(1) Before any motor vehicle dealer's, wholesaler's, wholesale motor vehicle auction dealer's, business disposal, or used motor vehicle dealer's license is issued by the board through the executive director to an applicant, the 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 corporate surety duly licensed to do business within the state, approved as to form by the attorney general of the state, and conditioned that the applicant must not practice fraud or violate any provision of this part 1 related to fraud that is designated by the board by rule in conducting the business for which the applicant is licensed. A motor vehicle dealer, business disposer, or used motor 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 44-20-412. (2) (a) The purpose of the bond procured by the applicant in accordance with subsection (1) of this section and section 44-20-114 (1) is to provide for the reimbursement for any loss or damage suffered by any retail consumer caused by fraud or a violation of this part 1 related to fraud by a motor vehicle dealer, used motor vehicle dealer, wholesale motor vehicle auction dealer, business disposer, or wholesaler. 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 a motor vehicle dealer applicant, used motor vehicle dealer applicant, wholesale motor vehicle auction dealer applicant, business disposal applicant, or wholesaler applicant; except that the amount of the bond must be five thousand dollars for those dealers who sell only small utility trailers that weigh less than two thousand pounds. The aggregate liability of the surety for all transactions is limited to the amount of the bond, regardless of the number of claims or claimants. (b) No corporate surety shall be required to make any payment to any person claiming under the bond until a final determination of fraud has been made by the board or by a court of competent jurisdiction. (3) All bonds required pursuant to this section shall be renewed annually at such time as the bondholder's license is renewed. The renewal may be done through a continuation certificate issued by the surety. (4) Nothing in this part 1 shall interfere with the authority of the courts to administer and conduct an interpleader action for claims against a licensee's bond.
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