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138.330 Dealer's and transporter's financial instrument.
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Every dealer or transporter required to be licensed under KRS 138.310 shall
file with the Department of Revenue a financial instrument in an amount not to
exceed three (3) months' estimated liability as computed by the department or
five thousand dollars ($5,000) whichever is greater, or in the case of a new
licensee in the minimum amount of five thousand dollars ($5,000) until such
time as an estimated three (3) months' liability can be established, provided
that the maximum amount of any financial instrument may be reduced to an
amount sufficient in the opinion of the department, considering the financial
rating and reputation of the company, to insure payment to the department of
the amount of tax, penalties and interest for which the dealer or transporter
may become liable. The financial instrument shall be on a form and with a
surety approved by the department. The dealer or transporter shall be the
principal obligor and the state the obligee. The financial instrument shall be
conditioned upon the prompt filing of true reports by the dealer and transporter
and the payment by the dealer to the State Treasurer of all gasoline and
special fuel excise taxes now or hereafter imposed by the state, together with
all penalties and interest thereon, and generally upon faithful compliance with
the provisions of KRS 138.210 to 138.340.
If liability upon the financial instrument is discharged or reduced, whether by
judgment rendered, payment made, or otherwise, or if in the opinion of the
department any surety on the financial instrument has become unsatisfactory
or unacceptable, the department may require the licensee to file a new
financial instrument with satisfactory sureties in the same amount, failing which
the department shall cancel the license of the licensee in accordance with the
provisions of KRS 138.340. If a new financial instrument is furnished as
provided above, the department shall cancel and surrender the financial
instrument for which the new financial instrument is substituted.
If upon hearing, of which the licensee shall be given five (5) days' notice in
writing, the department decides that the amount of the existing financial
instrument is insufficient to insure payment to the state of the amount of tax,
penalties, and interest for which the licensee is or may become liable, the
licensee shall, upon the written demand of the department, file an additional
financial instrument in the same manner and form with a surety thereon
approved by the department, in any amount determined by the department to
be necessary, failing which the department shall cancel the license of the
licensee in accordance with the provisions of KRS 138.340.
Any surety on a financial instrument furnished as required by this section shall
be released from all liability to the state accruing on the financial instrument
after the expiration of sixty (60) days from the date upon which the surety has
lodged with the department a written request to be released, but this request
shall not operate to release the surety from any liability already accrued or
which shall accrue before the expiration of the sixty (60) day period. The
department shall promptly, upon receipt of a request, notify the licensee who
furnished the financial instrument, and unless the licensee, before the
expiration of the sixty (60) day period, files with the department a new financial
instrument with a surety satisfactory to the department in the amount and form
prescribed in this section, the department shall cancel the license of the
licensee in accordance with the provisions of KRS 138.340. If an approved new
financial instrument is filed, the department shall cancel and surrender the
financial instrument for which the new bond is substituted.
Effective:June 20, 2005
History: Amended 2005 Ky. Acts ch. 85, sec. 367, effective June 20, 2005. -Amended 2002 Ky. Acts ch. 267, sec. 4, effective July 15, 2002. -- Amended
1996 Ky. Acts ch. 318, sec. 39, effective July 15, 1996. -- Amended 1988 Ky.
Acts ch. 285, sec. 13, effective August 1, 1988. -- Amended 1962 Ky. Acts
ch. 203, sec. 3. -- Amended 1952 Ky. Acts ch. 193, sec. 6. -- Recodified 1942
Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat.
sec. 4281g-18.
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