Auto Dealer Bonds for Georgia, Tennessee and Kentucky Car Dealerships

Written by JoAnn Smith on November 15th, 2013. Posted in Georgia, Kentucky, Legislation, License and Permit Bonds, Motor Vehicle Bonds, Surety Bond Blog, Tennessee

     auto dealer bonds
A Proud southerner and his truck!
Auto dealer bonds are a part of the Deep South like fried chicken and late night used car ads on TV. Southerners love their cars so it is no surprise to see plenty of used and new car lots when heading through this part of the country. You know you are in Dixie when you drive through southern states such as Georgia, Tennessee and Kentucky and spot that Confederate flag flying over miles of great looking used cars. Some can be as distinctive as this truck, with Southern Pride flying high. But legislation has made rules for these sales, and they often include auto dealer bonds as part of the licensing. Just keep these in mind when considering any used or new car transaction in Georgia, Tennessee or Kentucky.

Georgia Auto Dealer Bond Requirements

Georgia actually has several categories within the basic car dealership business that require auto dealer bonds as part of the licensing process. Surety bond requirements for used vehicles are separate from used vehicle parts dealers. In addition they have distinct bond requirements for recreational vehicles that sell retail from those that sell wholesale or are distributors or importers. Bonds for van conversions are also covered under recreational vehicles. However, you will notice that there are no requirements for an auto dealer bond for new vehicle dealerships. The bond requirements are:
  • Used Motor Vehicle Dealers – $35,000 Used Car Dealer Bond
  • Used Motor Vehicle Parts Dealers – $10,000 Used Car Dealer Parts Bond
  • Recreational Vehicle Dealers – $10,000 Recreational Dealer Bond
  • Recreational Vehicle Manufacturers – $10,000 Recreational Dealer Bond
  • Recreational Vehicle Distributors or Importers – $10,000 Recreational Dealer Bond
  • Van Convertors – $10,000 Recreational Dealer Bond

Tennessee Car Dealer Bonds

With Georgia and Tennessee right next door to each other, it would be easy to expect that their auto bond needs would be very similar. But in fact, they are very different from each other. Where in Georgia the car dealer bond requirements are varied depending upon what kind of vehicle you are selling and how you sell it, in Tennessee they have one car bond requirement for both used and new vehicles period. If you want to sell used or new vehicles in Tennessee you will need to post a $50,000 Auto Dealer Bond with the Tennessee Motor Vehicle Commission. That is it as far as surety bond requirements go for car and truck sales in the state.

Selling Vehicles in Kentucky

If you have ever driven through the countryside of Kentucky, where some of the finest horses in America are raised, you would understand why it is called The Blue Grass State. If driving cars or trucks are more your style, then you might be happy to note that the requirements for setting up a vehicle dealership in Kentucky is much less stringent then in many other states. For both new and used vehicles, the car dealer bond requirement is for dealers to post a surety bond for $15,000.

Qualifying for an Auto Dealer Bond

Of course, for all of these states you have to qualify for an auto dealer bond before you can purchase it. If you aren’t sure what surety bond you need or if you qualify for it, we can help. BuySurety has been supplying surety bonds for used car dealerships, new car dealerships, and every kind of auto dealer bond you can name in all 50 states for years. Contact BuySurety today to find out just how easy it is to qualify and get set up with the surety bonds you need to run your business, whatever that business may be.

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Surety Bond Bill Legislature for Tennessee in 2013

Written by JoAnn Smith on February 28th, 2013. Posted in Legislation, Non-Construction Contract Performance Bonds, Performance Bonds, Surety Bond Blog, Tennessee

     surety bonds, surety bond, Tennessee surety bonds
Tellico Plains gets a new town charter
There are currently five legislative bills being reviewed in Tennessee’s House or Senate that will have an impact on the use of surety bonds in specific situations or businesses. All five bills are House bills with three of these bills having concurrent Senate bills on the same legislature. The bills primarily deal with the bonding of public officials, when in regards to the creation of a new financial system, town charter for Tellico Plains or the creation of a new marketing authority. It also includes a revision regarding the roles of many public officials. This will be causing changes to a wide number of public officials and the amount of surety bonds required for the position. In addition, there is a school bond measure being considered that will create a scholarship program for both public and non-public schools.    

Tennessee House Bill 63 – Public Officials

If passed this House bill would establish The County Financial Systems Act, a system for financial management for all counties under one system. It would create county finance departments that would each have a director. That director of the county finance department would then be required to post a $100,000 performance bond. This surety bond would be to secure the guarantee of that public official’s faithful performance of their duties as outlined in Tennessee House Bill 63. If the decision was made that the purchasing agent for the county would be someone other than the Director of the Financial Department that individual acting as the purchasing agent would also have to post this surety bond. For a complete reading of Tennessee House Bill 63, please use the link to its legislative site provided in this summary report.  

