
in scope to only that information that is required for the efficient administration of the
purchaser qualification deleted text begin provisions deleted text end new text begin requirements new text end of this chapter deleted text begin and shall conform with the
requirements of chapter 13. deleted text end new text begin The registration system established under this subdivision is
not subject to the rulemaking provisions of chapter 14 and section 14.386 does not apply.
new text end

Sec. 20.

Minnesota Statutes 2012, section 90.151, subdivision 1, is amended to read:

Subdivision 1.

Issuance; expiration.

(a) Following receipt of the down payment
for state timber required under section 90.14 or 90.191, the commissioner shall issue a
numbered permit to the purchaser, in a form approved by the attorney general, by the
terms of which the purchaser shall be authorized to enter upon the land, and to cut and
remove the timber therein described as designated for cutting in the report of the state
appraiser, according to the provisions of this chapter. The permit shall be correctly
dated and executed by the commissioner and signed by the purchaser. If a permit is not
signed by the purchaser within deleted text begin 60 deleted text end new text begin 45 new text end days from the date of purchase, the permit cancels
and the down payment for timber required under section 90.14 forfeits to the state. The
commissioner may grant an additional period for the purchaser to sign the permit, not to
exceed deleted text begin five deleted text end new text begin ten new text end business days, provided the purchaser pays a deleted text begin $125 deleted text end new text begin $200 new text end penalty fee.

(b) The permit shall expire no later than five years after the date of sale as the
commissioner shall specify or as specified under section 90.191, and the timber shall
be cut new text begin and removed new text end within the time specified therein. deleted text begin All cut timber, equipment, and
buildings not removed from the land within 90 days after expiration of the permit shall
become the property of the state. deleted text end new text begin If additional time is needed, the permit holder must
request, prior to the expiration date, and may be granted, for good and sufficient reasons,
up to 90 additional days for the completion of skidding, hauling, and removing all
equipment and buildings. All cut timber, equipment, and buildings not removed from the
land after expiration of the permit becomes the property of the state.
new text end

(c) The commissioner may grant an additional period of time not to exceed deleted text begin 120 deleted text end new text begin 240
new text end days for the removal of cut timber, equipment, and buildings upon receipt of deleted text begin such deleted text end new text begin a written
new text end request by the permit holder for good and sufficient reasons. deleted text begin The commissioner may grant
a second period of time not to exceed 120 days for the removal of cut timber, equipment,
and buildings upon receipt of a request by the permit holder for hardship reasons only.
deleted text end new text begin The permit holder may combine in the written request under this paragraph the request
for additional time under paragraph (b).
new text end

Sec. 21.

Minnesota Statutes 2012, section 90.151, subdivision 2, is amended to read:

Subd. 2.

Permit requirements.

The permit shall state the amount of timber
estimated for cutting on the land, the estimated value thereof, and the price at which it is
sold new text begin in units of new text end per thousand feet, per cord, per piece, new text begin per ton, new text end or by whatever description
sold, and shall specify that all landings of cut products shall be legibly marked with the
assigned permit number. The permit shall provide for the continuous identification
new text begin and control new text end of the cut timber from the time of cutting until delivery to the consumer.
The permit shall provide that failure to continuously identify the timber as specified in
the permit constitutes trespass.

Sec. 22.

Minnesota Statutes 2012, section 90.151, subdivision 3, is amended to read:

Subd. 3.

Security provisions.

The permit shall contain such provisions as may be
necessary to secure to the state the title of all timber cut thereunder wherever found until
full payment therefor and until all provisions of the permit have been fully complied
with. The permit shall provide that from the date deleted text begin the same becomes effective deleted text end new text begin cutting
commences new text end until the expiration deleted text begin thereof deleted text end new text begin of the permit new text end , including all extensions, the
purchaser and successors in interest shall be liable to the state for the full permit price of
all timber covered thereby, notwithstanding any subsequent damage or injury thereto or
trespass thereon or theft thereof, and without prejudice to the right of the state to pursue
such timber and recover the value thereof anywhere prior to the payment therefor in full to
the state. new text begin If an effective permit is forfeited prior to any cutting activity, the purchaser is
liable to the state for a sum equal to the down payment and bid guarantee. new text end Upon recovery
from any person other than the permit holder, the permit holder shall be deemed released
to the extent of the net amount, after deducting all expenses of collecting same, recovered
by the state from such other person.

Sec. 23.

Minnesota Statutes 2012, section 90.151, subdivision 4, is amended to read:

Subd. 4.

