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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 until June 30, 2010;
15 . increases the bond amount for a special equipment dealer's license from $20,000 to
16 $75,000 until June 30, 2010;
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 . 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;
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; and
27 . makes technical changes.
28 Monies Appropriated in this Bill:
30 Other Special Clauses:
32 Utah Code Sections Affected:
34 41-3-205, as last amended by Chapter 157, Laws of Utah 2003
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) [
43 motor vehicle dealer's license;
44 (ii) [
45 special equipment dealer's license;
46 (iii) [
47 crusher's license; or
48 (iv) [
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[
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.
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) A cause of action under Subsection (1) may not be maintained against a surety
64 (a) a claim is filed in writing with the administrator within one year after the cause of
65 action arose; and
66 (b) the action is commenced within two years after the claim was filed with the
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
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
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
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