CHAPTER 1. REGULATION OF TIMBER BUYERS BY DEPARTMENT OF NATURAL RESOURCES
IC 25-36.5
ARTICLE 36.5. TIMBER BUYERS
IC 25-36.5-1
Chapter 1. Regulation of Timber Buyers by Department ofNatural Resources
IC 25-36.5-1-1
Definitions
Sec. 1. As used in this chapter:
"Person" means an individual, partnership, firm, association,business trust, limited liability company, or corporation.
"Timber" means trees, standing or felled, and logs which can beused for sawing or processing into lumber for building or structuralpurposes or for the manufacture of any article. "Timber" does notinclude firewood, Christmas trees, fruit or ornamental trees, or woodproducts not used or to be used for building, structural,manufacturing, or processing purposes.
"Timber buyer" means a person engaged in the business of buyingtimber from timber growers for sawing into lumber, processing, orresale, but does not include a person who occasionally purchasestimber for sawing or processing for his own use and not for resale.
"Timber grower" means the owner, tenant, or operator of land inthis state who has an interest in, or is entitled to receive any part ofthe proceeds from, the sale of timber grown in this state and includespersons exercising lawful authority to sell timber for a timbergrower.
"Department" means the department of natural resources.
"Director" means the director of the department of naturalresources.
"Agent" means an individual who represents a timber buyer ineffecting or attempting to effect purchases of timber.
"Buying" means acquiring an interest in property by the paymentof a price, value, or other consideration.
(Formerly: Acts 1972, P.L.190, SEC.1; Acts 1975, P.L.274, SEC.1.)As amended by P.L.253-1983, SEC.1; P.L.158-1988, SEC.1;P.L.8-1993, SEC.397.
IC 25-36.5-1-2
Application for registration; contents; filing; prior registration
Sec. 2. (a) On and after July 28, 1972, no person shall engage inthe business of timber buying in the state of Indiana without aregistration certificate issued by the department. Application forIndiana registration to engage in the business of timber buying shallbe filed with the department. Such application shall set forth thename of the applicant, its principal officers if the applicant is acorporation, its managers and members if the applicant is a limitedliability company, or the partners if the applicant is a partnership, thelocation of any principal office or place of business of the applicant,the counties in this state from which the applicant proposes to engage
in the business of timber buying and such additional information asthe department by regulation may require.
(b) The application shall set forth the aggregate dollar amountpaid to timber growers for timber purchased in this state during theapplicant's last completed fiscal or calendar year. In the event theapplicant has been engaged as a timber buyer for less than one (1)year, his application shall set forth the dollar amount paid to timbergrowers for the number of completed months during which theapplicant has been so engaged. If the applicant has not beenpreviously engaged in buying timber in this state, the applicationshall set forth the estimated aggregate dollar amount to be paid bythe applicant to timber growers for timber to be purchased from themduring the next succeeding year.
(c) The registrations of any persons registered as timber buyersunder any prior law in this state shall remain valid until theexpiration date of that certificate, unless suspended or revoked. Afterthe expiration of such registrations, all persons engaged in thebusiness of timber buying must be registered under this chapter.
(Formerly: Acts 1972, P.L.190, SEC.1.) As amended by Acts 1982,P.L.154, SEC.128; P.L.8-1993, SEC.398.
IC 25-36.5-1-3
Bond or certificate of deposit; requisites; cancellation; forfeitureproceedings; preliminary injunction or restraining order
Sec. 3. (a) Every person registered as a timber buyer shall filewith the department an effective surety bond issued by a corporatesurety authorized to engage in the business of executing surety bondsin Indiana.
(b) Instead of the bond required by subsection (a), the departmentmay accept security in cash or a certificate of deposit under termsestablished by rule.
(c) The security required under subsection (a) or (b) shall be madepayable upon demand to the director, subject to this chapter, for theuse and benefit of the people of Indiana and for the use and benefitof any timber grower from whom the applicant purchased and whois not paid by the applicant or for the use and benefit of any timbergrower whose timber has been cut by the applicant or registrant orhis agents, and who has not been paid therefor.
