(a) Any municipality may, by ordinance, regulate the operation and use, including hours and zones of use, of snowmobiles and all-terrain vehicles in a manner not inconsistent with the provisions of this section and sections 14-379 to 14-389, inclusive, or any regulations adopted pursuant thereto, and may (1) prescribe a penalty for violation of such ordinance in an amount not to exceed one thousand dollars for a first violation, in an amount not to exceed one thousand five hundred dollars for a second violation, and in an amount not to exceed two thousand dollars for a third or subsequent violation, and (2) provide for the seizure and forfeiture to the municipality of such all-terrain vehicle for a violation of such ordinance, subject to any bona fide lien, lease or security interest in the all-terrain vehicle, including, but not limited to, a lien under § 14-66c.

(b) No all-terrain vehicle shall be forfeited under an ordinance adopted pursuant to this section to the extent of the interest of an owner or lienholder by reason of any act or omission committed by another person if such owner or lienholder did not know and could not have reasonably known that such all-terrain vehicle was being used or was intended to be used in violation of a municipal ordinance.

(c) Any all-terrain vehicle ordered forfeited pursuant to such an ordinance shall be sold at public auction conducted by the municipality. The proceeds of such sale shall be paid to the treasurer of the municipality, who shall deposit such proceeds into the general fund of the municipality.