The Alabama Department of Revenue (AL DOR) requires public sellers and fleet producers of Compressed Natural Gas (CNG) and/or Liquified Natural Gas (LNG) to file a Natural Gas Bond as a requisite of the mandated CNG/LNG license.
Jet Insurance Company provides the Natural Gas Bond as a tool to reassure the AL DOR that public sellers or fleet producers will follow the conditions of their license, in addition to the associated state tax legislation. The surety bond also serves as a financial guarantee to ensure that the state will receive payment for natural gas taxes.
Whether you are applying for the first time or renewing a CNG/LNG license, the Jet team can help you secure the required Natural Gas Bond quickly and at an affordable rate!
The Natural Gas Bond has a custom limit that must be approved by the Alabama Department of Revenue. The amount must be at least $25,000 or approximately twice the average monthly tax liability of the licensee. Whichever amount is greater will be the bond limit.
With Jet, the Natural Gas Bond starts at $250 annually or $25 monthly. Our rates are only a small percentage of the bond limit and will vary based on the bond limit and your personal credit score. Refer to the chart below to view Jet’s rates for different bond limits and terms at a preferred credit tier.
The Jet team believes in providing affordable surety bonds to the natural gas industry, which is why we offer both annual and monthly payment options.
The Alabama Department of Revenue implemented the licensing requirement of the Natural Gas Bond (formally referred to as the Compressed Natural Gas/Liquified Natural Gas Bond) in January of 2018 because of a rising trend in faulty tax payments from CNG/LNG disbursements. The Natural Gas Bond assures the AL DOR that public sellers and fleet producers will fulfill their license obligations, and if they fail to do so, the surety provider (Jet) will cover all CNG/LNG taxes and additional fees due to the AL DOR.
Our team at Jet has created a quick and simple process for our bond applications, making it easier to get your Natural Gas Bond. The online application will ask for general information such as the required bond limit, your business name, and your personal social security number. For an approved rate, a soft credit check will be completed swiftly — don't worry, this won't affect your current credit score! Once a Jet rate is provided, just choose a bond term and complete payment. Jet will take care of the rest for you!
Jet makes it easy and can file the bond for you! The Alabama Department of Revenue requires the original signed and sealed Natural Gas Bond to be filed with the Business and License Tax Division. Photocopies and signature stamps are not accepted.
If you would like to send in the bond yourself (perhaps with your CNG/LNG license application), you can select that option at checkout. The original signed bond form and any additional paperwork must be mailed to the following address.
Alabama Department of Revenue
Business and License Tax Division
Motor Fuels Section
PO Box 327540
Montgomery, AL 36132-7540
You can cancel your bond at any time with Jet! Just send us a written cancellation request (an email to firstname.lastname@example.org will do), and we will proceed with filing the bond termination notice to the Alabama Department of Revenue. Once received, liability of the bond will be released by the AL DOR within 30 days.
Regarding refunds, the Jet team will review your bond after the 30-day cancellation period has ended and will refund any premium available for reimbursement. Monthly payment bondholders are required to continue payment during the 30-day liability period as the bond is still active. Once cancellation is complete, payments will cease.
With Jet’s monthly payment option, there is no need to worry about renewing your Natural Gas Bond! Payments will continue to come out of your preferred account until cancellation of the bond is officially requested and the additional 30 days of coverage have been completed.
For those who choose the annual or multi-year bond term payment option, the Jet team will send you a renewal invoice well in advance of the bond term’s expiration date. We only require the renewal payment; no additional paperwork or fees will be asked of you.
Alabama public sellers and fleet producers of compressed or liquified natural gas are expected to follow all of the rules and regulations of Alabama Legislature, Title 40, Chapter 17, Article 3B as they pertain to their license. Failure to uphold these requirements can lead to the Alabama Department of Revenue inflicting fines of $5,000 per a violation, license suspension, permanent termination of licensure status, misdemeanor charges, and/or the pursuance of a claim on the Natural Gas Bond.
Under the CNG/LNG license, public sellers and fleet producers are required to produce a report of their monthly CNG/LNG disbursement for motor vehicle use, as well as a report of their total disbursements of CNG/LNG to licensed exempt entities, and the payment of monthly taxes due for such disbursements. All of these requirements must be submitted to the AL DOR by the 20th of each month. If the public seller or fleet producer has not submitted payment or reports within 30 days of the original due date, the AL DOR will send a warning letter with a chance to resolve the issue through immediate payment of all taxes due. If the public seller or fleet producer is unable to or simply chooses not to resolve the issue, an official claim will be filed on their Natural Gas Tax Bond.
The Jet team strongly recommends you to try and resolve this issue before such severe measures are taken and a loss of license ensues.
Immediately contact Jet if you receive a claim notifice on your Natural Gas Bond! Once contacted, a Jet team member will brief you on how our surety bond claim process works and will ask for any available information pertaining to your claim, so be ready to have all those details in hand. A review of the provided documentation and a Jet investigation into the claims validity will then proceed.
If the claim is found to be true, Jet Insurance Company is legally obligated to make payment up to the bond limit. You (the licensee) are ultimately held responsible for your actions and must reimburse Jet for the paid out claim. Failure to fulfill this obligation will lead to future difficulties securing a surety bond, specifically the Natural Gas Bond, which is required to qualify for and maintain a CNG/LNG license in Alabama.