Chapter 52 Oregon Laws 2003

AN ACT

HB 2211

Relating to motor vehicle fuel dealer bonds; creating new provisions; amending ORS 319.050 and 319.060; and repealing section 12a, chapter 769, Oregon Laws 1999.

Be It Enacted by the People of the State of Oregon:

SECTION 1. ORS 319.050 is amended to read:

319.050. (1) At the time of filing the certificate and application for a dealer’s license, the Department of Transportation [must] shall require the dealer to file with the department, in [such] a form [as shall be] prepared by the department, a bond [duly] executed by the dealer as principal with a corporate surety authorized to transact business in this state. The bond shall be payable to the State of Oregon conditioned upon [faithful] performance of all the requirements of ORS 319.010 to 319.430 [and 319.990 (1) to (3)], including the payment of all taxes, penalties and other obligations of the dealer [,] arising out of ORS 319.010 to 319.430 [and 319.990 (1) to (3)].

[(2) The total amount of the bond or bonds required of any dealer shall be fixed by the department and may be increased or reduced by the department at any time subject to the limitations provided in this section. The total amount of the bond or bonds required of any dealer shall be equivalent to twice the estimated monthly license tax, determined in the manner the department deems proper. However, except as provided in subsection (3) of this section, the total amount of the bond or bonds required of any dealer shall never be less than $1,000 nor more than $100,000.]

[(3) The total amount of the bond or bonds required of persons described in this subsection shall never be less than $1,000 nor more than $250,000. This subsection applies to the following:]

[(a) A person who first applies for a dealer’s license.]

[(b) A person who has not faithfully performed, as determined by the department, for the last three years, the requirements of ORS 319.010 to 319.430 and 319.990 (1) to (3), as required by subsection (1) of this section. If the department determines that the person has not faithfully performed the requirements, and that the lack of faithful performance was due to reasonable cause and was without any intent to avoid payment, the department may waive the additional bond requirement imposed under this subsection.]

(2) Except as provided in sections 3, 4 and 5 of this 2003 Act, a bond under subsection (1) of this section shall be in an amount that is equivalent to twice the dealer’s estimated monthly license tax, as determined by the department, or $250,000, whichever is less.

(3) The department may reduce or increase the required amount for a bond as provided in sections 3 and 4 of this 2003 Act.

(4) [Any] A bond given in connection with ORS 319.010 to 319.430 [shall be] is a continuing instrument and [shall cover] covers any and all periods of time including the first and all subsequent periods for which a license may be granted in consequence of the giving of the bond. The liability of the surety on the bond for the aggregate of all claims [which] that arise [thereunder shall] under the bond may not exceed the amount of the penalty of the bond. No recoveries on any bond or any execution of any new bond [shall] may invalidate any bond, but the total recoveries under any one bond [shall] may not exceed the amount of the bond.

(5) A dealer required under this section to obtain a bond may demand by proper petition a hearing on the necessity of [such] the bond or the reasonableness of the amount required. [A hearing shall be granted and held] The department shall grant the petition for a hearing and shall hold the hearing within 10 days after the demand [therefor] for the hearing. The decision of the department [shall become] becomes final 10 days after service of the order on the dealer. The hearing is not subject to the requirements of ORS 183.413 to 183.470.

SECTION 2. Sections 3, 4 and 5 of this 2003 Act are added to and made a part of ORS 319.010 to 319.430.

SECTION 3. (1) For a dealer described in subsection (2) of this section, the bond required by the Department of Transportation under ORS 319.050 shall be in an amount that is equivalent to twice the dealer’s estimated monthly license tax, as determined by the department, or $100,000, whichever is less.

(2) The provisions of subsection (1) of this section apply to a dealer who held a valid dealer’s license on October 23, 1999, issued under ORS 319.010 to 319.430, and who, since October 23, 1999, has:

(a) Not been required to file a bond greater than $100,000; and

(b) Performed, as determined by the department, the requirements of ORS 319.010 to 319.430, including the payment of all taxes, penalties and other obligations of the dealer arising out of ORS 319.010 to 319.430.

SECTION 4. (1) The Department of Transportation shall increase a dealer’s bond filed under ORS 319.050 to an amount that is equivalent to twice the dealer’s estimated monthly license tax, as determined by the department, or $1 million, whichever is less, if, within a 24-month period, the dealer:

(a) Was late three or more times in filing reports or making payments to the department;

(b) Had three or more checks or electronic funds transfers to the department dishonored for lack of funds or credit;

(c) Failed to maintain or make available a record of all purchases, receipts, sales and distribution of motor vehicle fuel as required under ORS 319.390; or

(d) Had a motor vehicle fuel dealer license issued in this state or another jurisdiction revoked.

(2) The department may waive an increase in the bond amount under subsection (1) of this section if the department determines that the dealer did not intend to avoid payment of license taxes when the dealer engaged in the conduct described in subsection (1)(a), (b) or (c) of this section or when the dealer engaged in the conduct that led to the license revocation described in subsection (1)(d) of this section. If the department waives an increase in the bond amount, the bond shall remain at an amount that is:

(a) Required under section 3 of this 2003 Act for a dealer described in section 3 of this 2003 Act; or

(b) Required under ORS 319.050.

(3) If the department increases the bond amount as provided in subsection (1) of this section, the dealer may, after 24 months, request in writing that the department reduce the bond amount. The department shall reduce the bond amount if the department determines that the dealer, in the 24 months prior to the dealer’s written request:

(a) Filed timely reports and made timely payments;

(b) Had no checks or electronic funds transfers to the department dishonored for lack of funds or credit;

(c) Maintained and made available a record of all purchases, receipts, sales and distribution of motor vehicle fuel as required under ORS 319.390; and

(d) Did not have a motor vehicle fuel dealer license issued in this state or another jurisdiction revoked.

(4) If the department determines that the dealer met all of the requirements under subsection (3) of this section, the department shall reduce the bond required of a dealer described in ORS 319.050 or a dealer described in section 3 of this 2003 Act to an amount that is equivalent to twice the dealer’s estimated monthly license tax, as determined by the department, or $250,000, whichever is less.

(5) If the department determines that the dealer failed to meet the requirements under subsection (3) of this section and that the failure was not due to the dealer’s intent to avoid payment of license taxes, the department may reduce the bond required of a dealer described in ORS 319.050 or a dealer described in section 3 of this 2003 Act to an amount that is equivalent to twice the dealer’s estimated monthly license tax, as determined by the department, or $250,000, whichever is less.

(6) For purposes of this section, the department shall adopt rules establishing what constitutes evidence that a dealer did not intend to avoid payment of license taxes.

SECTION 5. If the amount that is equivalent to twice the amount of a dealer’s estimated monthly license tax, as determined by the Department of Transportation, is an amount that is less than $1,000, the bond amount required by ORS 319.050 or section 3 or 4 of this 2003 Act shall be $1,000.

SECTION 6. Section 12a, chapter 769, Oregon Laws 1999, is repealed.

SECTION 7. ORS 319.060 is amended to read:

319.060. In lieu of the bond or bonds in total amount as fixed under ORS 319.050 or section 3, 4 or 5 of this 2003 Act, any dealer may deposit with the State Treasurer, under such terms and conditions as the Department of Transportation may prescribe, a like amount of lawful money of the United States or bonds or other obligations of the United States, the State of Oregon, or any county of this state, of an actual market value not less than the amount so fixed by the department.

Approved by the Governor April 2, 2003

Filed in the office of Secretary of State April 2, 2003

Effective date January 1, 2004

__________