§ 44-20-412 — Bond of licensee

(1) To be issued a wholesaler's license,
powersports vehicle dealer's license, or used powersports vehicle dealer's license,
an applicant must procure and file with the board evidence of a savings account,
deposit, or certificate of deposit meeting the requirements of section 11-35-101 or a
good and sufficient bond with a corporate surety duly licensed to do business
within the state, approved as to form by the attorney general, and conditioned that
the applicant not practice fraud or violate any of the provisions of this part 4
related to fraud or any rule promulgated by the board under this part 4 related to
fraud. A powersports vehicle dealer or used powersports vehicle dealer need not
furnish an additional bond, savings account, deposit, or certificate of deposit under
this section if the dealer furnishes a bond, savings account, deposit, or certificate of
deposit under section 44-20-112.

(2) (a) The purpose of the bond procured by the applicant in accordance with
subsection (1) of this section and section 44-20-413 is to provide for the
reimbursement for any loss or damage suffered by any retail consumer caused by
fraud or by a violation of this part 4 related to fraud by a wholesaler, powersports
vehicle dealer, or used powersports vehicle dealer. For a wholesale transaction, the
bond is available to each party to the transaction; except that, if a retail consumer
is involved, the consumer has priority to recover from the bond. The amount of the
bond must be fifty thousand dollars for each wholesaler applicant, powersports
vehicle dealer applicant, and used powersports vehicle dealer applicant. The
aggregate liability of the surety for all transactions does not exceed the amount of
the bond, regardless of the number of claims or claimants.

(b) No corporate surety is required to make a payment to any person making
a claim under the bond until a final determination of fraud has been made by the
board or by a court of competent jurisdiction.

(3) Bonds required pursuant to this section shall be renewed annually when
the bondholder's license is renewed. Bonds may be renewed through a continuation
certificate issued by the surety.

(4) Nothing in this part 4 shall interfere with the authority of the courts to
administer and conduct an interpleader action for claims against a licensee's bond.

Legislative History

Source: L. 2018: Entire article added with relocations, (SB 18-030), ch. 7, p. 108, � 2, effective October 1. L. 2020: (1) and (2) amended, (SB 20-140), ch. 225, p. 1104, � 5, effective September 14.