By: Ratliff S.B. No. 1035
A BILL TO BE ENTITLED
AN ACT
1-1 relating to regulation of certain motor vehicle dealers and the
1-2 sale, titling, and registration of certain motor vehicles.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Subdivision (vii), Subsection (1-A), Section (a),
1-5 Article 6686, Revised Statutes, is amended to read as follows:
1-6 (vii) In addition to other requirements provided by law, the
1-7 Department may not issue or renew a general distinguishing number
1-8 as a motor vehicle dealer or a wholesale motor vehicle auction to
1-9 an applicant until the applicant shows proof satisfactory to the
1-10 Department that the applicant has purchased a properly executed
1-11 surety bond in the amount of $50,000 <$25,000> with good and
1-12 sufficient surety approved by the Department. The bond shall be
1-13 approved as to form by the attorney general and shall be
1-14 conditioned on the applicant's payment of all valid bank drafts,
1-15 including checks, drawn by the applicant for the purchase of motor
1-16 vehicles in the applicant's transfer of good title to each motor
1-17 vehicle the applicant offers for sale. In lieu of the bond
1-18 otherwise required by this subdivision, the Department may accept
1-19 and receive the pledge of cash, a cash deposit, a certificate of
1-20 deposit, or other instrument determined by the Department to be
1-21 adequate security for the obligations of the bond. Recovery
1-22 against the bond or other security may be made by a person who
1-23 obtains a judgment against a dealer or wholesale motor vehicle
2-1 auction assessing damages and attorney's fees for an act or
2-2 omission on which the bond is conditioned if the act or omission
2-3 occurred during the term for which the general distinguishing
2-4 number will be valid. The liability imposed on the surety under
2-5 this subdivision is limited to the face amount of the bond for the
2-6 amount of the valid bank drafts, including checks, drawn by the
2-7 applicant for the purchase of motor vehicles, or the amount paid to
2-8 the applicant for the motor vehicle for which good title was not
2-9 delivered, and for attorney's fees that are reasonable in relation
2-10 to the work performed and are incurred in the recovery of a
2-11 judgment for an act or omission on which the bond was conditioned.
2-12 The surety on a bond is not liable for successive claims in excess
2-13 of the bond amount, regardless of the number of claims made against
2-14 the bond or the number of years that the bond remains in force.
2-15 The requirements of this subdivision do not apply to a person
2-16 licensed by the Texas Motor Vehicle Commission.
2-17 SECTION 2. The changes in law made by Section 1 of this Act
2-18 apply to a surety bond executed under Subdivision (vii), Subsection
2-19 (1-A), Section (a), Article 6686, Revised Statutes, on or after the
2-20 effective date of this Act, and to a surety bond that was executed
2-21 under that subdivision of that article before the effective date of
2-22 this Act except as to any claim that had accrued before the
2-23 effective date of this Act.
2-24 SECTION 3. The importance of this legislation and the
2-25 crowded condition of the calendars in both houses create an
3-1 emergency and an imperative public necessity that the
3-2 constitutional rule requiring bills to be read on three several
3-3 days in each house be suspended, and this rule is hereby suspended,
3-4 and that this Act take effect and be in force from and after its
3-5 passage, and it is so enacted.