Sec. 417.5. Licensing of importing transporters

Tax Law, § 283-a

(a)

(1) The Department of Taxation and Finance, upon application of a person who or which has the use or control or the right to use or control any means of transportation used to transport motor fuel being imported into the State for use, distribution, storage or sale in the State, may license such person as an importing transporter. No person, unless so licensed, may transport motor fuel in the State where such fuel is being so imported. An application for a license as an importing transporter must be made on a form prescribed by the Department of Taxation and Finance for such purpose and must fully disclose all of the information requested therein.

(2)

(i) An importing transporter must immediately inform the Department of Taxation and Finance, in writing, of any change in its address. Additionally, an importing transporter which is a corporation or a partnership must immediately inform the department, in writing, of any changes in such transporter's officers, directors or partners or any changes in such persons' addresses as shown in the transporter's application for a license.

(ii) When shares of stock are acquired by any person such that an importing transporter which had four or fewer shareholders owning or controlling, directly or indirectly, the voting stock of such importing transporter upon such acquisition has more than four shareholders so owning or controlling such stock, the importing transporter must immediately file a notification of such acquisitions with the department. However, if in any such acquisitions, a person not previously owning or controlling, directly or indirectly, more than 10 percent of the shares of voting stock of such importing transporter acquires shares of stock such that the person owns or controls, directly or indirectly, more than 10 percent of the shares of voting stock of such importing transporter, such acquisition is a transfer of license subject to the provisions of section 417.7 of this Part.

(b)

(1) Before any person may be licensed as an importing transporter with the Department of Taxation and Finance, and at all times after the person is licensed as an importing transporter, such person is required to file or deposit and maintain with the department: (i) a performance bond executed by a surety company which is (a) authorized to transact business in this State, (b) registered with and under the supervision of the Insurance Department of New York State, and (c) approved by the Superintendent of Insurance as to solvency and responsibility; or (ii) such other acceptable security enumerated in section 411.3 of this Title (provided, however, in applying such section “distributor” shall be read as “importing transporter”). Such bond or security is to secure that the licensee will properly perform the duties and responsibilities of an importing transporter as required pursuant to article 12-A of the Tax Law, and pursuant to articles 28 and 29 of the Tax Law with respect to motor fuel and rules and regulations promulgated thereunder and that such licensee will not suffer or permit any violations of such provisions of the Tax Law or rules or regulations or give cause for the cancellation or suspension of his license. In the case of an importing transporter a bond to the people of the State of New York, or acceptable security, in the penal sum of $2,000 must be filed or deposited. Provided, however, if an applicant for a license is also registered as a distributor of motor fuel and if the department believes that a possible revocation of the registration as a distributor is sanction enough to secure compliance with the Tax Law and rules and regulations adopted thereunder, the department may dispense with the requirement that a bond or security be filed or deposited in respect of its activities as an importing transporter.

(2) If the licensee fails to perform the duties and responsibilities of an importing transporter required pursuant to article 12-A and articles 28 and 29 and the rules or regulations relating thereto with respect to motor fuel or suffers or permits any violations of such provisions of the Tax Law or rules or regulations or gives cause for cancellation or suspension of its license, the department may proceed to cancel or suspend such license by the issuance of a notice of nonperformance or cause for cancellation or suspension. Such notice must specify the violation or violations or grounds for cancellation or suspension. The notice will be served in the same manner as a notice of proposed cancellation under section 283(6) of the Tax Law (see section 411.7 of this Title) and all the provisions of such section 283(6) with respect to a notice of proposed cancellation are applicable to a notice of nonperformance or cause for cancellation or suspension, including opportunity for a hearing and time limits with respect thereto, with such modification as may be necessary to adapt the language of such provision to the notice hereunder.

(c)

(1) Where a person files an application for a license as an importing transporter, the Department of Taxation and Finance in circumstances described herein, may refuse to license such applicant and deny such application, without a prior hearing, pursuant to the provisions of this subdivision.

