Bill Text: NY A03499 | 2023-2024 | General Assembly | Amended


Bill Title: Requires automobile brokers to maintain a place of business; requires certain notices and recordkeeping; makes related provisions.

Spectrum: Moderate Partisan Bill (Democrat 39-7)

Status: (Engrossed) 2024-06-06 - RETURNED TO ASSEMBLY [A03499 Detail]

Download: New_York-2023-A03499-Amended.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                         3499--B
                                                                 Cal. No. 93

                               2023-2024 Regular Sessions

                   IN ASSEMBLY

                                    February 3, 2023
                                       ___________

        Introduced by M. of A. CARROLL, STIRPE, REYES, TAYLOR, DICKENS, DeSTEFA-
          NO,  RAMOS, MIKULIN, SAYEGH, SMITH, WILLIAMS, COOK, SEAWRIGHT, REILLY,
          MILLER, ROZIC, EPSTEIN, CRUZ, STECK, RA, BENEDETTO, JACOBSON, HYNDMAN,
          THIELE, LAVINE, STERN, JONES, BUTTENSCHON, BRAUNSTEIN,  FALL,  PAULIN,
          L. ROSENTHAL,  WALLACE,  DILAN,  AUBRY,  JEAN-PIERRE, DARLING, WALKER,
          ANDERSON, JACKSON, RAGA, BURGOS -- Multi-Sponsored  by  --  M.  of  A.
          FITZPATRICK,  HEVESI, SIMON -- read once and referred to the Committee
          on Consumer Affairs and Protection -- reported  and  referred  to  the
          Committee  on Codes -- reported and referred to the Committee on Rules
          -- ordered to a third reading -- amended on the special order of third
          reading, ordered reprinted as amended,  retaining  its  place  on  the
          special  order of third reading -- ordered to a third reading, amended
          and ordered reprinted, retaining its place on the order of third read-
          ing

        AN ACT to amend the general business law and  the  vehicle  and  traffic
          law, in relation to automobile broker businesses

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1.  Subdivision 1 of section 736 of the general business  law,
     2  as  amended  by  chapter  28  of the laws of 2018, is amended to read as
     3  follows:
     4    1. "Automobile broker business" means  any  person  who,  for  a  fee,
     5  commission  or  other valuable consideration, regardless of whether such
     6  fee, commission, or consideration is paid directly by a consumer, offers
     7  to provide, provides, or represents that [he  or  she]  such  automobile
     8  broker business will provide a service of purchasing, arranging, assist-
     9  ing, facilitating or effecting the purchase or lease of an automobile as
    10  agent,  broker, or intermediary for a consumer. "Automobile broker busi-
    11  ness" does not include any person registered as  a  dealer  pursuant  to
    12  article sixteen of the vehicle and traffic law, only when operating in a
    13  manner  pursuant to such registration under article sixteen of the vehi-
    14  cle and traffic law, any person registered under  section  four  hundred
    15  fifteen-a  of  the  vehicle  and  traffic  law, only when operating in a
    16  manner described in section four hundred fifteen-a of  the  vehicle  and

