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.