73R6217 T
          By Hilderbran                                         H.B. No. 1932
                                 A BILL TO BE ENTITLED
    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.  Amend Art. 6686(a)(1-A), Revised Civil Statutes,
    1-7  by deleting paragraph (vii) and inserting the following:
    1-8        (vii)  In addition to other requirements provided by law, the
    1-9  Department may not issue or renew a general distinguishing number
   1-10  as a motor vehicle dealer or a wholesale motor vehicle auction to
   1-11  an applicant until the applicant shows proof satisfactory to the
   1-12  Department that the applicant has purchased a properly executed
   1-13  surety bond in the amount of $25,000 with good and sufficient
   1-14  surety approved by the Department.  The bond shall be approved as
   1-15  to form by the attorney general and shall be conditioned on the
   1-16  applicant's payment of all valid bank drafts, including checks,
   1-17  drawn by the applicant for the purchase of motor vehicles in the
   1-18  applicant's transfer of good title to each motor vehicle the
   1-19  applicant offers for sale.  In lieu of the bond otherwise required
   1-20  by this subdivision, the Department may accept and receive the
   1-21  pledge of cash, a cash deposit, a certificate of deposit, or other
   1-22  instrument determined by the Department to be adequate security for
   1-23  the obligations of the bond.  Recovery against the bond or other
    2-1  security may be made by a person who obtains a judgment against a
    2-2  dealer or wholesale motor vehicle auction assessing damages and
    2-3  reasonable attorneys' fees for an act or omission on which the bond
    2-4  is conditioned if the act or omission occurred during the term for
    2-5  which the general distinguishing number will be valid.  The
    2-6  liability imposed on the surety under this section is limited to
    2-7  the face amount of the bond for the amount of the valid bank
    2-8  drafts, including checks, drawn by the applicant for the purchase
    2-9  of motor vehicles or the amount paid to the applicant for the motor
   2-10  vehicle for which good title was not delivered, and for attorney's
   2-11  fees which are reasonable in relation to the work performed and
   2-12  which are incurred in the recovery of a judgment for an act or
   2-13  omission on which the bond was conditioned.  The surety on a bond
   2-14  shall not be liable for successive claims in excess of the bond
   2-15  amount, regardless of the number of claims made against the bond or
   2-16  the number of years the bond remains in force.  The requirements of
   2-17  this subdivision do not apply to a person licensed by the Texas
   2-18  Motor Vehicle Commission.
   2-19        SECTION 2.  This Act applies to any surety bond executed
   2-20  under Art. 6686(a)(1-A(vii), Revised Civil Statutes, on or after
   2-21  the 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.