§ 105-449.72. Bond or letter of credit required as a condition of obtaining and keeping certain licenses or of applying for certain refunds. - North Carolina Statutes

§ 105‑449.72.  Bond orletter of credit required as a condition of obtaining and keeping certainlicenses or of applying for certain refunds.

(a)        Initial Bond. – Anapplicant for a license as a refiner, a terminal operator, a supplier, animporter, a blender, a permissive supplier, or a distributor must file with theSecretary a bond or an irrevocable letter of credit. A bond or an irrevocableletter of credit must be conditioned upon compliance with the requirements ofthis Article, be payable to the State, and be in the form required by theSecretary. The amount of the bond or irrevocable letter of credit is determinedas follows:

(1)        For an applicant fora license as any of the following, the amount is two million dollars($2,000,000):

a.         A refiner.

b.         A terminal operator.

c.         A supplier that is aposition holder or a person that receives motor fuel pursuant to a two‑partyexchange.

d.         A bonded importer.

e.         A permissivesupplier.

(2)        For an applicant fora license as any of the following, the amount is two times the applicant'saverage expected monthly tax liability under this Article, as determined by theSecretary. The amount may not be less than two thousand dollars ($2,000) andmay not be more than five hundred thousand dollars ($500,000):

a.         Repealed by SessionLaws 2007‑527, s. 17(a), effective October 1, 2007.

b.         An occasionalimporter.

c.         A tank wagonimporter.

d.         A distributor.

e.         Repealed by SessionLaws 1997‑60, s. 5, effective October 5, 1997.

(3)        For an applicant fora license as any of the following, a bond is required only if the applicant'saverage expected annual tax liability under this Article, as determined by theSecretary, is at least two thousand dollars ($2,000). When a bond is required,the bond amount is the same as under subdivision (2) of this subsection.

a.         A blender.

b.         A supplier that is afuel alcohol provider or a biodiesel provider but is neither a position holdernor a person that receives motor fuel pursuant to a two‑party exchange.

(b)        Multiple Activity.– An applicant for a license as a distributor and as a bonded importer mustfile only the bond required of a bonded importer. An applicant for two or moreof the licenses listed in subdivision (a)(2) or (a)(3) of this section may fileone bond that covers the combined liabilities of the applicant under all theactivities. A bond for these combined activities may not exceed the maximumamount set in subdivision (a)(2) of this subsection.

(c)        Adjustment to Bond.– When notified to do so by the Secretary, a person that has filed a bond or anirrevocable letter of credit and that holds a license listed in subdivision(a)(2) of this section must file an additional bond or irrevocable letter ofcredit in the amount requested by the Secretary. The person must file theadditional bond or irrevocable letter of credit within 30 days after receivingthe notice from the Secretary. The amount of the initial bond or irrevocableletter of credit and any additional bond or irrevocable letter of credit filedby the license holder, however, may not exceed the limits set in subdivision(a)(2) of this section.

(d)        Replacements. – Whena license holder files a bond or an irrevocable letter of credit as areplacement for a previously filed bond or letter of credit and the licenseholder has paid all taxes and penalties due under this Article, the Secretarymust take one of the following actions:

(1)        Return thepreviously filed bond or letter of credit.

(2)        Notify the personliable on the previously filed bond that the person is released from liability onthe bond.

(e)        Credit CardCompanies. – The Secretary may require a credit card company to file with theSecretary a bond if the company applies for a refund under G.S. 105‑449.105(a)and the Secretary determines after an audit that a bond is needed to protectthe State from loss in collecting any additional tax due pursuant to the audit.The bond must be conditioned upon compliance with the requirements of thisArticle, be payable to the State, and be in the form required by the Secretary.The amount of a bond required under this subsection is two times the averagemonthly refund due, subject to the minimum and maximum amounts provided insubdivision (a)(2) of this section.

(f)         Exemption. – Therequirement to obtain a bond or an irrevocable letter of credit does not applyto a distributor, an importer, or a motor fuel transporter who supplies motorfuel when the market for motor fuel is disrupted and emergency supplies areneeded, as identified by an executive order of the Governor.  (1995, c. 390, s. 3; 1995(Reg. Sess., 1996), c. 647, s. 10; 1997‑60, s. 5; 1998‑146, s. 4;2001‑205, s. 5; 2002‑108, ss. 7, 8; 2003‑349, s. 10.6; 2004‑170,s. 28; 2007‑527, s. 17(a); 2009‑445, s. 33.)