KRS § 138.330 — KY Code / Title XI / Chapter 138 / Section 138.330
138.330 Dealer's and transporter's financial instrument
Status: in_force

138.330 Dealer's and transporter's financial instrument.

(1) (a) Every dealer or transporter required to be licensed under KRS 138.310 shall

file with the department 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.

(b) The financial instrument shall be on a form and with a surety approved by the

department.

(c) The dealer or transporter shall be the principal obligor and the state the

obligee.

(d) 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 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.

(2) 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.

(3) 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.

(4) 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 financial instrument is

substituted.