S.B. 37 Enrolled

MOTOR VEHICLE BUSINESS REGULATION
ACT AMENDMENTS
2005 GENERAL SESSION
STATE OF UTAH
Sponsor: Dan R. Eastman

LONG TITLE
General Description:
This bill modifies the Motor Vehicle Business Regulation Act by amending provisions
related to bond requirements for certain dealer, crusher, or body shop licenses.
Highlighted Provisions:
This bill:
. increases the bond amount for a motor vehicle dealer's license from $50,000 to
$75,000 beginning on July 1, 2006;
. increases the bond amount for a special equipment dealer's license from $20,000 to
$75,000 beginning on July 1, 2006;
. increases the bond amount for a motorcycle, off-highway vehicle, or small trailer's
or crusher's license from $1,000 to $10,000;
. increases the bond amount for a body shop's license from $10,000 to $20,000;
. repeals a provision that requires that the bond for certain licenses be conditioned on
the dealer doing business without violating certain prohibitions;
. provides that the bond for certain licenses shall be conditioned on the dealer doing
business without violating the provision that requires a dealer to submit or deliver a
certificate of title or manufacturer's certificate of origin;
. provides that the surety or principal of a bond shall notify the administrator of the
Motor Vehicle Enforcement Division if a claim on the bond is successfully
prosecuted or settled against the surety or the principal; and
. makes technical changes.
Monies Appropriated in this Bill:

None
Other Special Clauses:
This bill takes effect on July 1, 2005.
Utah Code Sections Affected:
AMENDS:
41-3-205, as last amended by Chapter 157, Laws of Utah 2003

Be it enacted by the Legislature of the state of Utah:
Section 1. Section 41-3-205 is amended to read:
41-3-205. Licenses -- Bonds required -- Maximum liability -- Action against surety
-- Loss of bond.
(1) (a) Before a dealer's, special equipment dealer's, crusher's, or body shop's license is
issued, the applicant shall file with the administrator a corporate surety bond in the amount of:
(i) $50,000 until June 30, 2006, and $75,000 on or after July 1, 2006, for a motor vehicle
dealer's license;
(ii) $20,000 until June 30, 2006, and $75,000 on or after July 1, 2006, for a special
equipment dealer's license;
(iii) [$1,000] $10,000 for a motorcycle, off-highway vehicle, or small trailer dealer's or
crusher's license; or
(iv) [$10,000] $20,000 for a body shop's license.
(b) The corporate surety shall be licensed to do business within the state and have a
rating of at least B+ by the A.M. Best Company.
(c) The form of the bond:
(i) shall be approved by the attorney general;
(ii) shall be conditioned upon the applicant's conducting business as a dealer without:
(A) fraud[,];
(B) fraudulent representation[, or without violating Section 41-3-210 ; and]; or
(C) violating Subsection 41-3-301 (1) which requires a dealer to submit or deliver a

certificate of title or manufacturer's certificate of origin; and
(iii) may be continuous in form.
(d) The total aggregate liability on the bond to all persons making claims, regardless of
the number of claimants or the number of years a bond remains in force, may not exceed the
amount of the bond.
(2) (a) A cause of action under Subsection (1) may not be maintained against a surety
unless:
[(a)] (i) a claim is filed in writing with the administrator within one year after the cause
of action arose; and
[(b)] (ii) the action is commenced within two years after the claim was filed with the
administrator.
(b) The surety or principal shall notify the administrator if a claim on the bond is
successfully prosecuted or settled against the surety or principal.
(3) A person making a claim on the bond shall be awarded attorneys' fees in cases
successfully prosecuted or settled against the surety or principal if the bond has not been
depleted.
(4) (a) (i) If a dealer, body shop, or crusher loses possession of the bond required by this
chapter, the dealer, body shop, or crusher license is automatically suspended.
(ii) All licenses, pocket cards, temporary permits, and special plates issued to the licensee
shall be immediately returned to the administrator.
(b) A dealer, body shop, or crusher may not continue to use or permit to be used
licenses, pocket cards, temporary permits, or special plates until the required bond is on file with
the administrator and the license has been reinstated.
(5) A representative or consignee of a dealer is not required to file a bond if the dealer for
whom the representative or consignee acts fully complies with the provisions of this chapter.
Section 2. Effective date.
This bill takes effect on July 1, 2005.