S.B. 37

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House Committee Amendments 2-3-2005 dd/sch

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Senate Committee Amendments 1-20-2005 rd/sch This document includes Senate Committee Amendments incorporated into the bill on Thu, Jan 20, 2005 at 11:38 AM by rday. --> This document includes House Committee Amendments incorporated into the bill on Thu, Feb 3, 2005 at 11:25 AM by ddonat. --> 1

MOTOR VEHICLE BUSINESS REGULATION
2 ACT AMENDMENTS
3 2005 GENERAL SESSION
4 STATE OF UTAH
5 Sponsor: Dan R. Eastman
6
7 LONG TITLE
8 General Description:
9 This bill modifies the Motor Vehicle Business Regulation Act by amending provisions
10 related to bond requirements for certain dealer, crusher, or body shop licenses.
11 Highlighted Provisions:
12 This bill:
13 . increases the bond amount for a motor vehicle dealer's license from $50,000 to
14 $75,000 H. [ until June 30, 2010 ] beginning on July 1, 2006 .H ;
15 . increases the bond amount for a special equipment dealer's license from $20,000 to
16 $75,000 H. [ until June 30, 2010 ] beginning on July 1, 2006 .H ;
17 . increases the bond amount for a motorcycle, off-highway vehicle, or small trailer's
18 or crusher's license from $1,000 to $10,000;
19 . increases the bond amount for a body shop's license from $10,000 to $20,000;
20 H. [ . provides that beginning on July 1, 2010, the bond amount for a motor vehicle
21 dealer's license or a special equipment dealer's license is $100,000; ] .H
22 . repeals a provision that requires that the bond for certain licenses be conditioned on
23 the dealer doing business without violating certain prohibitions;
24 . provides that the bond for certain licenses shall be conditioned on the dealer doing
25 business without violating the provision that requires a dealer to submit or deliver a
26 certificate of title or manufacturer's certificate of origin; S [ and ]
26a . PROVIDES THAT THE SURETY OR PRINCIPAL OF A BOND SHALL NOTIFY THE
26b ADMINISTRATOR OF THE MOTOR VEHICLE ENFORCEMENT DIVISION IF A CLAIM ON THE BOND IS
26c SUCCESSFULLY PROSECUTED OR SETTLED AGAINST THE SURETY OR THE PRINCIPAL; AND s

27 . makes technical changes.

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House Committee Amendments 2-3-2005 dd/sch 28

Monies Appropriated in this Bill:
29 None
30 Other Special Clauses:
31 H. [ None ] This bill takes effect July 1, 2005. .H
32 Utah Code Sections Affected:
33 AMENDS:
34 41-3-205, as last amended by Chapter 157, Laws of Utah 2003
35
36 Be it enacted by the Legislature of the state of Utah:
37 Section 1. Section 41-3-205 is amended to read:
38 41-3-205. Licenses -- Bonds required -- Maximum liability -- Action against
39 surety -- Loss of bond.
40 (1) (a) Before a dealer's, special equipment dealer's, crusher's, or body shop's license is
41 issued, the applicant shall file with the administrator a corporate surety bond in the amount of:
42 (i) H. [ [ ] $50,000 [ ] ] [ $75,000 ] .H until June 30, H. [ 2010 ] 2006 .H , and
42a H.[ $100,000 ] $75,000 .H on or after July 1, H. [ 2010 ] 2006 .H , for a
43 motor vehicle dealer's license;
44 (ii) H. [ [ ] $20,000 [ ] ] [ $75,000 ] .H until June 30, H. [ 2010 ] 2006 .H , and
44a H. [ $100,000 ] $75,000 .H on or after July 1, H. [ 2010 ] 2006 .H , for a
45 special equipment dealer's license;
46 (iii) [$1,000] $10,000 for a motorcycle, off-highway vehicle, or small trailer dealer's or
47 crusher's license; or
48 (iv) [$10,000] $20,000 for a body shop's license.
49 (b) The corporate surety shall be licensed to do business within the state and have a
50 rating of at least B+ by the A.M. Best Company.
51 (c) The form of the bond:
52 (i) shall be approved by the attorney general;
53 (ii) shall be conditioned upon the applicant's conducting business as a dealer without:
54 (A) fraud[,];
55 (B) fraudulent representation[, or without violating Section 41-3-210 ; and]; or
56 (C) violating Subsection 41-3-301 (1) which requires a dealer to submit or deliver a
57 certificate of title or manufacturer's certificate of origin; and
58 (iii) may be continuous in form.

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House Committee Amendments 2-3-2005 dd/sch

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Senate Committee Amendments 1-20-2005 rd/sch 59

(d) The total aggregate liability on the bond to all persons making claims, regardless of
60 the number of claimants or the number of years a bond remains in force, may not exceed the
61 amount of the bond.
62 (2) S (a) s A cause of action under Subsection (1) may not be maintained against a surety
63 unless:
64 S [ (a) ] (i) s a claim is filed in writing with the administrator within one year after the cause of
65 action arose; and
66 S [ (b) ] (ii) s the action is commenced within two years after the claim was filed with the
67 administrator.
67a S (b) THE SURETY OR PRINCIPAL SHALL NOTIFY THE ADMINISTRATOR IF A CLAIM ON THE BOND
67b IS SUCCESSFULLY PROSECUTED OR SETTLED AGAINST THE SURETY OR PRINCIPAL. s
68 (3) A person making a claim on the bond shall be awarded attorneys' fees in cases
69 successfully prosecuted or settled against the surety or principal if the bond has not been
70 depleted.
71 (4) (a) (i) If a dealer, body shop, or crusher loses possession of the bond required by
72 this chapter, the dealer, body shop, or crusher license is automatically suspended.
73 (ii) All licenses, pocket cards, temporary permits, and special plates issued to the
74 licensee shall be immediately returned to the administrator.
75 (b) A dealer, body shop, or crusher may not continue to use or permit to be used
76 licenses, pocket cards, temporary permits, or special plates until the required bond is on file
77 with the administrator and the license has been reinstated.
78 (5) A representative or consignee of a dealer is not required to file a bond if the dealer
79 for whom the representative or consignee acts fully complies with the provisions of this
80 chapter.
80a H. Section 2. Effective date.
80b This bill takes effect July 1, 2005. .H

Legislative Review Note
as of 12-28-04 10:09 AM

Based on a limited legal review, this legislation has not been determined to have a high
probability of being held unconstitutional.

Office of Legislative Research and General Counsel