(1) Each terminal supplier, importer, exporter, or wholesaler, except a municipality, county, school board, state agency, federal agency, or special district which is licensed under this part, shall file with the department a bond in a penal sum of not more than $100,000, such sum to be approximately 3 times the combined average monthly tax levied under this part and local option tax on motor fuel paid or due during the preceding 12 calendar months under the laws of this state. An exporter shall file a bond in an amount equal to 3 times the average monthly tax due on gallons acquired for export. The bond shall be in such form as may be approved by the department, executed by a surety company duly licensed to do business under the laws of the state as surety thereon, and conditioned upon the prompt filing of true reports and the payment to the department of any and all fuel taxes levied under this chapter including local option taxes which are now or which hereafter may be levied or imposed, together with any and all penalties and interest thereon, and generally upon faithful compliance with the provisions of the fuel tax and local option tax laws of the state. The licensee shall be the principal obligor, and the state shall be the obligee. An assigned time deposit or irrevocable letter of credit may be accepted in lieu of a surety bond.
(2) In the event that liability upon the bond thus filed with the department is discharged or reduced, whether by judgment rendered, payment made, or otherwise, or if in the opinion of the department any surety on the bond theretofore given has become unsatisfactory or unacceptable, then the department may require a new bond with satisfactory sureties in the same amount, failing which the department shall forthwith cancel the license. If such new bond is furnished as above provided, the department shall cancel and surrender the bond of the person for which such new bond is substituted.
(3) In the event that the department decides that the amount of the existing bond is insufficient to ensure payment to the state of the amount of the tax and any penalties and interest for which the person is or may at any time become liable, then that person shall forthwith, upon the written demand of the department, file additional bond in the same manner and form with like security thereon as hereinbefore provided, and the department shall forthwith cancel the license of anyone failing to file an additional bond as herein provided.
(4) Any surety on any bond furnished by a person, as above provided, shall be released and discharged from any and all liability to the state accruing on such bond after the expiration of 60 days from the date upon which such surety has filed with the department written request to be released and discharged. However, such request shall not operate to relieve, release, or discharge such surety from any liability already accrued, or which shall accrue, before the expiration of the 60-day period. The department shall, promptly on receipt of notice of such request, notify the licensee who furnished the bond, and, unless the licensee on or before the expiration of the 60-day period files with the department a new bond with a surety company satisfactory to the department in the amount and form hereinbefore in this section provided, the department shall forthwith cancel the license. If the new bond is furnished as above provided, the department shall cancel and surrender the bond of the licensee for which the new bond is provided.