(1) Gasoline, special fuel, or aviation fuel distributors must furnish the department of transportation a corporate surety bond executed by the distributor as principal with a corporate surety authorized to transact business in this state or other collateral security or indemnity. The total amount of bond or collateral security or indemnity must be equivalent to twice the distributor's estimated monthly gasoline, special fuel, or aviation fuel tax, in no case greater than $100,000, except as provided in (3) . The department will establish the bond amount on a distributor with less than 12 months prior history.

(2) The department may require a distributor to post an additional bond not to exceed twice the distributor's estimated monthly gasoline, special fuel, or aviation fuel tax who has in the previous 12 month period:

(a) been delinquent for more than 10 days for more than one reporting period;

(b) has given the state a non-sufficient fund check and whose non-sufficient fund check was returned in result of a bank error more than twice;

(c) whose filing was returned for inadequate postage more than twice; or

(d) the department's review indicates that the required distributor's records are inadequate.

(3) Upon written application by a distributor and the showing of good cause, the department may, at its discretion, accept a bond, collateral security, or indemnity in an amount less than twice the distributor's estimated monthly gasoline, special fuel, or aviation fuel tax if the distributor reports and pays its tax more frequently than monthly. For example, if the distributor pays his tax weekly, his bond would be the estimated weekly tax payment.