S-340                 _______________________________________________

                                                   SENATE BILL NO. 5706

                        _______________________________________________

State of Washington                              50th Legislature                              1987 Regular Session

By Senators Metcalf, Patterson and Bender

Read first time 2/6/87 and referred to Committee on Transportation.

AN ACT Relating to vehicle dealer licensing; and amending RCW 46.70.070.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

        Sec. 1.  Section 46.70.070, chapter 12,  Laws of 1961 as last amended by section 11, chapter  241, Laws of 1986 and RCW 46.70.070 are each amended to read as follows:

          (1) Before issuing a vehicle dealer's license, the  department shall require the applicant to file with the department a surety bond or, at the dealer's option, deposit in an escrow account, money or government securities in the amount of:

          (a) Fifteen thousand dollars for motor vehicle dealers;

          (b) Thirty thousand dollars for mobile home and travel trailer dealers:  PROVIDED, That if such dealer does not deal in mobile homes such bond, or amount deposited in an escrow account, shall be fifteen thousand dollars;

          (c) Five thousand dollars for miscellaneous dealers,

running to the state, and executed by a surety company authorized to do business in the state or deposited in a depository designated by the department running to the benefit of the state.  Such bond or escrow account shall be approved by the attorney general as to form and conditioned that the dealer shall conduct his business in conformity with the provisions of this chapter;

          (d) Wholesale dealers shall not be required to file a surety bond with the department or make a deposit in an escrow account running to the state.

          Any retail purchaser who shall have suffered any loss or damage by reason of breach of warranty or by any act by a dealer which constitutes a violation of this chapter shall have the right to institute an action for recovery against such dealer, the escrow account, and the surety upon such bond.  Successive recoveries against said bond, or escrow account, shall be permitted, but the aggregate liability of the surety of a bond to all persons shall in no event exceed the amount of the bond.  Upon exhaustion of the penalty of said bond, exhaustion or termination of the escrow account, or cancellation of the bond by the surety, the vehicle dealer license shall  automatically be deemed canceled.

          (2) The bond or amount deposited in an escrow account for any vehicle dealer licensed or to be licensed under more than one classification shall be the amount of the highest bond required for  any such classification.

          (3) Vehicle dealers shall maintain a bond, or an escrow account, for each business location in this state and bond or escrow account coverage for all temporary subagencies.

(4) The income from an escrow account may be distributed currently to the vehicle dealer.