(2) Definitions. For purposes of this subdivision:

(i) A shareholder of the applicant shall mean only those shareholders of a corporate applicant who directly or indirectly own more than 10 percent of the number of shares of stock of such applicant entitling the shareholder to vote for the election of the applicant's directors or trustees. In the case of a corporate applicant which at the relevant time has four or fewer shareholders entitled to vote for the election of directors or trustees, in lieu of the more than 10 percent threshold prescribed herein, a direct or indirect ownership of 25 percent or more of the voting stock shall apply.

(ii) An employee of the applicant shall mean only those employees of an applicant who are under a duty to file a return under or pursuant to the authority of article 12-A of the Tax Law, or pay the taxes imposed by or pursuant to the authority of such article on behalf of the applicant.

(3) The department may refuse to license the applicant if any tax imposed under the Tax Law or by any law, ordinance or resolution enacted pursuant to the authority of such law or the city earnings tax on nonresidents imposed pursuant to the authority of article two-E of the General City Law has been finally determined to be due from the applicant, or from any officer, director or partner of such applicant, or from any shareholder of the applicant or employee of the applicant and such tax has not been paid in full.

(4) The department may refuse to license the applicant if a liability for the penalty provided for in section 289-b(2) of the Tax Law (see section 416.2 of this Title) has been finally determined to be due from an officer, director, employee or partner of such applicant or from a shareholder of the applicant and such penalty has not been paid in full.

(5)

(i) The department may refuse to license the applicant if the applicant, or an officer, director or partner of such applicant, or a shareholder of the applicant or employee of the applicant, has been convicted within the preceding five years of a crime provided for in the Tax Law.

(ii) A license may also be denied the applicant, if such applicant's employee was, in the capacity as a person under a duty to file a return under or pursuant to the authority of article 12-A of the Tax Law or pay the taxes imposed by or pursuant to the authority of such article on behalf of any person, convicted within the preceding five years of a crime provided for in the Tax Law.

(6) The department may refuse to license the applicant if a license as an importing transporter of the applicant, or of an officer, director or partner of such applicant, or of a shareholder of the applicant or employee of the applicant, has been cancelled or suspended as described in section 417.6 of this Part within the preceding five years.

(7) The department may refuse to license the applicant if the applicant, or an officer, director or partner of such applicant, or a shareholder of the applicant or employee of the applicant:

(i) was:

(a) an officer, director or partner of another person;

(b) a direct or indirect shareholder of more than 10 percent of the number of shares of another person, where such other person is a corporation, entitling the shareholder to vote for the election of directors or trustees (25 percent or more shall apply in the case of another entity which at the relevant time had four or fewer shareholders entitled to so vote); or

(c) an employee of another person, under a duty to file a return under or pursuant to the authority of article 12-A of the Tax Law, or pay the taxes imposed by or pursuant to the authority of such article on behalf of such other person;

(ii) at a time when:

(a) any tax imposed under the Tax Law or by any law, ordinance or resolution enacted pursuant to the authority of such law or the city earnings tax on nonresidents imposed pursuant to the authority of article two-E of the General City Law was finally determined to be due from such other person and where such tax has not been paid in full;

(b) such other person was convicted of a crime provided for in the Tax Law, but only if such conviction occurred within the preceding five years; or

(c) the license as an importing transporter of such other person was cancelled or suspended as provided in section 417.6 of this Part, but only if such cancellation or suspension occurred within the preceding five years.

Provided, however, where the applicant or such officer, director, partner, shareholder or employee of such applicant was only an employee of another person:

(iii) the department's examination of the tax payment history of such other person shall be limited to the taxes imposed by article 12-A of the Tax Law, or by or pursuant to articles 28 and 29 of such law in respect to motor fuel; and

(iv) the department's examination of prior criminal convictions shall be limited to those which relate to motor fuel.

(8) The department may refuse to license the applicant if the applicant or an officer, director or partner of such applicant, or a shareholder of the applicant or employee of the applicant, has within the preceding five years committed any of the acts specified in section 417.6 of this Part.

(9) The department may, in its discretion, license an applicant upon such terms and conditions as it may deem necessary in protection of the revenues under articles 12-A, 28 and 29 of the Tax Law.