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Calculation of performance security for TUCs

Calculation of performance security for TUCs

 
Title:
Calculation of performance bond for TUCs
No:
05
Version:
2
Date:
01 June 2003
 
Prepared by:
GB/JD
Approved by:
 
Preceded by Procedure No:
03 and 04
Followed by Procedure No:
07
Purpose:
To specify the value of the performance bond for inclusion in TUC prospectus and TUC condition
Applies to:
FC Chief ExecutiveRMSC Director and staffTREC Secretariat FC Legal Officer
Reference Documents:
LI 1649, LIi 1721TUC Prospectus TUC
Procedure:
1.       The RMSC Director assigns staff to prepare the value of the performance bond to be specified in the prospectus for each TUC.� This value will constitute the amount of the performance bond to be arranged by the TUC holder for the first year of the TUC term.
2.       The method for calculating the value of the performance bond for both on and off reserve TUCs is as follows: a)      The proposed first-year harvest schedule and other pertinent information are examined to construct an estimate of the expected harvest volume of each species.� Appropriate adjustments apply so that the estimated volume corresponds to the volume for which the stumpage fee will be charged. b)      The current stumpage for each species, is calculated as specified in LI 1649 Schedule 3, multiplied by each volume identified in 2 a) and summed. c)      The sum is rounded up to the nearest �1,000.
3.       The RMSC Director ensures that the value is accurately presented in the TUC prospectus.
4.       After award of each TUC, the TREC Secretariat and the FC Legal Officer ensures that the value of the performance bond posted by the TUC holder is equal to the amount specified in the relevant prospectus.
5.       In the second and subsequent years of the TUC term, {at least [one] month prior to the TUC's anniversary date} OR ANNUAL RENEWAL DATE OF PERFORMANCE BOND, the RMSC Director recalculate the revised value of the performance bond in accordance with the procedure in Step 2 above, except projected harvest volume and species distribution is taken from the results of the TUC stock survey from compartments to be harvested in following year instead of the inventory results. Where no harvest is scheduled for a forthcoming year, the performance bond remains at the current year's value.
6.       The value of the performance bond is calculated by using the stumpage fees in effect on the anniversary date multiplied by the corresponding volume, summed and rounded up to the nearest  1,000.
7.       The Chief Executive advises each TUC holder of his revised Performance bond value.
8.       The TREC Secretariat maintains a record of the annual calculation for each TUC.

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