(d) The security required under subsection (a) or (b) shall be inthe principal amount of two thousand dollars ($2,000) for anapplicant who paid timber growers five thousand dollars ($5,000) orless for timber during the immediate preceding year, and anadditional one hundred dollars ($100) for each additional onethousand dollars ($1,000) or fraction thereof paid to timber growersfor timber purchased during the preceding year, but shall not be morethan twenty thousand dollars ($20,000). In the case of an applicantnot previously engaged in business as a timber buyer, the amount ofsuch bond shall be based on the estimated dollar amount to be paidby such timber buyer to timber growers for timber purchased duringthe next succeeding year, as set forth in the application. (e) The security required under subsection (a) or (b) shall not becancelled or altered during the period for which the certificate to theapplicant was issued except upon at least sixty (60) days notice inwriting to the department.
(f) Security shall be in such form, contain such terms andconditions as may be approved from time to time by the director, beconditioned to secure an honest cutting and accounting for timberpurchased by the registrant, secure payment to the timber growers,and insure the timber growers against all fraudulent acts of theregistrant in the purchase and cutting of the timber of this state.
(g) If a timber buyer fails to pay when due any amount due atimber grower for timber purchased, or fails to pay legallydetermined damages for timber wrongfully cut by a timber buyer orhis agent, or commits any violation of this chapter, an adjudicativeproceeding on the bond for forfeiture may be commenced, and noticeof the proceeding shall be provided, under IC 4-21.5-3-6. A surety orperson in possession of the security provided under subsection (a) or(b) is entitled to notification of the proceeding. If a final agencyaction is entered by the department under this subsection against thetimber buyer, the surety or other person in possession of the securityshall deliver the amount of the security identified in the order. Aproceeding for forfeiture of a timber buyer's bond under IC 4-21.5 isthe exclusive remedy under law for the forfeiture of the bond.
(h) An owner of property seeking a preliminary injunction orrestraining order against a person, corporation, or other entity toprevent or stop the wrongful cutting of timber on the owner'sproperty is relieved of the requirement to post a bond or othersecurity with the court as a prerequisite to the issuance of thepreliminary injunction or restraining order. However, this subsectiondoes not apply to a property owner who seeks a preliminaryinjunction or restraining order to prevent or stop alleged wrongfulcutting by a timber cutter or timber buyer with whom the propertyowner had contracted for the cutting or sale of timber.
(Formerly: Acts 1972, P.L.190, SEC.1.) As amended byP.L.253-1983, SEC.2; P.L.158-1988, SEC.2; P.L.220-1993, SEC.1;P.L.98-2001, SEC.3.
IC 25-36.5-1-3.1
Notice of violation of chapter or rules
Sec. 3.1. The department may under IC 4-21.5-3-6 issue a noticeof violation against a person who has violated this chapter or therules adopted under this chapter. The notice of violation shall beissued to the registrant and the registrant's sureties stating in generalterms:
(1) the nature of the violation; and
(2) that a proceeding seeking forfeiture of the bond may becommenced twenty (20) days after service of the notice on theregistrant if at the end of that period the violation still remainsand neither the registrant nor the surety has asked for judicialreview of the notice.As added by P.L.220-1993, SEC.2.
IC 25-36.5-1-3.2
Adjudicative proceeding against timber buyer or cutter
Sec. 3.2. (a) This section refers to an adjudicative proceedingagainst:
(1) a timber buyer; or
(2) a person who cuts timber but is not a timber buyer (referredto as a "timber cutter" in this section).
(b) The department may under IC 4-21.5-3-8 commence aproceeding against a timber buyer or a timber cutter if there is reasonto believe that:
(1) the timber buyer or timber cutter has acquired timber froma timber grower under a written contract for the sale of thetimber without payment having been made to the timber groweras specified in the contract; or
(2) if:
(A) there is no written contract for the sale of the timber; or
(B) there is a written contract for the sale of the timber butthe contract does not set forth the purchase price for thetimber;
the timber buyer or timber cutter has cut timber or acquiredtimber from the timber grower without payment having beenmade to the timber grower equal to the value of the timber asdetermined under IC 26-1-2.
(c) A proceeding may be commenced under this section at therequest of a timber grower.
(d) The necessary parties to a proceeding initiated under thissection are:
(1) the timber grower; and
(2) the timber buyer or timber cutter.
(e) After the commencement of a proceeding under this sectionthrough the service of a complaint under IC 4-21.5-3-8, a party to theproceeding may move for the joinder of any of the following personshaving a relationship to the site or subject of the complaint:
(1) The surety of the timber buyer.
(2) A timber buyer.
(3) A timber cutter.
