The 76th General Assembly adopted amendments to Chapter 72 "Timber Buyers," Iowa Administrative Code. These amendments are intended to implement Iowa Code section 456A.36 and 1996 Iowa Acts, Senate File 2212. The amendments will become effective January 1, 1997. The law requires the posting of a bond with the Iowa Department of Natural Resources by all timber buyers.
"Timber Buyer" is defined as a person engaged in the business of buying timber from the timber growers, for sawing into lumber for processing or resale. This does not include a person who occasionally purchases timber for sawing or processing for that person's own use and not for resale. Timber buyer includes a person who contracts with a timber grower on a share-profit basis to harvest timber from the grower's land.
The bond shall be in the principal amount of 10% of the total amount paid to timber growers during the preceding year, plus 10% of the total amount due or delinquent and unpaid to timber growers at the end of the preceding year, and 10% of the market value of growers' share of timber harvested during the previous year. The required minimum amount of the bond shall be $3,000 and the maximum amount shall be $15,000.
Timber buyers in Iowa must take one of the following actions to comply with this bonding law:
- For a Corporate Surety Bond - send the following forms to the Iowa DNR.
A. "Application for Bond Approval" (Form NRC72-1)
B. "Corporate Surety Bond" (Form NRC72-2)
**(Include copy of the surety bond to DNR)
or
- Buyers may provide a Certificate of Deposit in lieu of a surety bond.
A. "Application for Bond Approval" (Form NRC72-1)
B. "Timber Buyers Surety Bond" (Form NRC72-3)
C. Collateral Assignment of Certificate of Deposit. (Form NRC72-4)
**(The CD made out to the bonded buyer and the Iowa DNR)
NOTE: Certificates of Deposit are held for one year after you go out of business or change to a surety bond.
Form NRC72-5 (available from the Iowa DNR) must be completed to have the CD returned.
- Applicant must sign each form.
- Sawmill owners who buy logs must keep “proof of ownership” on file for 90 day following purchase.
- Trucks hauling logs must carry proof of ownership in the truck at all times. This can be a bill of sale, timber sale contract, or bill of landing showing owner’s name, address, phone number, point of origin, and destination.