SF 1019

as introduced - 89th Legislature (2015 - 2016) Posted on 02/24/2015 09:23am

A bill for an act
relating to natural resources; modifying timber sale downpayment requirements;
amending Minnesota Statutes 2014, sections 90.14; 282.04, subdivision 1.

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

Section 1.

Minnesota Statutes 2014, section 90.14, is amended to read:

90.14 AUCTION SALE PROCEDURE.

(a) All state timber shall be offered and sold by the same unit of measurement as it
was appraised. No tract shall be sold to any person other than the purchaser in whose name
the bid was made. The commissioner may refuse to approve any and all bids received and
cancel a sale of state timber for good and sufficient reasons.

(b) The purchaser at any sale of timber shall, immediately upon the approval of the
bid, or, if unsold at public auction, at the time of purchase at a subsequent sale under
section 90.101, subdivision 1, pay to the commissioner a down payment of new text begin no more than
new text end 15 percent of the appraised value. In case any purchaser fails to make such payment, the
purchaser shall be liable therefor to the state in a civil action, and the commissioner may
reoffer the timber for sale as though no bid or sale under section 90.101, subdivision 1,
therefor had been made.

(c) In lieu of the scaling of state timber required by this chapter, a purchaser of state
timber may, at the time of payment by the purchaser to the commissioner of 15 percent
of the appraised value, elect in writing on a form prescribed by the attorney general to
purchase a permit based solely on the appraiser's estimate of the volume of timber described
in the permit, provided that the commissioner has expressly designated the availability of
such option for that tract on the list of tracts available for sale as required under section
90.101. A purchaser who elects in writing on a form prescribed by the attorney general
to purchase a permit based solely on the appraiser's estimate of the volume of timber
described on the permit does not have recourse to the provisions of section 90.281.

(d) In the case of a public auction sale conducted by a sealed bid process, tracts shall
be awarded to the high bidder, who shall pay to the commissioner a down payment of 15
percent of the appraised value that must be received or postmarked within 14 days of
the date of the sealed bid opening. If a purchaser fails to make the down payment, the
purchaser is liable for the down payment to the state and the commissioner may offer the
timber for sale to the next highest bidder as though no higher bid had been made.

(e) Except as otherwise provided by law, at the time the purchaser signs a permit
issued under section 90.151, the commissioner shall require the purchaser to make a
bid guarantee payment to the commissioner in an amount equal to 15 percent of the
total purchase price of the permit less the down payment amount required by paragraph
(b) for any bid increase in excess of $5,000 of the appraised value. If a required bid
guarantee payment is not submitted with the signed permit, no harvesting may occur, the
permit cancels, and the down payment for timber forfeits to the state. The bid guarantee
payment forfeits to the state if the purchaser and successors in interest fail to execute
an effective permit.

Sec. 2.

Minnesota Statutes 2014, section 282.04, subdivision 1, is amended to read:

Subdivision 1.

Timber sales; land leases and uses.

(a) The county auditor, with
terms and conditions set by the county board, may sell timber upon any tract that may be
approved by the natural resources commissioner. The sale of timber shall be made for
cash at not less than the appraised value determined by the county board to the highest
bidder after not less than one week's published notice in an official paper within the
county. Any timber offered at the public sale and not sold may thereafter be sold at private
sale by the county auditor at not less than the appraised value thereof, until the time as
the county board may withdraw the timber from sale. The appraised value of the timber
and the forestry practices to be followed in the cutting of said timber shall be approved
by the commissioner of natural resources.

(b) Payment of the full sale price of all timber sold on tax-forfeited lands shall
be made in cash at the time of the timber sale, except in the case of oral or sealed bid
auction sales, the down payment shall be no deleted text begin less deleted text end new text begin more new text end than 15 percent of the appraised
value, and the balance shall be paid prior to entry. In the case of auction sales that are
partitioned and sold as a single sale with predetermined cutting blocks, the down payment
shall be no deleted text begin less deleted text end new text begin more new text end than 15 percent of the appraised price of the entire timber sale
which may be held until the satisfactory completion of the sale or applied in whole or in
part to the final cutting block. The value of each separate block must be paid in full
before any cutting may begin in that block. With the permission of the county contract
administrator the purchaser may enter unpaid blocks and cut necessary timber incidental
to developing logging roads as may be needed to log other blocks provided that no timber
may be removed from an unpaid block until separately scaled and paid for. If payment is
provided as specified in this paragraph as security under paragraph (a) and no cutting has
taken place on the contract, the county auditor may credit the security provided, less any
down payment required for an auction sale under this paragraph, to any other contract
issued to the contract holder by the county under this chapter to which the contract holder
requests in writing that it be credited, provided the request and transfer is made within the
same calendar year as the security was received.

