STATE OF OREGON by HC12091617371

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									Proposed Order
Department of Forestry
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Nel-Log, Inc.


                                      STATE OF OREGON
                  Before the Hearing Officer Panel of the Employment Department
                                      Department of Forestry



In the Matter of the Violation of                  )
Forest Practices Act,                              )
ORS 527.670(6), OAR 629-605-0170(1)(a),            )          Hearing Officer Panel Case No. G60283
and OAR 629-605-0150(1)                            )         (ODF)
by Nel-Log, Inc.                                   )
                                                   )
   Respondent.)



                                        PROPOSED ORDER

                                      HISTORY OF THE CASE

On February 24, 1999 the Oregon Department of Forestry (ODF) issued to and served on Nel-Log,
Inc. (respondent) three Notices of Violation/Citations alleging that respondent had violated ORS
527.670(6) by failing to notify the state forester prior to conducting an operation, that respondent had
violated OAR 629-605-0170(1)(a) by failing to obtain prior approval of a written plan before
conducting harvest activity within 100 feet of a Type D stream, and that respondent violated OAR
629-605-0150(1) by failing to provide the state forester the opportunity to assess the operation for
resource protection.

On August 3, 1999, ODF issued to respondent three separate Notices of Civil Penalty; Findings of
Fact; Proposed and Final Orders, Case No. 99-CM029, charging respondent with violating ORS
527.670(6) by conducted an operation on forest land on January 27, 1999 without first notifying the
state forester of the operation, Case No. 99-CM030, charging respondent with violating OAR 629-
605-0170(1)(a) by conducting an operation on forest land on January 27, 1999 without first obtaining
written approval of a written plan to operate within 100 feet of a Type D stream, and Case No. 99-
CM031, charging respondent with violating OAR 629-605-0150(1) by conducting an operation on
forest land without waiting 15 days after notifying the state forester. ODF did not waive the 15-day
waiting period in Case No. 99-CM031 because of a Type D stream on the unit.

ODF assessed a penalty against respondent in the amount of $400 for each of the three violations.

On August 16, 1999 respondent filed a written request for hearing on all three notices of civil penalty
and submitted an answer and defense to the notices.

The hearing officer assigned to the case, Ken L. Betterton, held a pre-hearing conference by
telephone with the parties on February 25, 2000 to discuss procedures for the hearing.




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Respondent’s three cases were consolidated for hearing and disposition with three similar citations
and Notices of Civil Penalty; Findings of Fact; Proposed and Final Orders that ODF issued to
Thomas Creek Lumber and Log Co.

A hearing was held in Mehama, Oregon on April 11, 2000. The hearing was continued to May 18,
2000, in Salem, Oregon, at which time the hearing concluded. Robert Lundblad, civil penalty
administrator for ODF, represented ODF. Gregory J. Miner, attorney at law, represented respondent.

Jim Ziobro, Robert Lundblad, Dwayne Jackson and Shannon Gisler testified as witnesses for ODF.
H. Mike Miller, George Nelson and Brent Walker testified as witnesses for respondent.

ODF submitted its written closing argument on May 26, 2000. Respondent submitted its closing
written argument on June 6, 2000. Respondent submitted a supplement to its closing written
argument on June 8, 2000. ODF submitted its reply written argument on June 14, 2000. The hearing
officer then closed the record and took the matter under advisement.

On or about June 16, 2000, ODF submitted a motion to withdraw the citation issued February 24,
2000 and Notice of Civil Penalty; Findings of Fact; Proposed and Final Order issued August 3, 1999
in Case No. 99-CM030, for the reason that respondent did not violate OAR 629-605-0170(1)(a).
ODF had earlier classified the stream in question as a Type N stream on its records, then changed the
stream classification on its records to a Type D stream without following its own administrative rule,
OAR 629-635-0210(2), for changing the classification of a stream.


                                          LEGAL ISSUES

(A) Did respondent violate ORS 527.670(6), and if so, what is the appropriate penalty?

(B) Did respondent violate OAR 629-605-0150(1), and if so, what is the appropriate penalty?

(C) Did respondent violate OAR 629-605-0170(1)(a), and if so, what is the appropriate penalty?