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD00498-03-4

        A. 3499--B                          2

     1  traffic law, an automobile auctioneer, only when operating in the manner
     2  described  in  section  twenty-three  of this chapter, nor any bona fide
     3  employee of a registered dealer while acting for  such  dealer,  or  any
     4  person  who  sells, offers for sale or lease or acts as agent, broker or
     5  intermediary in effecting the purchase or lease of three or fewer  auto-
     6  mobiles  in  any  calendar  year,  any national service which aggregates
     7  information for consumers, but does  not  otherwise  have  contact  with
     8  consumers, or any motor vehicle franchisor, manufacturer, [or] distribu-
     9  tor,  distributor  branch  or  factory  branch  registered under article
    10  sixteen of the vehicle and traffic law.
    11    § 2. Section 736 of the general business law is amended  by  adding  a
    12  new subdivision 4 to read as follows:
    13    4.  "Place of business" means a designated permanent location at which
    14  the business of the automobile broker business is conducted.
    15    § 3. The general business law is amended by adding a new section 736-b
    16  to read as follows:
    17    § 736-b. Place of business required. 1.  No  person  shall  engage  in
    18  business  as  an automobile broker business, as defined in section seven
    19  hundred thirty-six of this article, without maintaining a place of busi-
    20  ness.
    21    2. The certificate of registration for an automobile  broker  business
    22  pursuant  to  paragraph  c  of subdivision seven of section four hundred
    23  fifteen of the vehicle and traffic law shall be  amended  within  thirty
    24  days  of a change of address of an automobile broker business to reflect
    25  the new address of its place of business.
    26    § 4. Subdivision 1 and the  opening  paragraph  of  subdivision  2  of
    27  section  738  of the general business law, subdivision 1 and the opening
    28  paragraph of subdivision 2 as added by chapter 616 of the laws of  1988,
    29  the  opening  paragraph and paragraph (e) of subdivision 1 as amended by
    30  chapter 28 of the laws of 2018, and paragraphs (f) and (g)  of  subdivi-
    31  sion  1  as  amended  by chapter 477 of the laws of 2017, are amended to
    32  read as follows:
    33    1. Prior to the purchase or lease of an automobile, the  consumer  and
    34  the  automobile  broker  business  shall  enter  into  a contract. Every
    35  contract between a consumer and an automobile broker  business  for  the
    36  purchase  or lease of an automobile shall be in writing, shall be dated,
    37  shall contain the street address of the place of business of the automo-
    38  bile broker business, the registration number issued to  the  automobile
    39  broker  business pursuant to section four hundred fifteen of the vehicle
    40  and traffic law and the name and address of the consumer  and  shall  be
    41  signed  by  the  consumer  and  by the automobile broker business. Every
    42  contract shall comply with the requirements set forth  in  this  section
    43  and contain the following:
    44    (a)  A complete description of the automobile and each option, if any,
    45  ordered; a statement of whether the automobile is or  will  be  manufac-
    46  tured  in accordance with United States specifications and is or will be
    47  certified by the manufacturer as such; if the automobile is not or  will
    48  not be manufactured in accordance with United States safety and environ-
    49  mental  specifications,  and  the  consumer  has retained the automobile
    50  broker business to arrange for the modification  of  the  automobile  to
    51  meet  such  specifications, the name and street address of the modifica-
    52  tion facility and a statement in immediate proximity to such information
    53  that the automobile broker business assumes full financial  responsibil-
    54  ity  that  the  automobile  will be properly modified to meet all United
    55  States safety and environmental specifications.

