Assembly Bill No. 417–Assemblymen Atkinson, Buckley, Horne, Parks, Ohrenschall, Claborn, Collins, Goicoechea, Knecht, Koivisto, Leslie, Manendo, Oceguera, Pierce and Williams

 

March 17, 2003

____________

 

Referred to Committee on Transportation

 

SUMMARY—Establishes procedures for claims against bonds and deposits of certain persons licensed by Department of Motor Vehicles. (BDR 43‑1077)

 

FISCAL NOTE:  Effect on Local Government: No.

                           Effect on the State: No.

 

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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

AN ACT relating to motor vehicles; establishing procedures for claims against bonds and deposits of dealers, distributors, manufacturers, rebuilders, representatives and salesmen licensed by the Department of Motor Vehicles; giving claims filed by consumers priority over other claims; providing under certain circumstances for payment of claims on a pro rata basis; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

1-1  Section 1. Chapter 482 of NRS is hereby amended by adding

1-2  thereto a new section to read as follows:

1-3  1.  A person injured by the action of a dealer, distributor,

1-4  manufacturer, rebuilder, representative or salesman in violation

1-5  of any provision of this chapter may file a claim with the Director.

1-6  A person is not required to reduce the claim to a judgment before

1-7  filing a claim with the Director.

1-8  2.  The Director shall consider any claim that is filed within

1-9  the applicable statute of limitations. If the claim is upon a bond,

1-10  the Director shall not order payment on the bond until 2 years

2-1  after the expiration of the bond. Two years after the expiration of

2-2  the bond, the Director shall order the surety to pay all approved

2-3  claims.

2-4  3.  A claim filed by a consumer is a preferred claim. If any

2-5  bond or deposit is insufficient to pay all consumer claims in full,

2-6  the Director shall distribute or direct the surety to distribute the

2-7  compensation among all consumer claimants in proportion to the

2-8  amounts of their respective claims. Partial payment of claims is

2-9  not full payment, and the claimants may bring actions against the

2-10  dealer, distributor, manufacturer, rebuilder, representative or

2-11  salesman for the unpaid balances.

2-12      4.  Claims, other than claims filed by consumers, have equal

2-13  priority, except where otherwise provided by law, and if, after

2-14  paying all claims filed by consumers, the bond or deposit is

2-15  insufficient to pay all remaining claims in full, they must be paid

2-16  pro rata. Partial payment of claims is not full payment, and the

2-17  claimants may bring actions against the dealer, distributor,

2-18  manufacturer, rebuilder, representative or salesman for the

2-19  unpaid balances.

2-20      5.  An approved claim draws interest at a rate determined

2-21  pursuant to NRS 17.130 from the date of its approval until the

2-22  claim is paid. If the amount of an approved claim is reduced by the

2-23  Director before payment, interest is paid only on the reduced

2-24  amount.

2-25      6.  The remedy provided in this section does not preclude a

2-26  person from bringing an action on a bond filed pursuant to NRS

2-27  482.345 or a deposit made pursuant to NRS 482.346, or otherwise

2-28  limit any rights or remedies the person may have pursuant to any

2-29  other law or agreement.

2-30      7.  As used in this section, “claim” means an application to

2-31  the Director for compensation in the form of:

2-32      (a) Payment from a bond pursuant to NRS 482.345; or

2-33      (b) Disbursement from a deposit pursuant to NRS 482.346.

2-34      Sec. 2.  NRS 482.3161 is hereby amended to read as follows:

2-35      482.3161  1.  A person shall not operate as a vehicle

2-36  transporter in this state without a license issued by the Department.

2-37      2.  The provisions of NRS 482.316 to 482.3175, inclusive, do

2-38  not apply to a manufacturer, distributor, dealer, broker or rebuilder

2-39  licensed pursuant to the provisions of NRS 482.318 to 482.363,

2-40  inclusive[.] , and section 1 of this act.

2-41      Sec. 3.  NRS 482.345 is hereby amended to read as follows:

2-42      482.345  1.  Except as otherwise provided in subsection 6,

2-43  before any dealer’s license, dealer’s plate, special dealer’s plate,

2-44  rebuilder’s license or rebuilder’s plate, distributor’s license or

2-45  distributor’s plate or manufacturer’s license or manufacturer’s plate

3-1  is furnished to a manufacturer, distributor, dealer or rebuilder as

3-2  provided in this chapter, the Department [shall] must require that the

3-3  applicant make an application for such a license and plate upon a

3-4  form to be furnished by the Department, and the applicant [shall]

3-5  must furnish such information as the Department requires, including

3-6  proof that the applicant has an established place of business in this

3-7  state, and also, except as otherwise provided in subsection 2,

3-8  procure and file with the Department a good and sufficient bond in

3-9  the amount of $50,000 with a corporate surety thereon, duly

3-10  licensed to do business within the State of Nevada, approved as to

3-11  form by the Attorney General, and conditioned that the applicant

3-12  shall conduct his business as a dealer, distributor, manufacturer or

3-13  rebuilder without breaching a consumer contract or engaging in a

3-14  deceptive trade practice, fraud or fraudulent representation, and

3-15  without violation of the provisions of this chapter. The Department

3-16  may, by agreement with any dealer, distributor, manufacturer or

3-17  rebuilder who has been in business for 5 years or more, allow a

3-18  reduction in the amount of the bond of the dealer, if his business has

3-19  been conducted satisfactorily for the preceding 5 years, but no bond

3-20  may be in an amount less than $5,000.

