By: Hilderbran H.B. No. 1932 73R6217 T 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.