        A. 3499--B                          3

     1    (b) The price of the automobile including any options ordered. If  the
     2  price set forth is an estimated price, a statement in immediate proximi-
     3  ty  to  the price that the price is an estimated price only and that the
     4  consumer has the right to cancel the contract  and  to  receive  a  full
     5  refund  if the final price exceeds the estimated price by more than five
     6  percent.
     7    (c) The estimated delivery date of the automobile  and  the  place  of
     8  delivery  and a statement in immediate proximity to the estimated deliv-
     9  ery date that, if the automobile has not been  delivered  in  accordance
    10  with  the  contract within thirty days following such estimated delivery
    11  date, the consumer has the right to cancel the contract and to receive a
    12  full refund, unless the delay in delivery is attributable to the consum-
    13  er.
    14    (d) A statement of whether or not the manufacturer's warranty accompa-
    15  nying the automobile is the same warranty as that furnished to  purchas-
    16  ers  of  that  make  automobile from an authorized dealer located in the
    17  United States.
    18    (e) A statement that the broker shall only accept  payment  for  their
    19  services from either the dealer selling or leasing the automobile or the
    20  buyer or lessee of the automobile, but may not accept payment from both.
    21    (f) A statement that the consumer has the option to take delivery of a
    22  motor vehicle at the selling or leasing dealership.
    23    (g)  A  description  of  any  other services and an itemization of the
    24  charges for each. Such description shall include disclosure of the auto-
    25  mobile dealer from which the automobile was purchased or leased, as well
    26  as all fees, commissions or other valuable  considerations  paid  by  an
    27  automobile dealer to the automobile broker business for selling, arrang-
    28  ing, assisting or effecting the sale or lease of an automobile as agent,
    29  broker, or intermediary between the consumer and the automobile dealer.
    30    [(f)]  (h)  If  a  consumer  elects to cancel the contract pursuant to
    31  paragraph (b) or (c) of this subdivision, he  or  she  shall  notify  in
    32  writing  the  automobile broker business at the address specified in the
    33  contract. The automobile broker business shall make a full refund to the
    34  consumer within ten business days following receipt of the request for a
    35  refund.   The contract shall contain  a  statement,  setting  forth  the
    36  consumer's  right to cancel the contract under paragraphs (b) and (c) of
    37  this subdivision and the refund obligations  of  the  automobile  broker
    38  business.
    39    [(g)]  (i)  The statements required by paragraphs (a), (b), (c), [and]
    40  (e), (f), (g) and (h) of this subdivision shall be printed in  at  least
    41  [ten] twelve point bold type.
    42    The  contract  shall  be accompanied by a completed form in duplicate,
    43  captioned "Notice of  Cancellation"  which  shall  be  attached  to  the
    44  contract  and  easily  detachable,  and  which shall contain in at least
    45  [ten] twelve point type the following:
    46    § 5. Section 741-a of the general business law, as amended by  chapter
    47  477 of the laws of 2017, is amended to read as follows:
    48    §  741-a.  Advertising.  1. Automobile broker businesses shall clearly
    49  and conspicuously disclose the following in all  advertisements  in  any
    50  medium, and in any print advertisement such disclosures shall not appear
    51  in  any  footnotes  and  shall  be  situated in the top half of any such
    52  advertisement in an easily readable typeface:
    53    (a) That the automobile broker business is not a registered new  motor
    54  vehicle dealer but is a registered automobile broker business as defined
    55  in section four hundred fifteen of the vehicle and traffic law;

        A. 3499--B                          4

     1    (b)  The  registration number issued to the automobile broker business
     2  pursuant to section four hundred fifteen of the vehicle and traffic law;
     3    (c)  Whether any fees may be imposed by the automobile broker business
     4  for services rendered. Details of such compensation shall be provided by
     5  the automobile broker business upon request by the consumer; [and]
     6    (d) That no warranty repair services will be provided by  the  automo-
     7  bile broker business; and
     8    (e)  That  the  automobile  broker business is not affiliated with any
     9  manufacturer, dealership, or dealership group.
    10    2. The official business certificate of registration shall be  clearly
    11  and  conspicuously  displayed  at the place of business of an automobile
    12  broker business.
    13    § 6. The general business law is amended by adding a new section 741-c
    14  to read as follows:
    15    § 741-c. Private information security. In addition to the requirements
    16  of subdivision twenty-one of section four hundred fifteen of the vehicle
    17  and traffic law, an automobile broker business shall:
    18    1. keep and maintain all consumer records containing private  informa-
    19  tion  in  a safe place that is not accessible to persons not employed by
    20  the automobile broker business, including by keeping and  maintaining  a
    21  clear and permanent physical barrier from other businesses that share or
    22  neighbor its place of business;
    23    2.  have  a separate mailbox at such place of business for the automo-
    24  bile broker business; and
    25    3. have a method of securing personal information, including  but  not
    26  limited to in a locking cabinet or safe.
    27    §  7.  Section 415 of the vehicle and traffic law is amended by adding
    28  four new subdivisions 22, 23, 24 and 25 to read as follows:
    29    22. Compliance. All dealers and automobile  broker  businesses  regis-
    30  tered under subdivisions three and three-a of this section shall certify
    31  and  attest to compliance with sections three hundred ninety-nine-cc, as
    32  added by chapter 655 of the laws of 2005, three hundred  ninety-nine-dd,
    33  as  added by chapter 487 of the laws of 2006, three hundred ninety-nine-
    34  ddd, three hundred ninety-nine-h, three  hundred  ninety-nine-oo,  three
    35  hundred ninety-nine-p, three hundred ninety-nine-pp, eight hundred nine-
    36  ty-nine-bb  of the general business law, and part three hundred fourteen
    37  of title sixteen of the code of federal regulations as applicable.
    38    23. Automobile broker record  requirements.  (a)  For  each  completed
    39  transaction  and  within  three  business  days of consummation thereof,
    40  automobile brokers shall maintain a permanent  paper  file  record  that
    41  clearly  evidences  and records the make, model, year, color and vehicle
    42  identification number of all previously unregistered motor vehicles  for
    43  which  such  broker  has  provided  a  service of purchasing, arranging,
    44  assisting, facilitating or effecting the purchase or lease of such motor
    45  vehicle. Such records shall be maintained for a  six-year  period  after
    46  consummation  of  the  transaction.  Such records shall also include the
    47  name and address of the purchaser or lessee of such motor  vehicle,  the
    48  date of sale or commencement of lease with respect to such motor vehicle
    49  and  the name and address of the dealer from which the motor vehicle was
    50  purchased or leased.
    51    (b) The records maintained by the automobile broker  businesses  shall
    52  include  a  copy  of  the  dealer rate sheets received by the automobile
    53  broker from the dealers that were relied upon by the  automobile  broker
    54  in connection with such transaction.
    55    (c)  Such records shall be open for inspection by the commissioner, or
    56  his or her agent, during reasonable business hours.

