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.