H.B. No. 1932 1-1 AN ACT 1-2 relating to the bond or other security required for issuance or 1-3 renewal of a general distinguishing number as a motor vehicle 1-4 dealer or a wholesale motor vehicle auction. 1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-6 SECTION 1. Article 6686(a)(1-A)(vii), Revised Statutes, is 1-7 amended to read as follows: 1-8 (vii) In addition to other requirements provided 1-9 by law, the Department may not issue or renew a general 1-10 distinguishing number as a motor vehicle dealer or a wholesale 1-11 motor vehicle auction to an applicant until the applicant shows 1-12 proof satisfactory to the Department that the applicant has 1-13 purchased a properly executed surety bond in the amount of $25,000 1-14 with good and sufficient surety approved by the Department. The 1-15 bond shall be approved as to form by the attorney general and shall 1-16 be conditioned on the applicant's payment of all valid bank drafts, 1-17 including checks, drawn by the applicant for the purchase of motor 1-18 vehicles in the applicant's transfer of good title to each motor 1-19 vehicle the applicant offers for sale. In lieu of the bond 1-20 otherwise required by this subdivision, the Department may accept 1-21 and receive the pledge of cash, a cash deposit, a certificate of 1-22 deposit, or other instrument determined by the Department to be 1-23 adequate security for the obligations of the bond. Recovery 2-1 against the bond or other security may be made by a person who 2-2 obtains a judgment against a dealer or wholesale motor vehicle 2-3 auction assessing damages and reasonable attorney's fees for an act 2-4 or omission on which the bond is conditioned if the act or omission 2-5 occurred during the term for which the general distinguishing 2-6 number will be valid. The liability imposed on the surety under 2-7 this section is limited to the face amount of the bond for the 2-8 amount of the valid bank drafts, including checks, drawn by the 2-9 applicant for the purchase of motor vehicles or the amount paid to 2-10 the applicant for the motor vehicle for which good title was not 2-11 delivered, and for attorney's fees which are reasonable in relation 2-12 to the work performed and which are incurred in the recovery of a 2-13 judgment for an act or omission on which the bond was conditioned. 2-14 The surety on a bond shall not be liable for successive claims in 2-15 excess of the bond amount, regardless of the number of claims made 2-16 against the bond or the number of years the bond remains in force. 2-17 The requirements of this subdivision do not apply to a person 2-18 licensed by the Texas Motor Vehicle Commission. 2-19 SECTION 2. This Act applies to any surety bond executed 2-20 under Article 6686(a)(1-A)(vii), Revised Statutes, on or after the 2-21 effective date of this Act. This Act also applies to all such 2-22 surety bonds executed prior to the effective date of this Act 2-23 except as to claims that have accrued prior to the effective date 2-24 of this Act. 2-25 SECTION 3. The importance of this legislation and the 3-1 crowded condition of the calendars in both houses create an 3-2 emergency and an imperative public necessity that the 3-3 constitutional rule requiring bills to be read on three several 3-4 days in each house be suspended, and this rule is hereby suspended, 3-5 and that this Act take effect and be in force from and after its 3-6 passage, and it is so enacted.