        A. 3499--B                          5

     1    (d) As an alternative to paper file records, an automobile broker  may
     2  use a computer and appropriate software to maintain the records required
     3  to  be  kept by this section, provided all information required by para-
     4  graphs (a) and (b) of this subdivision are duly recorded and  maintained
     5  in accordance with this subdivision.
     6    24.  Maintenance  records.  For  each sale or lease of a motor vehicle
     7  that involves an automobile broker  business,  the  dealer  must  obtain
     8  evidence  of  the  automobile  broker  business'  registration  and  the
     9  broker's registration number and maintain such records in the deal jack-
    10  et for each transaction which also shall  contain  the  purchase  order,
    11  copies of the title and registration documents, the bill of sale and the
    12  retail  installment  sale  contract  required  under  article ten of the
    13  personal property law or the retail lease agreement required under arti-
    14  cle nine-A of the personal property law.
    15    25. Broker compensation. No dealer may  offer  or  pay  an  automobile
    16  broker   business  any  fee,  or  commission,  other  than  compensation
    17  disclosed pursuant  to  section  seven  hundred  thirty-eight  or  seven
    18  hundred forty-one-b of the general business law or section three hundred
    19  two  or  three  hundred  thirty-seven  of  the  personal  property  law;
    20  provided, however, that the automobile broker business  may  not  accept
    21  any  such  fee  or  commission from the dealer if the broker has or will
    22  accept payment from the buyer or lessee of the automobile.
    23    § 8. The general business law is amended by adding a new  section  745
    24  to read as follows:
    25    §  745.  Preemption.  The  provisions of this article and section four
    26  hundred fifteen of the vehicle and traffic law shall govern the require-
    27  ments and obligations with respect to  the  automobile  broker  business
    28  notwithstanding any other law to the contrary. No local or municipal law
    29  shall  be  enacted which shall impose any different or other obligations
    30  on the automobile broker business including a requirement of any fee  or
    31  license for the automobile broker business.
    32    § 9. Section 741-b of the general business law, as added by chapter 28
    33  of the laws of 2018, is amended to read as follows:
    34    §  741-b.  Disclosure.  An  automobile broker business shall provide a
    35  disclosure at the time such automobile broker business takes an order to
    36  search for  a  leased  or  purchased  vehicle  meeting  the  prospective
    37  lessee's specifications. Such disclosure shall provide the amount of any
    38  fees,  commissions or other valuable consideration the automobile broker
    39  business expects to receive, if known, from  a  dealer,  lessor  or  any
    40  other person or entity for any assistance the automobile broker business
    41  provides  in  effecting the lease or purchase transaction. If the amount
    42  of any such fees, commissions or other valuable consideration the  auto-
    43  mobile  broker business expects to receive is unknown at the time of the
    44  required disclosure, the automobile broker business shall disclose:  (a)
    45  whether it has a contract with any dealer, lessor or any other person or
    46  entity  for the provision of assistance in effecting a lease or purchase
    47  transaction; [and] (b) [whether] that  the  automobile  broker  business
    48  [may]  shall be compensated by the dealer, lessor or any other person or
    49  entity for any assistance in effecting such lease transaction;  and  (c)
    50  that  the amount of any such fees, commissions or other valuable consid-
    51  eration the automobile broker business receives, whether from the dealer
    52  or the buyer of the automobile, shall be disclosed on the executed lease
    53  or purchase contract or finance  agreement  pursuant  to  section  three
    54  hundred two or three hundred thirty-seven of the personal property law.
    55    §  10.  The  general  business  law is amended by adding a new section
    56  741-d to read as follows:

