Brief (1)
HB 2114 concerns who can recover a vehicle dealer bond. The bill would also make a retail or wholesale buyer or seller of a vehicle eligible to recover from the bond should a dealer commit an act constituting grounds for suspension or revocation of the dealer's license. The amount of the bond for new applicants would be $30,000. For current licensees, the amount would be $15,000 until the bond renewal date, at which time the bond will be $30,000. The current amount of the bond is $15,000.
The effective date of the act would be from and after January 1, 2002, and its publication in the statute book.
Background
House Committee Activity. The bill was requested by the Western Surety Company whose representative explained that a recent Kansas Supreme Court decision interpreted the law regarding who might be eligible to recover from a dealer's bond in a manner inconsistent with the Legislature's intent in enacting the law in 1989, i.e, interpreted "any person" to include a financing company. The proponent of the bill believed that the original intent was to limit recovery to natural persons.
The Kansas Automobile Dealers Association opposed the bill as drafted, but supported the bill as amended to allow recovery to more than just natural persons, i.e., to retail and wholesale buyers.
The House Committee amendments would have increased the amount of the bond, and changed the parties eligible to recover from the bond from a "consumer," as that term would have been defined, to a "retail or wholesale buyer of a vehicle." Current law makes "any person" eligible for recovery from the bond.
The Kansas Department of Revenue, Division of Vehicles, requested the amount of the bond be increased to $30,000.
Senate Committee Activity. The following conferees testified in support of the bill before the Senate Committee: Legislative Counsel, Western Surety Company; the President of Kansas Automobile Dealers Association; the President of Carlson Auction Service, Inc.; the Executive Director of the Kansas Independent Automobile Dealers Association; and the Director of the Division of Vehicles, Kansas Department of Revenue.
The Senate Committee added the word "seller" to those who could continue to make claims under the bond if a vehicle purchaser defrauds them. The provisions of the bond amount requirements were also added by the Senate Committee. The effective date of the act change to January 1, 2002, was requested by the Director of Vehicles to facilitate processing dealer bonds. The other amendments were technical.
A fiscal note was not available at the time of the Committee action.
1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/fulltext.cgi