Permit terms.

new text begin Once a permit becomes effective and cutting commences,
the permit holder is liable to the state for the permit price for all timber required to be cut,
including timber not cut. new text end The permit shall provide that all timber sold or designated for
cutting shall be cut deleted text begin without deleted text end new text begin in such a manner so as not to cause new text end damage to other timber;
that the permit holder shall remove all timber authorized new text begin and designated new text end to be cut under
the permit; that timber sold by deleted text begin board deleted text end measure new text begin identified in the permit, new text end but later determined
by the commissioner not to be convertible into deleted text begin board deleted text end new text begin the permit's new text end measure new text begin , new text end shall be paid
for by the piece or cord or other unit of measure according to the size, species, or value, as
may be determined by the commissioner; new text begin and new text end that all timber products, except as specified
by the commissioner, shall be scaled and the final settlement for the timber cut shall be
made on this scale deleted text begin ; and that the permit holder shall pay to the state the permit price for
all timber authorized to be cut, including timber not cut deleted text end .

Sec. 24.

Minnesota Statutes 2012, section 90.151, subdivision 6, is amended to read:

Subd. 6.

Notice and approval required.

The permit shall provide that the permit
holder shall not start cutting any state timber nor clear deleted text begin building sites deleted text end new text begin landings new text end nor logging
roads until the commissioner has been notified and has given prior approval to such
cutting operations. Approval shall not be granted until the permit holder has completed
a presale conference with the state appraiser designated to supervise the cutting. The
permit holder shall also give prior notice whenever permit operations are to be temporarily
halted, whenever permit operations are to be resumed, and when permit operations are to
be completed.

Sec. 25.

Minnesota Statutes 2012, section 90.151, subdivision 7, is amended to read:

Subd. 7.

Liability for timber cut in trespass.

The permit shall provide that the
permit holder shall pay the permit price value for any timber sold which is negligently
destroyed or damaged by the permit holder in cutting or removing other timber sold. If the
permit holder shall cut or remove or negligently destroy or damage any timber upon the
land described, not sold under the permit, except such timber as it may be necessary to cut
and remove in the construction of necessary logging roads and landings approved as to
location and route by the commissioner, such timber shall be deemed to have been cut in
trespass. The permit holder shall be liable for any such timber and recourse may be had
upon the deleted text begin bond deleted text end new text begin security deposit new text end .

Sec. 26.

Minnesota Statutes 2012, section 90.151, subdivision 8, is amended to read:

Subd. 8.

Suspension; cancellation.

The permit shall provide that the commissioner
shall have the power to order suspension of all operations under the permit when deleted text begin in the
commissioner's judgment deleted text end the conditions thereof have not been complied with and any
timber cut or removed during such suspension shall be deemed to have been cut in trespass;
that the commissioner may cancel the permit at any time deleted text begin when in the commissioner's
judgment the conditions thereof have not been complied with deleted text end new text begin due to a breach of the permit
conditions new text end and such cancellation shall constitute repossession of the timber by the state;
that the permit holder shall remove equipment and buildings from such land within 90 days
after such cancellation; that, if the purchaser at any time fails to pay any obligations to the
state under any other permits, any or all permits may be canceled; and that any timber new text begin cut
or new text end removed in violation of the terms of the permit or of any law shall constitute trespass.

Sec. 27.

Minnesota Statutes 2012, section 90.151, subdivision 9, is amended to read:

Subd. 9.

Slashings disposal.

The permit shall provide that the permit holder shall
deleted text begin burn or otherwise deleted text end dispose of new text begin or treat new text end all slashings or other refuse resulting from cutting
operations new text begin , as specified in the permit, new text end in the manner now or hereafter provided by law.

Sec. 28.

Minnesota Statutes 2012, section 90.161, is amended to read:

90.161 deleted text begin SURETY BONDS FOR AUCTION deleted text end new text begin SECURITY DEPOSITS
REQUIRED FOR EFFECTIVE new text end TIMBER PERMITS.

