(a) The application for a license under this part, or a permit under part 11 of this chapter, shall be accompanied by a bond, payable to the state of Tennessee, in the penal amount determined under subsection (b). The bond shall be void if the applicant pays to the commissioner all taxes and fees on petroleum products under this chapter, together with interest and penalties on the taxes and fees that accrue against the applicant.
Terms Used In Tennessee Code 67-3-609
Commissioner: means the commissioner of revenue or the commissioner's designated subordinate official. See Tennessee Code 67-3-103
In this state: means the area inside the boundaries of Tennessee, but does not include the midstream of waterways that border the state. See Tennessee Code 67-3-103
Lien: A claim against real or personal property in satisfaction of a debt.
Person: means a natural person, partnership, firm, association, corporation, limited liability company, court appointed representative, state, political subdivision or any other entity, group, or syndicate. See Tennessee Code 67-3-103
Petroleum products: means all benzol, gasoline, burning oil, distillate, fuel oil, gas oil, kerosene, naphtha, or any other volatile substance, excluding propane, reflecting a gravity of sixteen degrees (16°. See Tennessee Code 67-3-103
Record: means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in a perceivable form. See Tennessee Code 1-3-105
signed: includes a mark, the name being written near the mark and witnessed, or any other symbol or methodology executed or adopted by a party with intention to authenticate a writing or record, regardless of being witnessed. See Tennessee Code 1-3-105
Trustee: A person or institution holding and administering property in trust.
(b) The penal amount of the bond shall be not less than the greater of one thousand dollars ($1,000) or three (3) times the amount of the tax required to be paid monthly by the person. The monthly amount shall be determined by averaging the tax over a period of six (6) months immediately preceding the execution of the bond. If a person has not been in business for a period of six (6) months, the penal amount of the bond shall be determined on the average monthly tax during the actual time the person has been engaged in business or on the estimated average monthly tax; however, the bond shall not be less than fifty thousand dollars ($50,000). The commissioner may, at any time, require an increase in the penal amount of the bond, if the commissioner deems such increase necessary to safeguard the revenues of the state, but in no event shall the bond exceed the sum of one million dollars ($1,000,000).(c) A person required to execute more than one (1) bond, whether required in order to become a licensee or to be eligible for an exemption or refund under part 4 of this chapter, may combine the total amount of each of the bonds into a single bond, which shall be conditioned upon payment of all petroleum products taxes, fees, penalties and interest that may accrue against the person. The penal amount of any combination bond shall be determined in the manner provided in subsection (b), but shall in no case be less than three thousand dollars ($3,000) nor more than two million dollars ($2,000,000).(d) Licensees who seek exemption or refunds under part 4 of this chapter and who do not accrue liability as suppliers and/or importers, instead of the provisions set out in subsection (b), shall post a minimum bond of one thousand dollars ($1,000). The commissioner may, at any time, require additional bond if the commissioner deems such bond necessary to safeguard the revenues of the state. In no event shall the bond exceed the sum of one million dollars ($1,000,000).(e) If the required maximum penal amount of the bond in subsection (b) exceeds one hundred thousand dollars ($100,000) or if the required maximum penal amount of the bond in subsection (c) exceeds two hundred thousand dollars ($200,000), the commissioner may agree to reduce the penal amount of a bond, if the commissioner determines that any potential tax liability is otherwise adequately secured or protected, or if the commissioner determines that the past good filing and payment record of the taxpayer indicates that lowering the penal amount of the bond would not result in a substantially increased risk of loss to the state. The required maximum penal amount of the bond in subsection (b) may not, however, be reduced to an amount less than one hundred thousand dollars ($100,000), and the required maximum penal amount of the bond in subsection (c) may not be reduced to an amount less than two hundred thousand dollars ($200,000).(f) The bond may be a corporate surety bond or a personal surety bond; and, in either event, it shall be signed by the applicant as principal. If a corporate surety bond is executed, it shall be signed as surety by an authorized surety company licensed to do business in this state.(g) Instead of a personal or corporate surety on such bond required in subsection (a), the commissioner may allow the applicant to secure such bond by depositing collateral in the form of a certificate of deposit, or equivalent to a certificate of deposit, as accepted and authorized by the banking laws of Tennessee, that has a face value equal to the amount of the bond. Such collateral may be deposited with any authorized state depository designated by the commissioner.(h) An applicant may execute a bond with personal surety approved by the commissioner. The personal surety or sureties shall own real estate within the state, free and unencumbered, and with the assessed value equal to three (3) times the amount of the average monthly tax payment. The bond shall be registered in the register’s office of the county in which the property is located, and the taxpayer shall be liable for all registration fees. The state shall have a lien against the property superior to all other liens attaching after the registration, which may be enforced by levy on the property of the taxpayer and the taxpayer’s surety, and by sale of the property as now provided by law. A personal surety bond shall be executed on forms furnished by the commissioner and shall contain a sworn certificate of the county trustee showing the assessed valuation of the real estate and that all ad valorem taxes on it are paid. In the event the property is located within an incorporated town or city, the information shall also be furnished by sworn certificate of the proper municipal official. The bond shall also contain an abstract of title of the real estate described in the instrument, showing the exact status of title to the property for the preceding ten (10) years, and the abstract of title shall be signed and sworn to by the county register.
