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Timber Loan Board Regulations

made under subsection 20(4) of the
Forests Act
R.S.N.S. 1989, c. 179
N.S. Reg. 14/65 (August 18, 1965)
as amended up to and including O.I.C. 84-430 (April 10, 1984), N.S. Reg. 85/84

1 In these regulations, unless the context otherwise requires, the expression

(a) "Act" means the Forests Act, Revised Statutes of Nova Scotia, 1989, Chapter 179.
Clause 1(a) replaced: O.I.C. 82-509, N.S. Reg. 81/82.

(b) "Board" means the Timber Loan Board;

(c) "forest lands" means lands covered with trees or to be planted with trees within a 30 mile radius of a mill of the person applying for the loan;

(d) "forest product mill" means all forest product mills other than pulp and paper mills;

(e) "person" means

(i) an individual who is a resident of Nova Scotia and owns a forest product mill and regularly carries on the business of operating a forest product mill, or

(ii) a corporation, the majority of whose shares are beneficially held by residents of the Province of Nova Scotia and regularly carries on the business of a forest product mill.

2 The Board may make a loan or loans to a person for the purchase of forest lands up to the amount of $300,000.00 per person, and in larger amounts with the approval of the Governor in Council.
Section 2 replaced: O.I.C. 82-509, N.S. Reg. 81/82.

3 To qualify for a loan a person shall

(a) have been efficiently operating an established forest product mill with satisfactory prospects of a long term operation; and

(b) in the case of individuals or principals, be over the age of 19 years.
Clause 3(b) amended: O.I.C. 82-509, N.S. Reg. 81/82.

4 Every application for assistance must be made on a form prescribed by the Board and must be filed by the person applying; if the person applying is married, the application form must be signed by his wife unless the Board otherwise directs.

5 An application for a loan hereunder shall include

(a) for an individual

(i) a statement of assets and liabilities of the person at the date of application,

(ii) the names and addresses of three references, and

(iii) such other information as the Board may require;

(b) for a corporation

(i) a statement of the assets and liabilities and a profit and loss statement of the company at the end of its fiscal year or at the date of application certified by an accountant licensed under the Public Accountants Act,

(ii) a list of names of the directors, officers, shareholders and share ownership of the company,
Subclause 5(b)(ii) amended: O.I.C. 82-509, N.S. Reg. 81/82.

(iii) a certified copy of a Special Resolution of the shareholders of the company authorizing the company to borrow the money and a Certificate from the Registrar of Joint Stock Companies showing the status of the company, and
Subclause 5(b)(iii) amended: O.I.C. 82-509, N.S. Reg. 81/82.

(iv) such other information as the Board may require.
Subclause 5(b)(iv) added: O.I.C. 82-509, N.S. Reg. 81/82.

6 Before making a loan, the Board shall have the forest lands being purchased appraised by the Department of Natural Resources and after having given consideration to the appraisal of the Department of Natural Resources, the Board shall establish the market value of the forest lands and such value shall form the basis for the loan.
Section 6 replaced: O.I.C. 82-509, N.S. Reg. 81/82.

7 In appraising the forest lands and in arriving at the market value of the forest lands, the Department of Natural Resources and the Board shall consider the following criteria:

(a) present stumpage value of timber on lands;

(b) land value;

(c) average annual growth;

(d) current prices being paid for similar forest lands;

(e) such other factors as the Board may consider material.
Section 7 amended: O.I.C. 82-509, N.S. Reg. 81/82.

8 The Board may make a loan of amounts up to 75% of the market value of the forest lands to any person qualifying hereunder.

9 (a) Every application for a loan shall be accompanied by the sum of $100.00.

(b) If an application for a loan is rejected, the sum of $100.00 less a service charge of $50.00 shall be refunded.

(c) If an application for a loan is approved, $100.00 less a service charge of $50.00 shall be applied to the cost of legal services involved in completing the transaction.

(d) Reasonable legal fees to close a transaction shall be paid by the Board and the estimated amount may be included as part of the total loan.
Section 9 replaced: O.I.C. 82-509, N.S. Reg. 81/82.

10 Every loan made by the Board under these regulations shall be repaid within a period of years not greater than 20 and shall be secured by the personal covenant of the person applying for the loan, and in the case of a partnership, by a personal guarantee of the partners, and in the case of a company, by the personal guarantee of the beneficial shareholders, if the Board so requests, and by a mortgage on the woodlot for which monies are borrowed, and shall bear interest at the same rate as is determined from time to time by regulation made pursuant to Chapter 7 of the Revised Statutes of Nova Scotia, 1989, the Agriculture and Rural Credit Act, to be applicable to farm loans of comparable amount, or such other rate as shall be approved from time to time by Governor in Council, and each mortgage shall contain covenants that the borrower

(a) shall repay monthly, semi-annually, or yearly that portion of blended principal and interest in equal installments for the term approved, and such payments shall be made at the date and time set out in the said mortgage;

(b) will not remove any gravel, fill or forest products from the property without first obtaining permission of the Board;

(c) will keep the woodlot under management for the production of sawlogs, pulpwood and other commercial forest products for the full term of the loan;

(d) will, at the request of the Board, provide the Board with a copy of all financial statements, and will file with the Board at the end of each calendar year a statement setting out the details of any forest products harvested on the woodlot during the preceding twelve month period;

(e) will obtain the written consent of the Board to assign any rights, title or interest under the mortgage;

(f) will not conduct a cutting operation on the forest lands without the permission of the Board; and

(g) will file with the Board such information as the Board considers necessary including a statement setting out the type of operation to be undertaken, the intended place of operation, the type of product intended to be cut, the quantity stated in feet board measure, cords, lineal feet or pieces and the location on the forest lands where cutting is intended to take place.
Section 10 replaced: O.I.C. 82-509, N.S. Reg. 81/82; amended: O.I.C. 84-430, N.S. Reg. 85/84.
Section 11 repealed: O.I.C. 82-509, N.S. Reg. 81/82.
Section 12 repealed: O.I.C. 82-509, N.S. Reg. 81/82.

13 In considering an application for a loan hereunder, the Board shall consider the following criteria:

(a) applicant's financial status;

(b) revenue producing capacity of the forest lands;

(c) the person's record with regard to business ability and past performance;

(d) consolidation and amalgamation of holdings; and

(e) such other factors as the Board may consider material.

14 Separate loans to individuals, partnerships or corporations shall be cumulative with respect to the interest rate on the loan based on the principal balance outstanding on all loans at the time of loan approval.
Section 14 added: O.I.C. 82-509, N.S. Reg. 81/82.