Subdivision 1.

deleted text begin Bond deleted text end new text begin Security deposit new text end required.

new text begin (a) new text end Except as otherwise provided
by law, the purchaser of any state timber, before any timber permit becomes effective for
any purpose, shall give deleted text begin a deleted text end good and valid deleted text begin bond deleted text end new text begin security in the form of cash; a certified
check; a cashier's check; a postal, bank, or express money order; a corporate surety bond;
or an irrevocable bank letter of credit new text end to the state of Minnesota equal to the value of all
timber covered or to be covered by the permit, as shown by the sale price bid and the
appraisal report as to quantity, less the amount of any payments pursuant to deleted text begin sections
deleted text end new text begin section new text end 90.14 deleted text begin and 90.163 deleted text end .

new text begin (b) new text end The deleted text begin bond deleted text end new text begin security deposit new text end shall be conditioned upon the faithful performance
by the purchaser and successors in interest of all terms and conditions of the permit and
all requirements of law in respect to timber sales. The deleted text begin bond deleted text end new text begin security deposit new text end shall be
approved in writing by the commissioner and filed for record in the commissioner's office.

new text begin (c) new text end deleted text begin In the alternative to cash and bond requirements, but upon the same conditions,
deleted text end A purchaser may post bond for 100 percent of the purchase price and request refund of the
amount of any payments pursuant to deleted text begin sections deleted text end new text begin section new text end 90.14 deleted text begin and 90.163 deleted text end . The commissioner
may credit the refund to any other permit held by the same permit holder if the permit is
delinquent as provided in section 90.181, subdivision 2, or may credit the refund to any
other permit to which the permit holder requests that it be credited.

new text begin (d) In the event of a default, the commissioner may take from the deposit the sum of
money to which the state is entitled. The commissioner shall return the remainder of the
deposit, if any, to the person making the deposit. When cash is deposited as security, it
shall be applied to the amount due when a statement is prepared and transmitted to the
permit holder according to section 90.181. Any balance due to the state shall be shown on
the statement and shall be paid as provided in section 90.181. Any amount of the deposit
in excess of the amount determined to be due according to section 90.181 shall be returned
to the permit holder when a final statement is transmitted under section 90.181. All or
part of a cash deposit may be withheld from application to an amount due on a nonfinal
statement if it appears that the total amount due on the permit will exceed the bid price.
new text end

new text begin (e) If an irrevocable bank letter of credit is provided as security under paragraph
(a), at the written request of the permittee, the commissioner shall annually allow the
amount of the bank letter of credit to be reduced by an amount proportionate to the value
of timber that has been harvested and for which the state has received payment under the
timber permit. The remaining amount of the bank letter of credit after a reduction under
this paragraph must not be less than the value of the timber remaining to be harvested
under the timber permit.
new text end

new text begin (f) If cash; a certified check; a cashier's check; a personal check; or a postal, bank, or
express money order is provided as security under paragraph (a) and no cutting of state
timber has taken place on the permit, the commissioner may credit the security provided,
less any deposit required under section 90.14, to any other permit to which the permit
holder requests in writing that it be credited.
new text end

Subd. 2.

Failure to deleted text begin bond deleted text end new text begin provide security deposit new text end .

If deleted text begin bond deleted text end new text begin the security deposit new text end is
not furnished, no harvesting may occur and deleted text begin the down payment for timber deleted text end new text begin 15 percent of the
permit's purchase price new text end shall forfeit to the state new text begin when the permit expires new text end .

Subd. 3.

Subrogation.

deleted text begin In case of default deleted text end new text begin When security is provided by surety
bond and the permit holder defaults new text end in payment deleted text begin by the permit holder deleted text end new text begin , new text end the surety upon the
bond shall make payment in full to the state of all sums of money due under such permit;
and thereupon such surety shall be deemed immediately subrogated to all the rights of
the state in the timber so paid for; and such subrogated party may pursue the timber and
recover therefor, or have any other appropriate relief in relation thereto which the state
might or could have had if such surety had not made such payment. No assignment or
other writing on the part of the state shall be necessary to make such subrogation effective,
but the certificate signed by and bearing the official seal of the commissioner, showing the
amount of such timber, the lands from which it was cut or upon which it stood, and the
amount paid therefor, shall be prima facie evidence of such facts.

Subd. 4.

Change of security.

Prior to any deleted text begin harvest deleted text end new text begin cutting new text end activity, or activities
incidental to the preparation for harvest, a purchaser having posted a deleted text begin bond deleted text end new text begin security deposit
new text end for 100 percent of the purchase price of a sale may request the release of the deleted text begin bond deleted text end new text begin security
new text end and the commissioner shall grant the release deleted text begin upon cash payment to the commissioner of
15 percent of the appraised value of the sale, plus eight percent interest on the appraised
value of the sale from the date of purchase to the date of release deleted text end new text begin while retaining, or upon
repayment of, the permit's down payment and bid guarantee deposit requirement new text end .

new text begin Subd. 5. new text end

new text begin Return of security. new text end

new text begin Any security required under this section shall be
returned to the purchaser within 60 days after the final scale.
new text end

Sec. 29.

