Current through Register Vol. 42, No. 11, August 30, 2024
(1) Sections
40-12-398,
40-12-414,
40-12-448,
and
32-8-34,
Code of Ala. 1975, require motor vehicle dealers,
automotive dismantler and parts recyclers, licensed wholesale auctions,
designated agents, and title service providers to execute and deliver to the
department a continuing surety bond. The surety bond must be executed by a
surety company authorized to do business in Alabama. The amount of the surety
bond is fifty thousand dollars ($50,000).
(2) The properly completed surety bond
includes, but is not limited to the following information:
(a) Legal name of business and trade name or
DBA (if applicable) and mailing address.
(b) The city, county and state in which the
business is located.
(c) Name(s)
and signature(s) of representative(s) of business authorized to execute surety
bond on behalf of the business.
(d)
The name and address of the surety company providing the coverage.
(e) The effective date.
(f) The issue date of the bond.
(g) The signature of an agent of the surety
company,
(h) A telephone number for
the surety company.
(3)
The following requirements must be met in order for the bond to be accepted by
the department:
(a) The bond must be in its
original form and not altered or recreated.
(b) The bond must be accompanied by a power
of attorney form, indicating that the agent is authorized to execute the bond
on behalf of the surety company.
(c) The bond and power of attorney must have
the same issue date.
(d) The bond
must be signed by the applicant.
(e) The bond must be payable to the Alabama
Department of Revenue.
(f) In lieu
of handprinted names and signatures, an electronic signature is acceptable if
authorized by the department. An electronic signature is an electronic sound,
symbol, or process attached to or logically associated with a document and
executed or adopted by a person with the intent to sign the document.
(4) The coverage period begins on
the issuance date of the applicable license. The department must be notified of
any change in the status of the bond.
(5) If a notice of cancellation is received
from the surety company and a new bond is not provided prior to the date of
cancellation, the license and/or designated agent status will be revoked
immediately, and the licensee or designated agent must submit a new surety bond
to be reinstated.
(6) Claimant
Procedures for Making a Bond Claim. The following procedures must be followed
for making a bond claim with the department:
(a) A claimant must first secure a final
judgment from a court of competent jurisdiction.
(b) A claimant must exhaust all available
remedies in attempting to collect the judgment, prior to making a bond claim
with the department.
(c) A claimant
must submit the following items to the department:
1. A complaint relating to the violation of
the conditions of a contract made in connection with the sale or exchange of a
motor vehicle; or the violation of any provision of law relating to the conduct
of the business of a motor vehicle dealer, automotive dismantler and parts
recycler, wholesale auction, designated agent, or title service
provider.
2. A final judgment
relating to the complaint in subparagraph (a) above. The certificate or any
documents must be signed by the judge.
3. A description of efforts made to enforce
the judgment; along with a statement of all amounts recovered, or a statement
that no amount has been recovered.
(d) Upon receipt of the required documents,
the department will determine if the motor vehicle dealer, automotive
dismantler and parts recycler, wholesale auction, designated agent, or title
service provider has violated the provisions of Title 40, Chapter 12, Article
8, 9, or 10 or Title 32, Chapter 8.
(e) If additional information is required,
the claimant will be contacted.
(7) Filing of Bond Claim with Surety Company.
If determined that a violation has occurred, the department shall file a claim
with the surety company of record. The maximum amount of the claim filed cannot
exceed the value of the bond.
(a) Upon receipt
of the claim, the surety company has thirty (30) days to remit the payment or
request an extension to further investigate the claim.
(b) The surety company may request additional
information from the claimant to substantiate the claim.
(c) Upon determination that the claim is
valid, the surety company must remit payment to the department.
(d) Upon receipt of payment from the surety
company, the department will remit payment to the claimant.
(e) If the surety company fails to respond by
the deadline, the claim will be forwarded to the department's legal division
for further action.
(8)
The total amount of all bond claims made against a single bond must not exceed
$50,000. Once the bond claim limit of $50,000 has been reached, no further
claims will be allowed against the bond.
(9) Pursuant to §
40-12-398,
Code of Ala. 1975, a tax liability incurred under
Chapter 23 of Title 40 for the sale of a motor vehicle may also be assessed
against the bond. Such assessment must only be made when the tax liability
under Chapter 23 of Title 40 is no longer subject to appeal.
Authors: Don Clemons, Mike Gamble, Tammy
Fuller
Statutory Authority:
Code of Ala.
1975, §§
40-2A-7(a)(5),
40-12-392,
40-12-398,
40-12-448.
