28-5631

28-5631. Bonds; amount; failure of
security

A. A supplier shall file a bond with the director on a form approved by the
director with a surety company authorized by the corporation commission to transact
business in this state as surety on the bond. The supplier shall be the principal
obligor, and this state shall be the obligee on the bond. The bond shall be conditioned
on the prompt filing of true reports and the payment by the supplier to the director of
all motor fuel taxes that are levied or imposed by this state, together with all
penalties and interest on the taxes, and generally on faithful compliance with this
article.

B. The director shall fix the total amount of the bond required of a supplier and
may increase or reduce the amount at any time, subject to the limitations provided in
this article. In fixing the total amount of the bond required of a supplier, the
director shall require a bond in an amount equal to two times the director's estimate of
the supplier's monthly tax, determined in a manner the director deems proper. The total
amount of the bond required of a supplier shall be at least five thousand but not more
than one million dollars.

C. A supplier may request in writing that the director return, refund or release a
bond required pursuant to this section. The director may return, refund or release a bond
if the director determines that the supplier has continuously complied with this article
for at least the previous three consecutive years. If the director determines that the
return, refund or release of the bond would jeopardize state revenues, the director may
elect to retain the bond or may reimpose a requirement for a bond. A person who is
aggrieved by a decision of the director pursuant to this subsection may request a hearing
pursuant to section 28-5924.

D. If liability on the bond filed by the supplier with the director is discharged
or reduced or if in the opinion of the director a surety on the bond given has become
unsatisfactory or unacceptable, the director may require the supplier to file a new bond
with satisfactory sureties in the same amount. If the supplier fails to file a new bond
as required, the director shall cancel the license of the supplier immediately. If the
new bond is furnished by the supplier, the director shall cancel and surrender the bond
for which the new bond is substituted.

E. If on a hearing, of which the supplier was given five days' notice in writing
mailed to the supplier's last known address, the director decides that the amount of the
existing bond is insufficient to ensure payment to this state of the amount of the tax,
penalties and interest for which the supplier is or may become liable, the supplier, on
the written demand of the director, shall immediately file an additional bond in the same
manner and form with a surety company on the bond approved by the director in an amount
determined by the director as necessary to secure at all times payment by the supplier of
all taxes, penalties and interest due under this article. If the supplier fails to file
an additional bond as required, the director shall cancel the license of the supplier
immediately.

F. A surety on a bond furnished by a supplier shall be released and discharged from
all liability to this state accruing on the bond on the last day of the month that
includes the sixtieth day after the date on which the surety files with the director a
written request to be released and discharged. The request does not relieve, release or
discharge the surety from liability already accrued or from liability that accrues before
the last day of the month that includes the end of the sixty day period. On receipt of
notice of the request, the director shall promptly notify the supplier who furnished the
bond and shall cancel the license of the supplier immediately, unless the supplier, on or
before the last day of the month that includes the end of the sixty day period, files
with the director a new bond with a surety company satisfactory to the director in the
amount and form provided in this section. If the new bond is furnished by the supplier,
the director shall cancel and surrender the bond for which the new bond is substituted.

G. This section does not relieve a supplier of the supplier's duty to file the
verified monthly report required by this article.