Tennessee House Bill 75/Senate Bill 540 – Public Officials

When passed House Bill 75 and Senate Bill 540 will have rewritten the town charter for the town of Tellico Plains. This revised town charter will include the stipulation that any officer, employee or agent of the town that either disburses, receives or in any way has custody of the town’s money or handles it in any matter must be bonded by the posting of a surety bond or performance bond. The town may also use a blanket bond to fulfill this stipulation and the town’s council will be charged with the approval of the bond and the sureties involved. House bill 75 has passed its second reading in the House and is currently in review with the House Local Government Committee. Concurrently, the Senate is currently reading Senate Bill 540. For a look at the complete language of Tennessee House Bill 75 as it now stands please follow the link provided for you in this bill summary.  

Tennessee House Bill 100/Senate Bill 135 – Public Officials

When passed House Bill 100 and Senate Bill 135 will make significant changes to the amount of surety bond protection required of public officials in Tennessee. The changes would affect eight distinct different public official groups in regards to their function as a caretaker for public funds. County Trustees, Emergency Communications Districts Board Members, Executive Committee Members, Employees, Officers or other Authorized Persons who receive public funds – A corporate surety bond base of $50,000 for revenues less than $50,000, with that bond amount to increase to 10% of the funds collected for revenues between $50,000 and $500,000. For revenues of $500,000 to $1 million, an increase of an additional 5% of the additional revenue must be added. Revenues of between $1-3 million will see an increased bond amount equal to 3% of this additional revenue, and revenue over $3 million increases the bond another 2% of the revenue amount that exceeds $3 million. Bond scale is cumulative for all amounts. Board Members, Policy Council Members, Employees, Officers or any Authorized Persons of a human resource agency who receive public funds – Bond amount is changed from “reasonable amount as determined” to equal to 4% of the fund collected up to a public fund amount of $3 million. For funds beyond this amount, a 2% additional amount will be added, with the scale of the surety bond amount to be cumulative. County Mayors – The bond amount would be changed from a sliding scale according to the population to a simple $100,000 surety bond for each mayor. The county legislature can require a larger amount if they deem it necessary. Sheriffs – The surety bond amount would be increased from the current $25,000 to $100,000. Registers – If the county has a population of less than 15,000 the surety bond amount would be $50,000 and if the county has a population of more than 15,000 the surety bond will go up to $100,000. County Director of Accounts and County Purchasing Agents – New surety bond amounts will be a minimum of $100,000. County Director of the Finance Department – Changes were made to require a $100,000 public official surety bond and to require a blanket bond to cover both the Director and their employees. Clerk of the Court – For counties with a population of under 15,000 a surety bond of $50,000 is required and if the population exceeds 15,000 the surety bond amount would increase to $100,000. In addition, any county official authorized to administer state-shared funds will need a $100,000 surety bond with the county legislature having authority to increase the bond amount required as they see fit. Also, blanket surety bond coverage for all county employees not covered by these individual surety bonds will need to be in place from county governments with a minimum amount of $150,000. House Bill 100 was introduced into the House on January 25, 2013 and is currently under review with the Local Government Subcommittee of the State Government Committee of Finance. To read the entire Tennessee House Bill 100 as it now stands, please feel free to use the link provided in this overview of the bill.  

Tennessee House Bill 190/Senate Bill 196 – School Bonds

The introduction of House Bill 190 and Senate Bill 196 is to create The Tennessee Choice and Opportunity Scholarship Act, a scholarship program with a school voucher measure. It will allow non-public schools to also participate providing they can demonstrate their financial viability with a surety bond. The Department of Education will determine the amount of the bond to be posted that will help them to meet the requirement for participation in the measure. This bill has passed the second reading and is currently in review with the Senate Education Committee. For a full reading of Tennessee House Bill 190 and Tennessee Senate Bill 196 please follow the provided link to a legislative website.      

Tennessee House Bill 479 – Public Officials Bonds

This bill will establish the Cumberland Regional Business and Agribusiness Marketing Authority. With the creation of this authority will be the appointment of a board of directors. This board of directors will be authorized to appoint managers, officers, employees, attornies and agents as they see fit. All of these positions will be required to post a surety bond. House Bill 479 was introduced into the House on January 30, 2013 and is currently in review with the State Government Committee’s subcommittee on Government Operations. For anyone interested in a reading of the complete Tennessee House Bill 479 as it currently stands, please be sure to follow the link we have created in this bill review.

