Sec. 3. (a) Every person registered as a timber buyer shall file with the department an effective surety bond issued by a corporate surety authorized to engage in the business of executing surety bonds in Indiana.

(b) Instead of the bond required by subsection (a), the department may accept security in cash or a certificate of deposit under terms established by rule.

(c) The security required under subsection (a) or (b) shall be made payable upon demand to the director, subject to this chapter, for the use and benefit of the people of Indiana and for the use and benefit of any timber grower from whom the applicant purchased and who is not paid by the applicant or for the use and benefit of any timber grower whose timber has been cut by the applicant or registrant or the applicant's or registrant's agents, and who has not been paid for the timber.

(d) The security required under subsection (a) or (b) shall be in the principal amount of five thousand dollars ($5,000) for an applicant who paid timber growers ten thousand dollars ($10,000) or less for timber during the immediate preceding year, and an additional one hundred dollars ($100) for each additional one thousand dollars ($1,000) or fraction thereof paid to timber growers for timber purchased during the preceding year. However:

(1) before January 1, 2017, the security required may not be more than twenty thousand dollars ($20,000); and

(2) after December 31, 2016, the security required may not be more than fifty thousand dollars ($50,000).

If an applicant has not previously engaged in business as a timber buyer, the amount of the bond shall be based on the estimated dollar amount to be paid by the timber buyer to timber growers for timber purchased during the next succeeding year, as set forth in the application.

(e) The security required under subsection (a) or (b) shall not be canceled or altered during the period for which the certificate to the applicant was issued except upon at least sixty (60) days notice in writing to the department.

(f) Security shall be in a form and contain the terms and conditions as may be approved from time to time by the director, be conditioned to secure an honest cutting and accounting for timber purchased by the registrant, secure payment to the timber growers, and insure the timber growers against all fraudulent acts of the registrant in the purchase and cutting of the timber of this state.

(g) If a timber buyer fails to pay when due any amount due a timber grower for timber purchased, or fails to pay legally determined damages for timber wrongfully cut by a timber buyer or the timber buyer's agent, or commits any violation of this chapter, an adjudicative proceeding on the bond for forfeiture may be commenced, and notice of the proceeding shall be provided, under IC 4-21.5-3-6. A surety or person in possession of the security provided under subsection (a) or (b) is entitled to notification of the proceeding. If a final agency action is entered by the department under this subsection against the timber buyer, the surety or other person in possession of the security shall deliver the amount of the security identified in the order. A proceeding for forfeiture of a timber buyer's bond under IC 4-21.5 is the exclusive remedy under law for the forfeiture of the bond.

(h) An owner of property seeking a preliminary injunction or restraining order against a person, corporation, or other entity to prevent or stop the wrongful cutting of timber on the owner's property is relieved of the requirement to post a bond or other security with the court as a prerequisite to the issuance of the preliminary injunction or restraining order. However, this subsection does not apply to a property owner who seeks a preliminary injunction or restraining order to prevent or stop alleged wrongful cutting by a timber cutter or timber buyer with whom the property owner had contracted for the cutting or sale of timber.

Formerly: Acts 1972, P.L.190, SEC.1. As amended by P.L.253-1983, SEC.2; P.L.158-1988, SEC.2; P.L.220-1993, SEC.1; P.L.98-2001, SEC.3; P.L.155-2015, SEC.27.