 |
 |
|
|
| Volume 1 - Resource Management Chapter 19 - Timber Sales Policy 19.1 - Timber Sale Licence Deposit AdministrationEffective Date: 30-July-04 Resource Management Volume Table of Contents | Amendment Log ScopeThis policy applies to all specified categories of timber sales licences (TSLs) issued under the Forest Act unless specifically exempted by the Minister of Forests (the Minister). PolicyIt is the policy of the Ministry of Forests (the Ministry) that security deposits associated with specified categories of TSLs be established and administered in accordance with the following policies and procedures. DefinitionsSpecified categories of TSLsSpecified categories of TSLs means TSLs competitively awarded pursuant to Sections 20 or 21 (as sec. 21 was prior to its repeal) of the Forest Act in which eligibility was restricted to one or more categories of BC timber sales enterprises. Initial depositAn initial deposit, also referred to as a bid deposit, is cash, certified cheque or other form of acceptable security that must be paid in accordance with Section 6(1)(b) of the Advertising, Deposits, Disposition and Extensions Regulation (ADDR). Additional depositAn additional deposit is cash, certified cheque or other form of acceptable security that must be paid by a successful applicant for a specified category of TSL in accordance with Section 6(3) of the ADDR. Final depositA final deposit, also referred to as a licence deposit or security deposit, is cash, certified cheque or other form of acceptable security equal to the sum of the initial deposit plus the additional deposit. Upset stumpage rateThe upset stumpage rate is the initial stumpage rate determined in accordance with the Coast and Interior Appraisal manuals as amended from time to time. Total stumpage rateThe total stumpage rate, also known as the final stumpage rate or stumpage rate is the sum of the upset stumpage rate plus any bonus bid. Pre-issuance Deposit ManagementApplicationsEach application for a specified category of TSL must be accompanied by an initial deposit established in accordance with the Forest Act, the ADDR, the Particulars for the Invitation for Applications (Particulars), and this policy. Calculation of initial depositSubject to theParticulars, the exceptions described below, and for the purposes of Section 6(1)(b) of the ADDR, timber sales managers will establish the initial deposit in a manner consistent with the default amount calculated in accordance with Section 7(1)(c)(i) of the ADDR. Exceptions (a) In cases where the total estimated upset stumpage is anticipated to be less than $3,000, and pursuant to Section 6(2) of the ADDR, the initial deposit will be $500 or $0. (b) In cases where an assessment indicates a significant risk that the successful applicant for a TSL may fail to enter into the agreement (e.g., large volume TSL at minimum stumpage rates), pursuant to Sections 6(1)(b) and 7(1)(c)(i) of the ADDR, the initial deposit will be an amount that is not less than::
Return of bid depositsPursuant to Section 8 of the ADDR and the Particulars, if an application for a specified category of TSL is not approved, timber sales managers will refund the initial deposit paid in respect of the application if satisfied that there is no longer a need for the initial deposit. Prior to doing so, timber sales managers will confirm that:
Calculation of final depositFor the purpose of Section 6(3) of the ADDR and as described within theParticulars, the final deposit will be consistent with the default amount calculated in accordance with Section 7(1)(c)(ii) of the ADDR. Exceptions (a) In cases where an assessment indicates a significant risk to the Crown resulting from a potential incidence of non-conformance with a contractual requirement or non-compliance with a statutory requirement that is associated with the TSL, pursuant to Sections 6(3) and 7(1)(c)(ii) of the ADDR, the final deposit will be an amount:
(b) Where the final deposit is anticipated to be an amount that is less than the initial deposit (e.g., a 60 000 m3 helicopter TSL with an upset rate of $0.25/m3 and a bonus bid of $0, would yield a $3,000 bid deposit and a $1,500 final deposit), the final deposit shall equal the initial deposit. Submission of additional depositThe applicant whose application for a specified category of TSL is approved must pay on the demand of a timber sales manager, and before entering into the TSL, either:
In the event that the applicant fails to pay the required additional deposit or final deposit within: (a) 14 days following the date of demand, or (b) a shorter period of demand as established in accordance with BC Timber Sales policy and as described within the Particulars, the timber sales manager shall, for the purposes of Section 9(1) of the ADDR and Section 78(4)(a) of the Forest Act, consider the applicant having refused to enter into the agreement. Acceptable forms of depositsDeposits must be in one or more of the following forms:
"This Letter of Credit shall be deemed to be automatically extended on an annual basis without any formal amendment unless, thirty days prior to the present expiry or any future expiry date as automatically extended, we shall notify {name and address of licensee} and {timber sales manager and address of BC Timber Sales Office} in writing that we elect not to extend the Letter of Credit for any further period, and at the same time forward to the Timber Sales Manager, together with such written notice of election, a bank draft payable to the Minister of Finance in the amount of {$_______} less any amount previously paid under this Letter of Credit.". Post-issuance Deposit ManagementExtension, Surrender, Expiry, CancellationDeposits associated with specified categories of TSLs that have been successfully entered into shall be administered in accordance with the general procedures described within Schedules A and B. ResponsibilitiesDirector, BC Timber Sales Business Operations The Director, BC Timber Sales Business Operations is responsible for:
Director, BC Timber Sales Operations The Director, BC Timber Sales Operations is responsible for:
Timber Sales Manager The Timber Sale Manager is responsible for:
Effective DateThis policy is in effect July 30, 2004. ReferencesForest Act, ss. 20, 21 as it was prior to its repeal, 22, 58.3 and 78 BC Timber Sales Regulation (BC Reg. 265/88) Advertising, Deposits, Disposition and Extensions Regulation (BC Reg. 552/78) Schedule A - General post-issuance deposit management procedures for TSLs advertised prior to July 5, 2002
Schedule B - General post-issuance deposit management procedures for TSLs advertised on or after July 5, 2002
Schedule C - Pre-July 5, 2002 TSL Deposit Management Policy1"...authority to take from the deposit comes from the timber sale licence agreement, the deposit disposition must be part of a separate determination. On termination of timber sale licences, decision-makers should consider whether there are non-compliances and/or outstanding obligations. If these non-compliances or outstanding obligations exist the decision-maker should consider the relative value and importance of the non-compliances and outstanding obligations, and the impacts on the government if these are allowed to go uncorrected or unassessed for damages. If the decision-maker believes that government has suffered legitimate damages or costs, there are provisions in the licence documents regarding taking money from the licence deposit to cover damages suffered by the licensor (government). The process to follow in using the licence document deposit provisions is as follows:
|
|
 |