(D) Should respondent be awarded reasonable attorney fees and expenses under ORS 527.700(7)?


                                       FINDINGS OF FACT

(1) George Nelson (Nelson) owned Nel-Log, Inc. (respondent). (2) Respondent performed services
as an operator on timber harvest operations. (3) Over the years respondent worked for Thomas Creek
Lumber and Log Co. (Thomas Creek). (4) Brent Walker (Walker) owns Thomas Creek. (5) Walker
owns timber land in sections 3, 4, and 34, Township 6 S., Range 1 E., W.M., in central Marion
County, Oregon, more commonly known as the Powers Creek area. (6) Thomas Creek has
conducted timber operations in the Powers Creek area since 1992 or 1993. (7) Thomas Creek has
hired respondent to help it cut, yard and load logs on some of the forest operations that Thomas
Creek has conducted over the years in the Powers Creek area. (8) Powers Creek is a Type F stream.




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(9) From 1992 through 1998 Thomas Creek conducted timber operations in sections 3, 4, and 34 in
the Powers Creek area. (10) Thomas Creek has generally worked with Forest Practice Forester (FPF)
Dwayne Jackson over the years on its operations in the Powers Creek area.

(11) In August 1998, Thomas Creek submitted a written notification of operation and a request to
waive the 15-day waiting period, listing respondent as landowner and Paul Toews as operator, to
conduct a timber operation on approximately 20 acres along Powers Creek in section 4 from August
25, 1998 through December 31, 1998. (12) Walker signed the notification as landowner. (13) FPF
Jackson waived the 15-day waiting period.

(14) In November 1998, Thomas Creek submitted a notification of operation and a request to waive
the 15-day waiting period, listing Thomas Creek as landowner and respondent as operator, to conduct
a timber operation on approximately 20 acres of additional land along Powers Creek in section 4
from November 18, 1998 through December 31, 1998. (15) Walker signed the notification as
landowner. (16) FPF Jackson waived the 15-day waiting period.

(17) In December 1998, Thomas Creek submitted a notification of operation, a written plan, and a
request to waive the 15-day waiting period, listing Thomas Creek as landowner and respondent as
operator, to conduct a timber operation on land in section 4 from December 23, 1998 through
December 31, 1998. (18) Walker signed the notification as landowner. (19) FPF Jackson approved
the plan and waived the 15-day waiting period.

(20) In December 1998, FPF Jackson told Walker that he would be taking a six to eight week leave
of absence starting in late December 1998. (21) ODF assigned FPF Shannon Gisler to cover
Jackson’s territory for him while he was on his leave of absence.

(22) When Thomas Creek and respondent finished the last operation in late December 1998 or early
January 1999 in section 4, they moved the equipment approximately 300 to 400 feet to the north and
east along an old logging road into section 34 to land owned by Walker, to conduct an operation on
approximately five acres near an old barn. (23) A county road, Timber Trail Road, runs generally
from southwest to northeast along the east part of section 4 into section 34. (24) Thomas Creek and
respondent operated on both sides of Timber Trail Road in section 4 in 1998.

(25) Thomas Creek started the timber operation in section 34 near the old barn about January 18,
1999 (see map, Exhibit 72). (26) Thomas Creek did not file a written notification with ODF for the
operation in section 34 prior to beginning the operation. (27) Thomas Creek considered the
operation in section 34 to be a small, “make-work” operation, an extension of the operation in section
4, to keep the crews busy until they could move on to a larger operation elsewhere.

(28) Respondent only yarded and loaded logs for Thomas Creek on the operations in November and
December 1998 and in January 1999. (29) Respondent did not cut or haul logs on those operations.
(30) Thomas Creek did the cutting and hauling of the trees on the operations in section 4 in
November and December 1998 and in section 34 in January 1999. (31) Respondent merely followed
Thomas Creek’s cutters the 300 to 400 feet from the operations in section 4 to the operation in
section 34.




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(32) Respondent never filed written notifications of operation or requested waiver of the 15-day
waiting period over the years it did work for Thomas Creek. (33) Rather, Thomas Creek always filed
the notifications of operation and requests for waiver of the waiting period on the operations on
which it hired respondent to work for it.