(c) The county board may sell any timber, including biomass, as appraised or scaled.
Any parcels of land from which timber is to be sold by scale of cut products shall be so
designated in the published notice of sale under paragraph (a), in which case the notice
shall contain a description of the parcels, a statement of the estimated quantity of each
species of timber, and the appraised price of each species of timber for 1,000 feet, per cord
or per piece, as the case may be. In those cases any bids offered over and above the
appraised prices shall be by percentage, the percent bid to be added to the appraised price
of each of the different species of timber advertised on the land. The purchaser of timber
from the parcels shall pay in cash at the time of sale at the rate bid for all of the timber
shown in the notice of sale as estimated to be standing on the land, and in addition shall
pay at the same rate for any additional amounts which the final scale shows to have been
cut or was available for cutting on the land at the time of sale under the terms of the sale.
Where the final scale of cut products shows that less timber was cut or was available
for cutting under terms of the sale than was originally paid for, the excess payment
shall be refunded from the forfeited tax sale fund upon the claim of the purchaser, to be
audited and allowed by the county board as in case of other claims against the county. No
timber, except hardwood pulpwood, may be removed from the parcels of land or other
designated landings until scaled by a person or persons designated by the county board
and approved by the commissioner of natural resources. Landings other than the parcel
of land from which timber is cut may be designated for scaling by the county board by
written agreement with the purchaser of the timber. The county board may, by written
agreement with the purchaser and with a consumer designated by the purchaser when the
timber is sold by the county auditor, and with the approval of the commissioner of natural
resources, accept the consumer's scale of cut products delivered at the consumer's landing.
No timber shall be removed until fully paid for in cash. Small amounts of timber not
exceeding $3,000 in appraised valuation may be sold for not less than the full appraised
value at private sale to individual persons without first publishing notice of sale or calling
for bids, provided that in case of a sale involving a total appraised value of more than $200
the sale shall be made subject to final settlement on the basis of a scale of cut products in
the manner above provided and not more than two of the sales, directly or indirectly to any
individual shall be in effect at one time.

(d) As directed by the county board, the county auditor may lease tax-forfeited land
to individuals, corporations or organized subdivisions of the state at public or private sale,
and at the prices and under the terms as the county board may prescribe, for use as cottage
and camp sites and for agricultural purposes and for the purpose of taking and removing of
hay, stumpage, sand, gravel, clay, rock, marl, and black dirt from the land, and for garden
sites and other temporary uses provided that no leases shall be for a period to exceed ten
years; provided, further that any leases involving a consideration of more than $12,000 per
year, except to an organized subdivision of the state shall first be offered at public sale in
the manner provided herein for sale of timber. Upon the sale of any leased land, it shall
remain subject to the lease for not to exceed one year from the beginning of the term of the
lease. Any rent paid by the lessee for the portion of the term cut off by the cancellation
shall be refunded from the forfeited tax sale fund upon the claim of the lessee, to be
audited and allowed by the county board as in case of other claims against the county.

(e) As directed by the county board, the county auditor may lease tax-forfeited land
to individuals, corporations, or organized subdivisions of the state at public or private sale,
at the prices and under the terms as the county board may prescribe, for the purpose
of taking and removing for use for road construction and other purposes tax-forfeited
stockpiled iron-bearing material. The county auditor must determine that the material is
needed and suitable for use in the construction or maintenance of a road, tailings basin,
settling basin, dike, dam, bank fill, or other works on public or private property, and
that the use would be in the best interests of the public. No lease shall exceed ten years.
The use of a stockpile for these purposes must first be approved by the commissioner of
natural resources. The request shall be deemed approved unless the requesting county
is notified to the contrary by the commissioner of natural resources within six months
after receipt of a request for approval for use of a stockpile. Once use of a stockpile has
been approved, the county may continue to lease it for these purposes until approval is
withdrawn by the commissioner of natural resources.

(f) The county auditor, with the approval of the county board is authorized to grant
permits, licenses, and leases to tax-forfeited lands for the depositing of stripping, lean ores,
tailings, or waste products from mines or ore milling plants, or to use for facilities needed
to recover iron-bearing oxides from tailings basins or stockpiles, or for a buffer area
needed for a mining operation, upon the conditions and for the consideration and for the
period of time, not exceeding 25 years, as the county board may determine. The permits,
licenses, or leases are subject to approval by the commissioner of natural resources.

(g) Any person who removes any timber from tax-forfeited land before said timber
has been scaled and fully paid for as provided in this subdivision is guilty of a misdemeanor.

(h) The county auditor may, with the approval of the county board, and without first
offering at public sale, grant leases, for a term not exceeding 25 years, for the removal of
peat and for the production or removal of farm-grown closed-loop biomass as defined in
section 216B.2424, subdivision 1, or short-rotation woody crops from tax-forfeited lands
upon the terms and conditions as the county board may prescribe. Any lease for the removal
of peat, farm-grown closed-loop biomass, or short-rotation woody crops from tax-forfeited
lands must first be reviewed and approved by the commissioner of natural resources if the
lease covers 320 or more acres. No lease for the removal of peat, farm-grown closed-loop
biomass, or short-rotation woody crops shall be made by the county auditor pursuant to this
section without first holding a public hearing on the auditor's intention to lease. One printed
notice in a legal newspaper in the county at least ten days before the hearing, and posted
notice in the courthouse at least 20 days before the hearing shall be given of the hearing.

(i) Notwithstanding any provision of paragraph (c) to the contrary, the St. Louis
County auditor may, at the discretion of the county board, sell timber to the party who
bids the highest price for all the several kinds of timber, as provided for sales by the
commissioner of natural resources under section 90.14. Bids offered over and above the
appraised price need not be applied proportionately to the appraised price of each of
the different species of timber.

(j) In lieu of any payment or deposit required in paragraph (b), as directed by the
county board and under terms set by the county board, the county auditor may accept an
irrevocable bank letter of credit in the amount equal to the amount otherwise determined in
paragraph (b). If an irrevocable bank letter of credit is provided under this paragraph, at the
written request of the purchaser, the county may periodically allow 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 county has received payment. The remaining amount of the bank letter
of credit after a reduction under this paragraph must not be less than 20 percent of the value
of the timber purchased. If an irrevocable bank letter of credit or cash deposit is provided
for the down payment required in paragraph (b), and no cutting of timber has taken place
on the contract for which a letter of credit has been provided, the county may allow the
transfer of the letter of credit to any other contract issued to the contract holder by the
county under this chapter to which the contract holder requests in writing that it be credited.