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Surety Bond Legislature Update for Tennessee

Written by JoAnn Smith on February 12th, 2013. Posted in Commercial Bonds, Legislation, Non-Construction Contract Performance Bonds, Performance Bonds, Surety Bond Blog, Tennessee

     Tennessee surety bonds
Map of the State of Tennessee
The State of Tennessee passed three bills that dealt with the posting of surety bonds, two in the Senate and one in the House. Of the two Senate bills, one had to do with posting of surety bonds by professional employer organizations for their client’s employee unemployment premiums. The second Senate bill was an increase in the amount of a surety bond requirement for county assessors and other public officials. The singular House bill was a rewrite of the city charter for the City of Millington and included changes in the posting of fidelity surety bonds for public employees that interact with city funds.    

Senate Bill No. 2633 — Insurance Fund Surety Bonds

Tennessee’s Senate Bill 2633 will allow a client of a professional employer organization to be relieved of its liabilities for the organization’s requirements for state unemployment premiums for all client employees if the organization has posted an insurance fund surety bond of $100,000. This surety bond must be issued by a company that is licensed to issue bonds in the State of Tennessee. The insurance fund surety bond will benefit the Department of Labor and Workforce Development to collect funds when unemployment premiums are not paid and will also cover interest and penalties owed by the organization. To cancel the bond a 60-day notice would have to be delivered by the surety bond provider. The surety bond may be reduced to a minimum amount of $35,000 if all unemployment insurance premiums have been paid on a timely account for three full years; there is a reserve account in a positive amount for unemployment insurance and other certain deciding factors. Tennessee Senate Bill 2633 was enacted on May 21, 2012 and went into effect on July 01, 2012. Anyone wishing to read Senate Bill 2633 in its entirety can do so by following the link provided in this bill summary.    

Senate Bill No. 3330 — Public Officials Surety Bonds

With the enactment of Tennessee Senate Bill 3330 the public officials surety bond requirements for certain public officials including county assessors has increased from the former amount of $10,000 to $50,000. Changes were also made regarding the recording of said bonds and who would be responsible for that recording for county records. Senate Bill 3330 was enacted on May 15, 2012 and became effective immediately upon enactment. Those wishing for a reading of Tennessee Senate Bill 3330 in full can do so by using the link provided in this bill report.  

House Bill No. 3868 — Public Officials and Employees Fidelity Surety Bonds

The passing of Tennessee House Bill 3868 establishes a rewrite of the charter for the City of Millington. This bill will also create the position of city manager and require the city manager and each agent, officer and employee that in any way disburses, receives or has custody of the City of Millington’s money to post a fidelity surety bond. This bond must be issued by a surety company licensed to do business in the State of Tennessee. The amount of the surety bond will be agreed upon by ordinance of the city. Blanket bonds may be used for these surety bonds if provided by the City Board of Mayor and Alderman. The House Bill 3868 was enacted on April 27, 2012 and went into law upon enactment. Anyone wishing to read the complete Tennessee House Bill 3868 can do so by following the link provided in this bill summary.  

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Contractor Performance Bonds Vital for Towns

Written by JoAnn Smith on November 21st, 2012. Posted in Bond Applications, Contract Bonds, Indiana, New York, Performance Bonds, Surety Bond Blog, Tennessee

cost of a surety bond, performance bond
The Cost of a Surety Bond Ensures Construction
One side effect of the real estate bust has been that many towns find themselves left with unfinished residential and commercial building projects. There have been several stories in the last month or so that illustrate why the cost of a surety bond is more than worth it for any developer, particularly when it comes to residential construction. As you will see here, many towns and cities are reviewing current policies regarding the cost of a surety bond to ensure that all future infrastructure needs are met. A good example is a recent story about a coalition of New York residents regarding the filing of a performance bond for a townhouse development. In this lawsuit the disagreement revolves around whether the bond was ever issued and if the bond issued is even connected to the housing development in question. The full details of this dispute are a good illustration of the need for clarity when it comes to performance bond issues. In Spring Hill Tennessee, the bond status of all current projects is being reviewed after discovering that several bankrupt residential development projects did not have bonds posted, even though this is a requirement of the city. This may be leaving the taxpayers to cover infrastructure costs where a surety bond for performance was never posted. The city says it will be looking into why certain developers were not required to post performance bonds and will ensure that all will be doing so in the future. For a closer look at the investigation into the inconsistent requirements for performance bonds, follow our link to the entire performance bond article. A similar problem has cropped up in a small town in Indiana. The town was left to pay for completing some roadways when the performance bond connected with a local development didn’t quite cover outstanding costs on roadwork after the company went bankrupt. Now Merrillville is looking at all the outstanding bonds to be sure that they are acted on in a timely manner and that they are sufficient to cover costs for infrastructure if the developer cannot complete the project. These are just a few examples of why it is so important for a developer of any size to be sure that the performance bonds they use for the project actually meet the needs of the infrastructure they are intended to cover. The cost of a surety bond should always be directly tied to these costs to ensure proper coverage.

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