Minnesota Statutes 2012, section 90.162, is amended to read:

90.162 deleted text begin ALTERNATIVE TO BOND OR DEPOSIT REQUIREMENTS
deleted text end new text begin SECURING TIMBER PERMITS WITH CUTTING BLOCKS new text end .

In lieu of the deleted text begin bond or cash deleted text end new text begin security new text end deposit equal to the value of all timber covered
by the permit required by section 90.161 deleted text begin or 90.173 deleted text end , a purchaser of state timber may elect
in writing on a form prescribed by the attorney general to give good and valid surety to the
state of Minnesota equal to the purchase price for any designated cutting block identified
on the permit before the date the purchaser enters upon the land to begin harvesting the
timber on the designated cutting block.

Sec. 30.

new text begin [90.164] TIMBER PERMIT DEVELOPMENT OPTION.
new text end

new text begin With the completion of the presale conference requirement under section 90.151,
subdivision 6, a permit holder may access the permit area in advance of the permit being
fully secured as required by section 90.161, for the express purpose of clearing approved
landings and logging roads. No cutting of state timber except that incidental to the clearing
of approved landings and logging roads is allowed under this section.
new text end

Sec. 31.

Minnesota Statutes 2012, section 90.171, is amended to read:

90.171 ASSIGNMENT OF AUCTION TIMBER PERMITS.

Any permit sold at public auction may be assigned upon written approval of the
commissioner. The assignment of any permit shall be signed and acknowledged by the
permit holder. The commissioner shall not approve any assignment until the assignee has
new text begin been determined to meet the qualifications of a responsible bidder and has new text end given to the state
a deleted text begin bond deleted text end new text begin security deposit new text end which shall be substantially in the form of, and shall be deemed
of the same effect as, the deleted text begin bond deleted text end new text begin security deposit new text end required of the original purchaser. The
commissioner may accept deleted text begin the deleted text end new text begin an new text end agreement of the assignee and any corporate surety upon
deleted text begin such deleted text end new text begin an new text end original bond, substituting the assignee in the place of deleted text begin such deleted text end new text begin the new text end original purchaser
and continuing deleted text begin such deleted text end new text begin the new text end original bond in full force and effect, as to the assignee. Thereupon
but not otherwise the permit holder making the assignment shall be released from all
liability arising or accruing from actions taken after the assignment became effective.

Sec. 32.

Minnesota Statutes 2012, section 90.181, subdivision 2, is amended to read:

Subd. 2.

Deferred payments.

(a) If the amount of the statement is not paid within
30 days of the date thereof, it shall bear interest at the rate determined pursuant to section
16A.124, except that the purchaser shall not be required to pay interest that totals $1 or
less. If the amount is not paid within 60 days, the commissioner shall place the account in
the hands of the commissioner of revenue according to chapter 16D, who shall proceed to
collect the same. When deemed in the best interests of the state, the commissioner shall
take possession of the timber for which an amount is due wherever it may be found and
sell the same informally or at public auction after giving reasonable notice.

(b) The proceeds of the sale shall be applied, first, to the payment of the expenses
of seizure and sale; and, second, to the payment of the amount due for the timber, with
interest; and the surplus, if any, shall belong to the state; and, in case a sufficient amount is
not realized to pay these amounts in full, the balance shall be collected by the attorney
general. Neither payment of the amount, nor the recovery of judgment therefor, nor
satisfaction of the judgment, nor the seizure and sale of timber, shall release the sureties
on any deleted text begin bond deleted text end new text begin security deposit new text end given pursuant to this chapter, or preclude the state from
afterwards claiming that the timber was cut or removed contrary to law and recovering
damages for the trespass thereby committed, or from prosecuting the offender criminally.

Sec. 33.

Minnesota Statutes 2012, section 90.191, subdivision 1, is amended to read:

Subdivision 1.

Sale requirements.