(34) On January 26, 1999 an ODF employee reported to FPF Gisler seeing a timber operation in
section 34. (35) Being unfamiliar with any operation in that area, FPF Gisler drove to the site of the
operation on January 27, 1999 and saw a few workers yarding and loading logs in the area near the
old barn. (36) The workers told FPF Gisler they got their work instructions from Walker. (37) FPF
Gisler saw two small streams, one running from south to north on the west side of the old barn, and
the other one running from south to north on the east side of the old barn. (38) The stream on the
west side of the old barn is three to four feet wide and four to six inches deep.

(39) FPF Gisler returned to the ODF office in Mehama, Oregon, looked for a notification of
operation for the area near the old barn in section 34, and looked at the ODF stream map for that
area. (40) FPF Gisler could find no written notification on file for the operation near the old barn.
(41) FPF Gisler also saw on the ODF stream map that the two small steams on each side of the old
barn were classified as Type N streams. (42) FPF Gisler then checked records with the Oregon
Department of Water Resources and discovered a registered domestic water right from the late 1960s
downstream on the stream on the west side of the old barn. (43) FPF Gisler changed the Type N
stream classification on ODF’s stream map records of the stream on the west side of the old barn to
Type D to reflect the designation for the stream that she found in the Department of Water Resources
records. (44) ODF did not give landowners immediately adjoining portions of the stream affected by
the change written notice before reclassifying the stream from Type N to Type D.

(45) On January 29, 1999, FPF Gisler talked to Walker by telephone and informed him that no
notification had been filed for the operation in section 34, and that one needed to be filed.
(46) Walker faxed a notification of operation and request for waiver of the 15-day waiting period,
dated January 15, 1999, to FPF Gisler on January 29, 1999, to conduct an operation on five acres of
land in section 34 from January 18, 1999 through February 28, 1999. (47) Walker signed the
notification and request for waiver as the landowner and listed Nel-Log, Inc. as the operator.

(48) Thomas Creek cut and hauled a total of about 27 loads of logs from the operation near the old
barn from mid-January until February 9, 1999. (49) Respondent yarded and loaded a few loads of
logs between February 3 and February 6, 1999.

(50) FPF Gisler returned to inspect the operation around the old barn on February 9, 1999.
(51) Respondent had one load of logs to yard and load as of February 9, which it loaded that day.
(52) Respondent then finished its work on the operation and pulled its workers and equipment off the
operation on February 10, 1999, after Thomas Creek’s operation ended on February 9. (53) FPF
Gisler told some workers at the site of operation on February 9 to stop all operations because she had
not waived the 15-day waiting period due to the presence of what she believed was a Type D stream
on the west side of the old barn.

(54) On February 9, 1999 FPF Gisler faxed a notice to stop all operations to Walker. (55) FPF Gisler
mailed a similar notice to stop all operations to respondent on February 9, 1999. (56) Respondent
received its notice in the mail a few days later.


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(57) In her telephone conversation with Walker on January 29, 1999, FPF Gisler told Walker not to
cut trees within 100 feet of the streams on each side of the old barn. (58) FPF Gisler never told
Walker prior to February 9, 1999 to stop all operations. (59) Walker did not cut trees within 100 feet
of either stream after FPF Gisler warned him on January 29, 1999.

(60) The State of Oregon reclassified streams throughout the state in 1994. (61) ODF then classified
streams on its water maps so that it could oversee forestry operations consistent with state stream
classifications and advise operators on stream classification. (62) ODF designated the two streams
on each side of the old barn in section 34 as Type N streams. (63) ODF made that classification
based on its belief that no domestic water rights existed for the two streams in the area of the old barn
and because fish did not inhabit the streams.

(64) FPF Jackson told Walker at various times after 1994 that the two streams near the old barn were
classified as Type N streams. (65) Walker also looked at stream maps in the ODF office in Mehama,
Oregon at different times between 1995 and 1998, and saw that ODF had classified the two streams
as Type N streams. (66) Nelson understood, based on his experience with Thomas Creek and with
FPF Jackson, that the two streams on each side of the old barn were Type N streams.

(67) A domestic water right on the stream on the west side of the old barn had not been used by the
property owners since the late 1960s.