(4) A landowner.
(5) An owner of land adjacent to the land from which the timberwas cut.
(6) A consultant receiving a fee for services related to thetimber.
(7) A land surveyor performing a minimum standard detailsurvey in Indiana under the requirements of the Indiana Societyof Professional Land Surveyors and Indiana Land Association.
(8) The department of natural resources, if the department hasa relationship to the site or subject of the complaint as alandowner or owner of adjacent land.
(f) The complaint served under IC 4-21.5-3-8 to commence a
proceeding under this section may seek the following:
(1) Damages in compensation for damage actually resultingfrom the wrongful activities of a timber buyer or timber cutter.
(2) Damages equal to three (3) times the stumpage value of anytimber that is wrongfully cut or appropriated without payment.
(g) Notwithstanding subsection (f), the liability on the surety bondof a timber cutter is limited to the value of any timber wrongfully cutor appropriated.
(h) A proceeding under this section is governed by IC 4-21.5.Before a hearing is convened in the proceeding, a prehearingconference shall be conducted to provide the parties with anopportunity for settlement, including an opportunity for mediation.
(i) In determining the site for a hearing in a proceeding under thissection, the administrative law judge shall consider the convenienceof the parties.
(j) A final agency action in a proceeding under this section mustaddress all issues of damage and responsibility and, after thecompletion of the opportunity for judicial review, may be enforcedin a civil proceeding as a judgment.
As added by P.L.220-1993, SEC.3.
IC 25-36.5-1-3.3
Bond or security forfeiture proceeds; overage and shortage; effect
Sec. 3.3. (a) If the amount realized by the department from a bondor security forfeited under section 3(g) of this chapter, afterdeducting expenses incurred by the department in converting thebond or security into money, is greater than the amount of theliability of the timber buyer as determined under this chapter, thedepartment shall pay the excess to the timber buyer who furnishedthe bond or security.
(b) If the amount realized by the department from a bond orsecurity forfeited under section 3(g) of this chapter, after deductingexpenses incurred by the department in converting the bond orsecurity into money, is less than the amount of liability of the timberbuyer as determined under this chapter, the timber buyer'sregistration may be revoked.
As added by P.L.220-1993, SEC.4.
IC 25-36.5-1-3.5
Cessation of business; requirements for return of deposit
Sec. 3.5. (a) A timber buyer who intends to cease doing businessas a timber buyer in Indiana and who seeks the return of a deposit ofcash or a certificate of deposit that the timber buyer submitted to thedepartment under section 3(b) of this chapter must submit thefollowing to the department:
(1) A written request for the return of the cash or certificate ofdeposit.
(2) An affidavit meeting the requirements set forth in subsection(b).
(b) To obtain the return of a deposit of cash or a certificate of
deposit under this section, a timber buyer must execute an affidavitstating under the penalty for perjury set forth in IC 35-44-2-1 that thetimber buyer:
(1) has ceased doing business as a timber buyer in Indiana;
(2) will not resume business as a timber buyer in Indiana afterthe date of the affidavit without filing a surety bond orsubmitting a new deposit of cash or certificate of deposit to thedepartment;
(3) has not purchased, taken, or cut any timber for which thetimber grower has not been paid; and
(4) is not a party to an executory contract for the purchase oftimber under which the timber buyer has one (1) or more dutiesthat have not been performed.
(c) Upon receiving a written request described in subsection (a)(1)and an affidavit meeting the requirements of subsection (b), thedepartment shall publish a notice of the request in at least one (1)publication commonly read by persons active in forestry in Indiana.The notice must do the following:
(1) Identify the timber buyer requesting the release of the cashor certificate of deposit.
(2) Indicate the date of the request.
(3) State that the cash or certificate of deposit will be releasedto the timber buyer on a particular date, which must be at leastsixty (60) days after the date of publication of the notice, unlessthe department is informed of a reason why the cash orcertificate of deposit should not be released.
(d) On the date set forth under subsection (c)(3) in the noticegiven by the department, the department shall return the cash orcertificate of deposit to the timber buyer unless the department hasobtained information indicating that a statement set forth in thetimber buyer's affidavit is false.
As added by P.L.220-1993, SEC.5.
IC 25-36.5-1-4
Violations
Sec. 4. It shall be unlawful and a violation of this chapter.
(a) For any timber buyer to fail to pay, as agreed, for any timberpurchased.
