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(a) In connection with a timber or material sale, the director will, in his discretion, require the purchaser to provide a performance bond to guarantee performance of the terms of the contract.
(b) If the director requires a performance bond under this section, the bond amount will be based on the total value of the sale: If the total value of the sale is
(1) $50,000 or less, the bond amount will be at least 10 percent of the total value of the sale;
(2) between $50,000 and $100,000, the bond amount will be at least $5,000; or
(3) $100,000 or more, the bond amount will be at least five percent of the total value of the sale, but will not exceed $200,000.
(c) If the value of the sale is less than $10,000, the bond amount will be rounded to the nearest $100.
(d) If the value of the sale is more than $10,000, the bond amount will be rounded to the nearest $1,000.
(e) The performance bond must be executed on a form provided by the division and may be
(1) a corporate surety bond issued by a corporation licensed to do business in Alaska;
(2) a personal bond secured by cash or its equivalent or by negotiable securities acceptable to the director, in a sum equal to the amount of the bond, together with an assignment of the security to the state which is attached to and becomes a part of the security; or
(3) an individual surety bond guaranteed in a sum equal to the amount of the bond by each of at least two individual sureties who are not related to the purchaser, are of good financial standing, are acceptable to the director, and have liquid assets sufficient to meet any obligation arising from the contract.
(f) The performance bond must remain in effect for the duration of the contract or until released in writing by the director.
(g) If, as determined by the director, the removal of timber or material from a portion of the sale area has been satisfactorily completed, the director will, in his discretion and upon written request of the purchaser, reduce the amount of the performance bond.
History: Eff. 7/20/60, Register 1; am 6/24/62, Register 5; am 7/2/82, Register 83
Authority: AS 38.05.020
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Last modified 7/05/2006