(68) Respondent raised in its August 16, 1999 letter to ODF asking for a hearing that it was not the
operator on the operation, that it had no control over Thomas Creek’s cutters or the trucking of the
logs, and that respondent merely yarded and loaded the trucks. (69) Thomas Creek raised in its
August 30, 1999 letter to ODF, which expanded on its August 17, 1999 letter requesting a hearing,
that the stream on the west side of the old barn was a Type N stream and not a Type D stream.

(70) The hearing on April 11, 2000 lasted more than five hours. (71) The hearing on May 18, 2000
lasted more than six hours.

(72) On June 16, 2000, after all the closing briefs had been submitted, ODF submitted its motion to
withdraw the citation issued February 24, 1999 and the Notice of Civil Penalty; Findings of Fact;
Proposed and Final Order, Case No. 99-CM030, issued to respondent on August 3, 1999.


                                 ULTIMATE FINDINGS OF FACT

Respondent did not commence an operation in January 1999.

Respondent had no responsibility to file a request to waive the 15-day waiting period.

Respondent did not need to file a written plan to operate within 100 feet of the stream.




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                                  CONCLUSIONS AND REASONS

(A) ODF charged respondent with violating ORS 527.670(6) for not filing a written notification prior
to the start of an operation in January 1999.

ORS 527.670(6) provides:

        “An operator, timber owner or landowner, before commencing an operation, shall notify the
        State Forester. The notification shall be on forms provided by the State Forester and shall
        include the name and address of the operator, timber owner and landowner, the legal
        description of the operating area, and any other information considered by the State Forester
        necessary for the administration of the rules promulgated by the board pursuant to ORS
        527.710. Promptly upon receipt of such notice, the State Forester shall send a copy of the
        notice to whichever of the operator, timber owner or landowner did not submit the
        notification. The State Forester shall also send to the operator, the timber owner and the
        landowner a copy of the rules applicable to the proposed operation. * * *.”

ORS 527.670(6) requires the operator, timber owner or landowner (emphasis added) to file the notice
of operation. The statute does not require each of those parties to file a notification in each and every
case. Thomas Creek filed the notification for the operation in January 1999 on land in section 34,
albeit after the operation had begun.

Respondent reasonably believed that Thomas Creek had the responsibility to file notifications on the
operations on which Thomas Creek started. Thomas Creek hired respondent to work for it. Thomas
Creek had always filed the notifications on the operations when the two companies worked together.
Respondent did not file the notifications. Thomas Creek supplied the cutters for the operation in
January 1999, as well as for the operations in November and December 1998, which occurred a short
distance to the south and west, in section 4. Respondent only yarded and loaded the logs for Thomas
Creek. Respondent merely followed Thomas Creek’s cutters the 300 to 400 feet from the operation
in December 1998 in section 4 to the operation in section 34 in January 1999. Respondent
reasonably believed it had no responsibility to file a notification in January 1999.

ODF failed to prove that respondent violated ORS 527.670(6). No civil penalty should be imposed
on respondent in Case No. 99-CM029.


(B) ODF charged respondent with violating OAR 629-605-0150(1) by not waiting 15 days before
commencing an operation. ODF did not waive the 15-day waiting period because of a Type D
stream on the unit.

OAR 629-605-0150 provides:

        “(1) The operator, landowner or timber owner shall notify the State Forester as required by
        ORS 527.670(6), at least 15 days prior to commencement of an operation.

        “(2) * * * [t]he State Forester may waive the fifteen (15) day waiting period required in
        section (1) of this rule. Such waivers may be granted when the State Forester has already


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        previewed the operation site or has otherwise determined the operation to have only minor
        potential for resource damage. Such waivers shall be made in writing, and on an individual
        notification basis.

            “* * *.”

“Type D stream” means a stream that has domestic water use, but no fish use. OAR 629-600-
0100(68). “Type F stream” means a stream with fish use, or both fish use and domestic water use.
OAR 629-600-0100(69). “Type N stream” means a stream with neither fish use nor domestic water
use. OAR 629-600-0100(70).

The responsibility under OAR 629-605-0150(1) falls on the party responsible under ORS 527.670(6)
for filing the notice of operation. In this case, for the reasons set forth in Paragraph A above, that
responsibility fell to Thomas Creek, not to respondent. Respondent did not violate OAR 629-605-
0150(1).

