House Status:
Senate Status:
Senate Status:
Minutes for SB99 - Committee on Transportation
Short Title
Increasing the bond amount required for a vehicle dealer license.
Minutes Content for Thu, Feb 11, 2021
Chairperson Petersen opened the hearing on SB99.
Mr. Siebers summarized the bill by saying that the bill increases the current bonding requirement for used and new motor vehicle dealers from $30,000 to $50,000 (Attachment 3).
Ms. Phelps, speaking as a proponent, noted that the current $30,000 bond requirement has remained static since the 1980s, even though the prices for vehicles have increased significantly (Attachment 4). She explained that the bonds are in place for the benefit of wronged retail consumers; a court judgment is required to access the bond funds.
Don McNeely, President, Kansas Automobile Dealers Association, testified in support of the bill (Attachment 5). He noted that the average retail sales price of a new vehicle is now $38,000, the average price of a used vehicle is $21,000, and the average surety bond amount for licensure nationally is $50,000, making the present bill an appropriate update.
Ms. Phelps and Mr. McNeely responded to members' questions:
- The present surety bond cost to a dealer is $150. The bill would raise the cost of the bond to $250.
- A single bond per dealer is intended to address varied issues related to a customer's loss.
- The bond is most often used by used-car dealers for lower dollar amounts.
- A court judgment is the basis for awarding damages. If the damages exceed the bond, the court apportions payments as it deems appropriate.
- The proposed $50,000 bond will cover the majority of cases.
The Chairperson closed the hearing on SB99.