(b) For any timber buyer to cut or cause to be cut or appropriateany timber not purchased.
(c) For a timber buyer to willfully make any false statement inconnection with the application, bond or other information requiredto be given to the department or a timber grower.
(d) To fail to honestly account to the timber grower or thedepartment for timber purchased or cut if the buyer is under a dutyto do so, and
(e) For a timber buyer to commit any fraudulent act in connectionwith the purchase or cutting of timber.
(Formerly: Acts 1972, P.L.190, SEC.1.)
IC 25-36.5-1-4.9
Refusal to issue timber buyer registration certificate; grounds
Sec. 4.9. The director may refuse to issue a timber buyerregistration certificate to an applicant that has:
(1) been convicted of a felony;
(2) violated a provision of this chapter; or
(3) violated a rule adopted by the department under this chapter.
As added by P.L.220-1993, SEC.6.
IC 25-36.5-1-5
Repealed
(Repealed by P.L.220-1993, SEC.10.)
IC 25-36.5-1-6
Issuance of registration certificates; renewal
Sec. 6. (a) If:
(1) the department is satisfied that the applicant has fulfilled therequirements of this chapter for the issuance of a registrationcertificate;
(2) the bond and sureties or bank certificate of deposit filed bythe applicant under section 3 of this chapter is approved; and
(3) the director does not refuse to issue the registrationcertificate to the applicant under section 4.9 of this chapter;
the department shall issue a registration certificate to the applicant.
(b) The registrations issued shall be valid for a calendar year andmay be renewed annually. A copy of the registration certificateissued by the department shall be posted in the principal office of theregistrant in this state.
(c) Upon request for a certificate and payment of the fee, thedepartment shall issue to the registrant a certificate that a certificateof registration has been granted and a bond filed as required by thischapter.
(Formerly: Acts 1972, P.L.190, SEC.1.) As amended byP.L.220-1993, SEC.7.
IC 25-36.5-1-7
Fees; use by department
Sec. 7. The application fee or renewal fee for a registrationcertificate to operate as a timber buyer, is one hundred five dollars($105). The fee for a certificate stating that a registration certificatehas been issued and security filed is twenty dollars ($20). All feescollected by the department accrue to the use of the department forits administrative purposes.
(Formerly: Acts 1972, P.L.190, SEC.1.) As amended by Acts 1981,P.L.230, SEC.1; P.L.158-1988, SEC.3; P.L.186-2003, SEC.79.
IC 25-36.5-1-8
Inspection of premises, records, and papers
Sec. 8. The department may inspect the premises used by anytimber buyer in the conduct of his business at any reasonable time
and the books, accounts, records and papers of every such timberbuyer shall at all times during business hours be subject to inspectionby the department.
(Formerly: Acts 1972, P.L.190, SEC.1.)
IC 25-36.5-1-9
Rules and regulations
Sec. 9. The department may make such rules and regulations asmay be necessary to carry out the provisions of this chapter.
(Formerly: Acts 1972, P.L.190, SEC.1.)
IC 25-36.5-1-10
Violations
Sec. 10. A person who:
(1) engages in business as a timber buyer without securing aregistration or in violation of this chapter; or
(2) refuses to permit inspection of the person's premises, books,accounts, or records as provided in this chapter;
commits a Class A misdemeanor. However, the offense is a Class Dfelony if the person has a prior unrelated conviction for an offenseunder this section.
(Formerly: Acts 1972, P.L.190, SEC.1.) As amended by Acts 1978,P.L.2, SEC.2563; P.L.98-2001, SEC.4.
IC 25-36.5-1-11
Denial of registration for default
Sec. 11. No certificate of registration shall be issued to any personwho is in default to the people of the State of Indiana for moneys dueunder this chapter.
(Formerly: Acts 1972, P.L.190, SEC.1.)
IC 25-36.5-1-12
Revocation of license; proceedings
Sec. 12. The department may, after notice and a hearing, revokethe registration certificate or license of any person who violates anyof the provisions of this chapter. All proceedings under this chapterto revoke a license shall be conducted in the manner prescribed byIC 4-21.5-3.
(Formerly: Acts 1972, P.L.190, SEC.1.) As amended byP.L.253-1983, SEC.3; P.L.7-1987, SEC.132.