Furthermore, ODF alleged in its Notice of Civil Penalty; Findings of Fact; Proposed and Final Order,
Case No. 99-CM031, that respondent violated OAR 629-605-0150(1) because “a notification was
received January 29, 1999 and the forest practice forester (FPF) did not waive the 15-day waiting
period because of a Type D stream on the unit.”

ODF is bound by the pleadings in its notice. OAR 629-670-0310(3) provides that “evidence shall not
be taken on any issue not raised in the notice * * *.”

ODF has now abandoned its effort to hold respondent liable for a civil penalty for violating OAR
629-605-0170(1)(a), Case No. 99-CM-030, because the stream in question was not a Type D stream
for purposes of the Oregon Forest Practices Act. Case Nos. 99-CM030 and 99-CM031 are linked
because of the Type D stream allegations. If the stream was not a Type D stream, it follows that
ODF would have waived the 15-day waiting period, and that respondent should not be found liable
for violating OAR 629-605-0150(1). ODF pleaded in its notice of civil penalty that it did not waive
the 15-day waiting period because of the Type D stream designation.

ODF failed to prove that respondent violated OAR 629-605-0150(1). No civil penalty should be
imposed in Case No. 99-CM031.

(C) ODF seeks to withdraw its citation and notice of civil penalty in Case No. 99-CM-030. ODF
correctly concluded on June 16, 2000 that it changed the classification of the stream in question
without following its own administrative rules. Respondent did not violate OAR 629-605-
0170(1)(a).

(D) Respondent seeks an award of its attorney fees and expenses from ODF.

ORS 527.700(7) allows the board to award reasonable attorney fees and expenses to each of the
prevailing parties against any other party who the board finds presented a position without probable
cause to believe the position was well-founded.




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What is meant by “expenses” in this context is not defined in ORS Chapter 527 and I can find no
ODF administrative rule that defines “expenses” for purposes of ORS 527.700(7).

Respondent did not raise the issue of attorney fees and expenses until it submitted its closing brief on
June 8, 2000. However, there is no requirement in ORS Chapter 527 or ODF administrative rules
that a party plead a request for attorney fees and expenses in its request for hearing or in its answer.
OAR 629-670-0310(2) requires a party requesting a hearing to state affirmatively in writing in its
request for hearing, or within 10 days following its request for hearing, any and all claims for
defenses to the notice assessing a civil penalty. However, a request for attorney fees and expenses is
not a claim or defense to the allegations in a notice of civil penalty. Respondent should not be
precluded from requesting attorney fees and expenses due to its timing in making its request.

Both sides spent considerable time and energy prior to and during the hearing on trying to prove or
disprove whether the stream on the west side of the old barn was a Type D or Type N stream,
whether a domestic water right existed on the stream, where an intake pipe was located on the
stream, and whether any domestic water right was still valid or had been abandoned. Respondent’s
efforts on these questions resulted from the position taken by ODF that the stream actually was a
Type D stream, despite ODF’s stream map records that classified the stream as Type N, and despite
ODF’s long-standing practice that showed and treated the stream as a Type N stream.

A reading of OAR 629-635-0210 establishes that ODF is charged with maintaining a map showing
the classification of waters in the state in each ODF unit office, and that once a water of the state has
been classified, ODF cannot change the classification without written notice to the landowners
immediately adjoining the portion(s) of the water to be reclassified.

OAR 629-635-0210 provides:

        “(1) The State Forester shall maintain a map showing the classification of waters of the state
        in each Department of Forestry unit office where notice of operations required by ORS
        527.670(6) may be submitted. The map shall show streams, lakes and significant wetlands of
        known classification within the geographic area of responsibility for that unit office. For
        streams, the maps shall indicate the size class and, when known, extent of fish use and
        domestic water use classification.

        “(2) Once a water of the state has been classified according to OAR 629-635-0200, the State
        Forester shall not change the classification without written notice to the landowners
        immediately adjoining the portion(s) of water to be reclassified. Notice to landowners shall
        include the reason for the change of classification and applicable rules.

        “* * *.”

OAR 629-635-0210 is clear and straightforward.

