§ 3102 - Licensing and bonding of distributors
§ 3102. Licensing and bonding of distributors
(a) Before commencing business, on application, a distributor shall first procure a license from the commissioner of motor vehicles permitting him or her to continue or to engage as a distributor. Before the commissioner issues a license, the distributor shall file with the commissioner a surety bond in a sum and form and with sureties as the commissioner may require in a sum not to exceed $400,000.00 conditioned upon the issuance of the report, the payment of the tax and penalties and fines provided in this subchapter. Upon approval of the application and bond, the commissioner shall issue to the distributor a nonassignable license which shall continue in force until surrendered or revoked.
(b) The amount of the surety bonds required shall be reviewed annually in September. The minimum amount required shall be the sum of the highest two months' payment during the preceding year or $1,000.00, whichever is greater, but in no case shall it exceed $400,000.00. For new licenses, the bond amount shall be based on an estimate of the tax liability for a two-month period.
(c) The amount of the bonds as established in accordance with subsection (b) of this section shall be increased whenever the commissioner deems it necessary to protect the revenues of the state. In addition, if payments and reports are delinquent for more than 10 days for more than one reporting period in a calendar year, the bond amount shall be increased to be the sum of the tax liability for the highest four months of the year.
(d) All distributors shall submit financial statements on an annual basis. If the distributor does not wish to submit a financial statement, a bond in the amount established in accordance with subsection (c) of this section shall be required.
(e) As used in this section, the term surety bond may also include, in the discretion of the commissioner as to the best interest of the state, other good and sufficient surety instead of a bond. (Added 1985, No. 207 (Adj. Sess.), § 1; amended 1991, No. 122 (Adj. Sess.), § 1, eff. March 5, 1992; 1999, No. 154 (Adj. Sess.), § 39; 2005, No. 188 (Adj. Sess.), § 8.)