IC 25-36.5-1-13
Injunction; contempt proceedings
Sec. 13. The department may, by application to any circuit courtor to a judge thereof, obtain an injunction restraining any person whoengages in the business of timber buying in this state without acertificate of registration (either because his certificate has beenrevoked or because of a failure to obtain a certificate of registrationin the first instance) from engaging in such business until suchperson complies with this chapter and qualifies for and obtains a
certificate of registration. Upon refusal or neglect to obey the orderof the court or judge, said court or judge may compel obediencethereof by proceedings for contempt.
(Formerly: Acts 1972, P.L.190, SEC.1.)
IC 25-36.5-1-13.5
Civil penalties
Sec. 13.5. In addition to the other penalties prescribed by thischapter, the director may, under IC 4-21.5, impose a civil penalty ona person who violates this chapter. A civil penalty imposed underthis section may not exceed the following limits:
(1) For engaging in business as a timber buyer without securinga registration certificate under this chapter, ten thousand dollars($10,000).
(2) For acting as the agent of a timber buyer without holding anagent's license under this chapter, ten thousand dollars($10,000).
(3) For other violations of this chapter, one thousand dollars($1,000).
As added by P.L.220-1993, SEC.8.
IC 25-36.5-1-14
Judicial review
Sec. 14. All final administrative decisions under this chapter shallbe subject to judicial review under IC 4-21.5-5.
(Formerly: Acts 1972, P.L.190, SEC.1.) As amended by P.L.7-1987,SEC.133.
IC 25-36.5-1-15
Agents; license; requirements; revocation; termination of agencyrelationship; misdemeanor
Sec. 15. (a) An individual who acts as the agent of a timber buyermust have an agent's license and carry the agent's card that verifiesthe license.
(b) An agent's license may be granted only:
(1) to qualified individuals;
(2) at the written application of the timber buyer who the agentis to represent; and
(3) under that timber buyer's registration certificate.
(c) The application for an agent's license must contain the agent'sfull name, address, and other information as required by thedepartment on forms supplied by the department. Each timber buyeris responsible for all of the agent's activities performed while actingunder the timber buyer's registration certificate as they pertain to thischapter.
(d) An application fee of ten dollars ($10) for each agent shall becharged for the license and agent's card. However, each timber buyershall designate a qualified individual to be licensed as its principalagent at no additional charge.
(e) An agent's license may be revoked by the department under
IC 4-21.5 if the agent does not comply with this section.
(f) An agent may have a license to represent only one (1) timberbuyer; however, upon surrendering the agent's card and license underone (1) timber buyer, an individual may be licensed as an agent ofanother timber buyer.
(g) A timber buyer may not be licensed as an agent except as theprincipal agent of that timber buyer.
(h) A timber buyer may not effect or attempt to effect a purchaseexcept through an agent.
(i) A timber buyer may terminate an agency relationship bynotifying in writing the agent and the department. Termination of anagency relationship revokes the agent's license.
(j) A person who acts as an agent without a license commits aClass B misdemeanor.
(Formerly: Acts 1975, P.L.274, SEC.2.) As amended by Acts 1981,P.L.230, SEC.2; P.L.253-1983, SEC.4; P.L.158-1988, SEC.4;P.L.186-2003, SEC.80.
IC 25-36.5-1-16
Denial, suspension, or revocation of license or registration;grounds; hearing
Sec. 16. The director may revoke or suspend or refuse to issue anylicense or agent's registration under that license if the applicant orholder of that license has:
(1) been convicted of a felony;
(2) violated any provision of this chapter; or
(3) violated any rule or regulation of the department promulgatedunder this chapter.
Revocation or suspension of a license or an agent's registrationshall be determined by the director after an administrative hearing asprovided in section 12 of this chapter.
(Formerly: Acts 1975, P.L.274, SEC.3.)
IC 25-36.5-1-17
Repealed
(Repealed by P.L.220-1993, SEC.10.)
IC 25-36.5-1-18
Criminal history of applicants for registration certificate or license
Sec. 18. (a) The definitions set forth in IC 10-13-3 applythroughout this section.
(b) The department shall under IC 10-13-3-27(b) request andobtain the release of a limited criminal history from the state policedepartment on each person who applies to the department under thischapter for the issuance of either of the following:
(1) A timber buyer registration certificate.
(2) A timber buyer agent's license.
As added by P.L.220-1993, SEC.9. Amended by P.L.2-2003, SEC.68.