3-21      2.  A manufacturer, distributor, rebuilder or dealer who

3-22  manufactures, distributes or sells only motorcycles, horse trailers,

3-23  tent trailers, utility trailers or trailers designed to carry boats shall

3-24  file a bond as required by subsection 1 in the amount of $5,000

3-25  regardless of the length of time he has been in business.

3-26      3.  The bond must be continuous in form, and the total

3-27  aggregate liability on the bond must be limited to the payment of the

3-28  total amount of the bond.

3-29      4.  The undertaking on the bond includes any breach of a

3-30  consumer contract, deceptive trade practice, fraud, fraudulent

3-31  representation or violation of any of the provisions of this chapter by

3-32  the representative of any licensed distributor or the salesman of any

3-33  licensed dealer, manufacturer or rebuilder who acts for the dealer,

3-34  distributor, manufacturer or rebuilder on his behalf and within the

3-35  scope of the employment of the representative or the salesman.

3-36      5.  The bond must provide that any person injured by the action

3-37  of the dealer, distributor, rebuilder, manufacturer, representative or

3-38  salesman in violation of any provisions of this chapter may bring an

3-39  action on the bond against the surety in a court of competent

3-40  jurisdiction or apply to the Director, for good cause shown and after

3-41  notice and opportunity for hearing, for compensation from the bond

3-42  [. The Director may determine the amount of compensation and the

3-43  person to whom it is to be paid. The surety shall then make the

3-44  payment.] pursuant to section 1 of this act.

4-1  6.  The provisions of this section do not apply to a manufacturer

4-2  without an established place of business in this state.

4-3  Sec. 4.  NRS 482.346 is hereby amended to read as follows:

4-4  482.346  1.  In lieu of a bond, an applicant may deposit with

4-5  the Department, under terms prescribed by the Department:

4-6  (a) A like amount of lawful money of the United States or bonds

4-7  of the United States or of the State of Nevada of an actual market

4-8  value of not less than the amount fixed by the Department; or

4-9  (b) A savings certificate of a bank, credit union or savings and

4-10  loan association situated in Nevada, which must indicate an account

4-11  of an amount equal to the amount of the bond which would

4-12  otherwise be required by NRS 482.345 and that this amount is

4-13  unavailable for withdrawal except upon order of the Department.

4-14  Interest earned on the amount accrues to the account of the

4-15  applicant.

4-16      2.  A deposit made pursuant to subsection 1 may be disbursed

4-17  by the Director[,] pursuant to section 1 of this act, for good cause

4-18  shown and after notice and opportunity for hearing, in an amount

4-19  determined by him to compensate a person injured by an action of

4-20  the licensee, or released upon receipt of:

4-21      (a) A court order requiring the Director to release all or a

4-22  specified portion of the deposit; or

4-23      (b) A statement signed by the person or persons under whose

4-24  name the deposit is made and acknowledged before any person

4-25  authorized to take acknowledgments in this state, requesting the

4-26  Director to release the deposit, or a specified portion thereof, and

4-27  stating the purpose for which the release is requested.

4-28      3.  When a deposit is made pursuant to subsection 1, liability

4-29  under the deposit is in the amount prescribed by the Department. If

4-30  the amount of the deposit is reduced or there is an outstanding court

4-31  judgment for which the licensee is liable under the deposit, the

4-32  license is automatically suspended. The license must be reinstated if

4-33  the licensee:

4-34      (a) Files an additional bond pursuant to subsection 1 of

4-35  NRS 482.345;

4-36      (b) Restores the deposit with the Department to the original

4-37  amount required under this section; or

4-38      (c) Satisfies the outstanding judgment for which he is liable

4-39  under the deposit.

4-40      4.  A deposit made pursuant to subsection 1 may be refunded:

4-41      (a) By order of the Director, 3 years after the date the licensee

4-42  ceases to be licensed by the Department, if the Director is satisfied

4-43  that there are no outstanding claims against the deposit; or

4-44      (b) By order of court, at any time within 3 years after the date

4-45  the licensee ceases to be licensed by the Department, upon evidence

5-1  satisfactory to the court that there are no outstanding claims against

5-2  the deposit.

5-3  5.  Any money received by the Department pursuant to

5-4  subsection 1 must be deposited with the State Treasurer for credit to

5-5  the Motor Vehicle Fund.

 

5-6  H