54:39-129 Deposits in lieu of bonds.
29. a. In lieu of any of the bonds required by P.L.2010, c.22 (C.54:39-101 et al.), a licensee may deposit with the director cash, a certificate of deposit or an irrevocable letter of credit. If the applicant files a bond or letter of credit it shall:
(1) Be with a surety company or bank approved by the director which may be an affiliate in the business of assuring such obligations;
(2) Name the applicant as the principal obligor and the State as the obligee; and
(3) Be on forms prescribed by the director.
b. The director may, at the discretion of the director, require a licensee or an applicant to furnish current verified financial statements. The director may make independent inquiry into the financial condition of the applicant and, in any case, shall not be required to accept as accurate financial statements which have not been certified or independently audited. If the director determines that the financial condition of a licensee warrants an increase in the bond, the director may require the licensee to furnish an increased bond.
c. The director may require a licensee to file a new bond with a satisfactory surety in the same form and amount if:
(1) Liability upon the previous bond is discharged or reduced by a judgment rendered, payment made, or otherwise disposed of; or
(2) In the opinion of the director, any surety on the previous bond becomes unsatisfactory. If the new bond is unsatisfactory, the director shall cancel the license. If the new bond is satisfactorily furnished, the director shall release in writing the surety on the previous bond from any liability accruing after the effective date of the new bond.
d. If a licensee has cash, a certificate of deposit or a letter of credit with the director and it is reduced by a judgment rendered, payment made, or otherwise disposed of, the director may require the licensee to make a new deposit equal to the amount of the reduction.
e. If the director determines that the amount of the existing bond is insufficient to ensure payment to the State of the tax, fee, and any penalty and interest for which a licensee is or may become liable, the licensee shall, upon written demand of the director, file a new or increased bond. The director shall allow the licensee at least 30 days to secure the increased bond or cash deposit.
f. A new or increased bond shall meet the requirements set forth in P.L.2010, c.22 (C.54:39-101 et al.); if the new or increased bond required pursuant to this section is unsatisfactory, the director shall cancel the license.
g. Sixty days after making a written request for release to the director, the surety of a bond furnished by a licensee shall be released from any liability to the State accruing on the bond after the 60-day period. The release shall not affect any liability accruing before the expiration of the sixty-day period.
h. The director shall promptly notify the licensee furnishing the bond that a release has been requested. Unless the licensee obtains a new bond that meets the requirements of P.L.2010, c.22 (C.54:39-101 et al.) and files with the director the new bond within the sixty-day period, the director shall cancel the license.
i. Sixty days after the licensee makes a written request for release to the director, the cash deposit, letter of credit or certificate of deposit provided by a licensee shall be cancelled as security for any obligation accruing after the expiration of the sixty-day period. However, the director may retain all or part of the bond for up to three years and one day as security for any obligations accruing before the effective date of the cancellation. Any part not retained by the director shall be released to the licensee. Before the expiration of the 60-day period, the licensee shall provide the director with a bond that satisfies the requirements of P.L.2010, c.22 (C.54:39-101 et al.) or the director shall cancel the license.
L.2010, c.22, s.29.