ODF concluded on June 16, 2000, after the hearing had ended on May 18, 2000, and after all the
closing briefs has been submitted on June 14, 2000, that ODF had violated OAR 629-635-0210 when
it changed the classification of the stream from Type N on it map to Type D without giving proper
notice to adjoining landowners.


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ODF knew as of January 27, 1999 that it classified the stream as Type N on its map. In fact, ODF
had classified and treated the stream as Type N for several years. FPF Jackson had told Walker over
the years that the stream was Type N, and Walker had seen the Type N designation on ODF maps.
Thomas Creek and respondent had conducted timber operations around the stream in prior years, and
ODF had waived waiting periods and not required Thomas Creek to file written plans because no one
believed written plans were needed.

FPF Gisler found the domestic water permit on the stream by examining Department of Water
Resources records in the ODF unit office on January 27, 1999, apparently without much difficulty.
ODF could have made the same discovery between 1994 and 1999 by looking at the same records as
did FPF Gisler.

Walker put ODF on notice in his August 30, 1999 letter, in the companion cases consolidated for
hearing with respondent’s cases, that Thomas Creek took the position that the stream in question had
always been a Type N stream.

By asking to withdraw its citation and notice of civil penalty in Case No. 99-CM030, ODF
acknowledges that it believes its position was not well-founded. There is no good reason why what
ODF concluded on June 16, 2000, it could not have concluded a year or more earlier. A quick
reading of OAR 629-635-0210 leads to the conclusion that ODF cannot change a stream
classification without following its own administrative rules.

Respondent prevailed on the notice of civil penalty that charged it with operating within 100 feet of a
Type D stream without first filing a written plan. Respondent did not violate OAR 629-605-
170(1)(a).

Although respondent did not violate ORS 527.670(6), ODF had a reasonable basis to believe that
respondent violated the statute.

Respondent no doubt has spent a considerable sum of money on attorney fees to prepare and defend
itself on the stream classification issues. Respondent should be awarded attorney fees and expenses
for its defense on Case Nos. 99-CM030 and 99-CM031.


                                        PROPOSED ORDER

(A) Respondent did not violate ORS 527.670(6) and should not pay any civil penalty.

(B) Respondent did not violate OAR 629-605-0150(1) and should not pay any civil penalty.

(C) Respondent did not violate OAR 629-605-0170(1)(a) and should not pay any civil penalty.

(D) Respondent should be awarded reasonable attorney fees and expenses under ORS 527.700(7).


Dated this 18th day of July, 2000                      _______________________
                                                       KEN L. BETTERTON
                                                       Hearing Officer


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Notice: This is not the Final Order. Exceptions to this Proposed Order must be filed in writing with
the Department of Forestry, 2600 State Street, Salem, Oregon 97310, Attn: Sandy Middleton, not
later than ten (10) days after the date this Proposed Order was filed. Oral or written argument may
be presented to the Board at the time it considers the disposition of the Proposed Order.

The exceptions shall be confined to factual and legal issues which are essential to the ultimate and
just determination of the proceeding, and shall be based only on grounds that:

        (a) A necessary finding of fact is omitted, erroneous, or unsupported by the preponderance of
        the evidence on the record;

        (b) A necessary legal conclusion is omitted or is contrary to law or the Board’s policy; or

        (c) Prejudicial procedural error occurred.

After the Board has received and reviewed the Proposed Order and the exceptions, if any, the Board
shall:

        (a) Entertain such oral argument as the Board determines necessary or appropriate to assist
        the Board in the proper disposition of the case;

        (b) Remand the matter to the hearing officer for further proceedings on any issues of fact
        which the Board believes were not fully or adequately developed; or

        (c) Enter a Final Order adopting the recommendation of the State Forester or hearing officer
        as the Board’s order or rejecting the recommendation of the hearing officer. If the Board
        elects to reject the recommendation of the hearing officer; the Board’s Final Order shall
        contain necessary findings of fact and conclusions of law.

You are entitled to judicial review of the Final Order. Judicial review is by the Oregon Court of
Appeals pursuant to the provisions of ORS 183.482. Judicial review may be obtained by filing a
petition for review with the Office of State Court Administrator, Supreme Court Building, Salem,
Oregon 97310, within 60 days from the service of the Final Order.

                                             * * * * *




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