The commissioner may sell the timber on any
tract of state land in lots not exceeding 500 cords in volume, without formalities but for
not less than the full appraised value thereof, to any person. No sale shall be made under
this section to any person holding deleted text begin two deleted text end new text begin more than four new text end permits issued hereunder which are
still in effect deleted text begin ; deleted text end new text begin . new text end deleted text begin except that (1) a partnership as defined in chapter 323, which may include
spouses but which shall provide evidence that a partnership exists, may be holding two
permits for each of not more than three partners who are actively engaged in the business
of logging or who are the spouses of persons who are actively engaged in the business of
logging with that partnership; and (2) a corporation, a majority of whose shares and voting
power are owned by natural persons related to each other within the fourth degree of
kindred according to the rules of the civil law or their spouses or estates, may be holding
two permits for each of not more than three shareholders who are actively engaged in the
business of logging or who are the spouses of persons who are actively engaged in the
business of logging with that corporation.
deleted text end

Sec. 34.

Minnesota Statutes 2012, section 90.193, is amended to read:

90.193 EXTENSION OF TIMBER PERMITS.

The commissioner may, in the case of an exceptional circumstance beyond the
control of the timber permit holder which makes it unreasonable, impractical, and not
feasible to complete cutting and removal under the permit within the time allowed, grant
deleted text begin an deleted text end new text begin one regular new text end extension deleted text begin of deleted text end new text begin for new text end one year. A new text begin written new text end request for the new text begin regular new text end extension must
be received by the commissioner before the permit expires. The request must state the
reason the extension is necessary and be signed by the permit holder. An interest rate of
eight percent may be charged for the period of extension.

Sec. 35.

Minnesota Statutes 2012, section 90.195, is amended to read:

90.195 SPECIAL USE new text begin AND PRODUCT new text end PERMIT.

new text begin (a) new text end The commissioner may issue a permit to salvage or cut not to exceed 12 cords of
fuelwood per year for personal use from either or both of the following sources: (1) dead,
down, and deleted text begin diseased deleted text end new text begin damaged new text end trees; (2) other trees that are of negative value under good
forest management practices. The permits may be issued for a period not to exceed one
year. The commissioner shall charge a fee for the permit deleted text begin that shall cover the commissioner's
cost of issuing the permit and deleted text end new text begin as provided under section 90.041, subdivision 10. The fee
new text end shall not exceed the current market value of fuelwood of similar species, grade, and volume
that is being sold in the area where the salvage or cutting is authorized under the permit.

new text begin (b) The commissioner may issue a special product permit under section 89.42 for
commercial use, which may include incidental volumes of boughs, gravel, hay, biomass,
and other products derived from forest management activities. The value of the products
is the current market value of the products that are being sold in the area. The permit may
be issued for a period not to exceed one year and the commissioner shall charge a fee for
the permit as provided under section 90.041, subdivision 10.
new text end

new text begin (c) The commissioner may issue a special use permit for incidental volumes of
timber from approved right-of-way road clearing across state land for the purpose of
accessing a state timber permit. The permit shall include the volume and value of timber
to be cleared and may be issued for a period not to exceed one year. A presale conference
as required under section 90.151, subdivision 6, must be completed before the start of
any activities under the permit.
new text end

Sec. 36.

Minnesota Statutes 2012, section 90.201, subdivision 2a, is amended to read:

Subd. 2a.

Prompt payment of refunds.

Any refund of cash that is due to a permit
holder as determined on a final statement transmitted pursuant to section 90.181 or a
refund of cash made pursuant to section 90.161, subdivision 1, deleted text begin or 90.173, paragraph
(a), deleted text end shall be paid to the permit holder according to section 16A.124 unless the refund is
credited on another permit as provided in this chapter.

Sec. 37.

Minnesota Statutes 2012, section 90.211, is amended to read:

90.211 PURCHASE MONEY, WHEN FORFEITED.

If the holder of an effective permit new text begin begins to cut and then new text end fails to deleted text begin cut deleted text end new text begin complete new text end any
part deleted text begin thereof deleted text end new text begin of the permit new text end before the expiration of the permit, the permit holder shall
nevertheless pay the price therefor; but under no circumstances shall timber be cut after
the expiration of the permit or extension thereof.

Sec. 38.

Minnesota Statutes 2012, section 90.221, is amended to read:

90.221 TIMBER SALES RECORDS.

The commissioner shall keep timber sales records, including the description of each
tract of land from which any timber is sold; the date of the report of the state appraisers;
the kind, amount, and value of the timber as shown by such report; the date of the sale;
the price for which the timber was sold; the name of the purchaser; the number, date
of issuance and date of expiration of each permit; the date of any assignment of the
permit; the name of the assignee; the dates of the filing and the amounts of the respective
deleted text begin bonds deleted text end new text begin security deposits new text end by the purchaser and assignee; the names of the sureties thereon;
the amount of timber taken from the land; the date of the report of the scaler and state
appraiser; the names of the scaler and the state appraiser who scaled the timber; and the
amount paid for such timber and the date of payment.

