2014 -- H 7971 SUBSTITUTE A

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LC005228/SUB A

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2014

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A N   A C T

RELATING TO MOTOR AND OTHER VEHICLES - MOTOR FUEL TAX

     Introduced By: Representatives Ucci, Serpa, Fellela, Costantino, and Lima

     Date Introduced: March 20, 2014

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Section 31-36-3 of the General Laws in Chapter 31-36 entitled "Motor Fuel

Tax" is hereby amended to read as follows:

     31-36-3. Bond of a motor fuel distributor. -- (a) Before the division of taxation shall

register a distributor as provided in section §31-36-2, the distributor shall deposit with the

Division of Taxation a surety bond running to the general treasurer and in form and substance

approved by the division, in amount based upon an estimate of the average annual tax to be paid

by the distributor as set forth in subsection (b) of this section, with any surety, if any, that the

division may require, conditioned to pay any final judgment obtained against the principal named

in the bond for failure to pay any and all taxes assessed under the provisions of this chapter.

Provided, however, that any distributor that has paid all taxes assessed under this chapter for three

(3) consecutive years shall be exempt from depositing a surety bond thereafter as long as the

distributor remains in good standing. In the event a distributor fails to remain in good standing the

division shall notify the distributor of the requirement to obtain a new surety bond that must be

secured within thirty (30) days of said notice. Any distributor that fails to secure the bond as

required under this section shall forfeit its certificate of registration, provided for in § 31-36-2,

until such time as the division receives proof that the bond has been secured.

      (b)

     AVERAGE ESTIMATE OF AMOUNT OF BOND

ANNUAL TAXES

     $0 to $ 1,000,000 $250,000

     $1,000,001 to $1,500,000 $350,000

     $1,500,001 to $2,000,000 $500,000

     $2,000,001 to $ 2,500,000 $600,000

     $2,500,001 to $3,000,000 $700,000

     $3,000,001 to $5,000,000 $1,000,000

     $5,000,001 to $10,000,000 $2,000,000

     $10,000,001 to $15,000,000 $3,000,000

     $15,000,001 to $25,000,000 $4,000,000

     $25,000,001 and Over $5,000,000

     (c) In no event shall the amount of the bond in this section exceed five million dollars

($5,000,000).

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO MOTOR AND OTHER VEHICLES - MOTOR FUEL TAX

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     This act eliminates the requirement that fuel distributors post a surety bond provided the

distributor has paid all taxes assessed for a period of three (3) consecutive years and remains in

good standing with the division of taxation. If a distributor fails to remain in good standing, the

division shall notify the distributor to obtain a new surety bond to be secured within thirty (30)

days of said notice. Failure to secure bond under these circumstances, would mean forfeiture of

certificate of registration.

     This act would take effect upon passage.

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