Sec. 39.

Minnesota Statutes 2012, section 90.252, subdivision 1, is amended to read:

Subdivision 1.

Consumer scaling.

The commissioner may enter into an agreement
with either a timber sale permittee, or the purchaser of the cut products, or both, so
that the scaling of the cut timber and the collection of the payment for the same can be
consummated by the deleted text begin consumer deleted text end new text begin state new text end . Such an agreement shall be approved as to form and
content by the attorney general and shall provide for a bond or cash in lieu of a bond and
such other safeguards as are necessary to protect the interests of the state. The scaling
and payment collection procedure may be used for any state timber sale, except that no
permittee who is also the consumer shall both cut and scale the timber sold unless such
scaling is supervised by a state scaler.

Sec. 40.

Minnesota Statutes 2012, section 90.301, subdivision 2, is amended to read:

Subd. 2.

Seizure of unlawfully cut timber.

The commissioner may take possession
of any timber hereafter unlawfully cut upon or taken from any land owned by the state
wherever found and may sell the same informally or at public auction after giving such
notice as the commissioner deems reasonable and after deducting all the expenses of such
sale the proceeds thereof shall be paid into the state treasury to the credit of the proper
fund; and when any timber so unlawfully cut has been intermingled with any other timber
or property so that it cannot be identified or plainly separated therefrom the commissioner
may so seize and sell the whole quantity so intermingled and, in such case, the whole
quantity of such timber shall be conclusively presumed to have been unlawfully taken
from state land. When the timber unlawfully cut or removed from state land is so seized
and sold new text begin , new text end the seizure shall not in any manner relieve the trespasser who cut or removed, or
caused the cutting or removal of, any such timber from the full liability imposed by this
chapter for the trespass so committed, but the net amount realized from such sale shall
be credited on whatever judgment is recovered against such trespasser new text begin , if the trespass
was deemed to be casual and involuntary new text end .

Sec. 41.

Minnesota Statutes 2012, section 90.301, subdivision 4, is amended to read:

Subd. 4.

Apprehension of trespassers; reward.

The commissioner may offer a
reward to be paid to a person giving to the proper authorities any information that leads to
the conviction of a person violating this chapter. The reward is limited to the greater of
$100 or ten percent of the single stumpage value of any timber unlawfully cut or removed.
The commissioner shall pay the reward from funds appropriated for that purpose or from
receipts from the sale of state timber. A reward shall not be paid to salaried forest officers,
new text begin state appraisers, scalers, new text end conservation officers, or licensed peace officers.

Sec. 42.

Minnesota Statutes 2012, section 90.41, subdivision 1, is amended to read:

Subdivision 1.

Violations new text begin and penalty new text end .

new text begin (a) new text end Any state scaler or state appraiser who
shall accept any compensation or gratuity for services as such from any other source
except the state of Minnesota, or any state scaler, or other person authorized to scale state
timber, or state appraiser, who shall make any false report, or insert in any such report any
false statement, or shall make any such report without having examined the land embraced
therein or without having actually been upon the land, or omit from any such report any
statement required by law to be made therein, or who shall fail to report any known trespass
committed upon state lands, or who shall conspire with any other person in any manner, by
act or omission or otherwise, to defraud or unlawfully deprive the state of Minnesota of any
land or timber, or the value thereof, shall be guilty of a felony. Any material discrepancy
between the facts and the scale returned by any such person scaling timber for the state
shall be considered prima facie evidence that such person is guilty of violating this statute.

new text begin (b) new text end No such appraiser or scaler who has been once discharged for cause shall ever
again be appointed. This provision shall not apply to resignations voluntarily made by and
accepted from such employees.

Sec. 43. new text begin PERMIT CANCELLATION.
new text end

new text begin Upon written request submitted by a permit holder to the commissioner of natural
resources on or before June 1, 2015, the commissioner shall cancel any provision in a
timber sale permit sold prior to September 1, 2012, that requires skidding, payment for,
or removal of balsam fir when the permit contains at least 50 cords of balsam fir. The
remaining provisions of the permit remain in effect.
new text end

Sec. 44. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2012, sections 90.163; 90.173; and 90.41, subdivision 2, new text end new text begin are
repealed.
new text end