        A. 3499--B                          6

     1    § 741-d. Prohibited acts. An automobile broker business is  prohibited
     2  from:
     3    1.  advertising that such automobile broker business has any new auto-
     4  mobile in stock;
     5    2. advertising any price figure in an advertisement unless such figure
     6  represents the actual price of the advertised automobile,  exclusive  of
     7  registration and titles, fees and taxes;
     8    3.  starting,  completing,  or answering any portion of a financing or
     9  credit application or the lease or purchase agreement of an  automobile,
    10  on  behalf  of a consumer or dealer, without including on or affixing to
    11  such application or agreement, the name and registration number  of  the
    12  automobile broker business; and
    13    4. accepting any payment other than that disclosed under section seven
    14  hundred  thirty-eight  or  seven  hundred  forty-one-b  of this article,
    15  whether from the dealer or buyer of the automobile.
    16    § 11. Section 743 of the general business law, as amended  by  chapter
    17  372 of the laws of 2016, is amended to read as follows:
    18    §  743.  Enforcement  by attorney general. 1. In addition to the other
    19  remedies provided, whenever there shall be a violation of this  article,
    20  application  may  be  made  by  the  attorney general in the name of the
    21  people of the state of New York to a court or justice  having  jurisdic-
    22  tion  by a special proceeding to issue an injunction, and upon notice to
    23  the defendant of not less than five days, to  enjoin  and  restrain  the
    24  continuance  of such violations; and if it shall appear to the satisfac-
    25  tion of the court or justice that the defendant has, in  fact,  violated
    26  this  article,  an  injunction  may  be issued by such court or justice,
    27  enjoining and restraining any further violation, without requiring proof
    28  that any person has, in fact, been injured or damaged  thereby.  In  any
    29  such  proceeding,  the court may make allowances to the attorney general
    30  as provided in paragraph six of subdivision (a) of section  eighty-three
    31  hundred  three  of the civil practice law and rules, and direct restitu-
    32  tion. Whenever the court shall determine that a violation of this  arti-
    33  cle  has  occurred,  the  court shall impose a civil penalty of not less
    34  than one thousand dollars and not more than three thousand  dollars  for
    35  each  violation.  In  connection with any such proposed application, the
    36  attorney general is authorized to take proof and make a determination of
    37  the relevant facts and to issue subpoenas in accordance with  the  civil
    38  practice law and rules.
    39    2.  The  provisions  of this article may be enforced concurrently by a
    40  municipal consumer affairs office.
    41    § 12. Severability. If any clause, sentence,  paragraph,  subdivision,
    42  section  or part of this act shall be adjudged by any court of competent
    43  jurisdiction to be invalid, such judgment shall not affect,  impair,  or
    44  invalidate the remainder thereof, but shall be confined in its operation
    45  to the clause, sentence, paragraph, subdivision, section or part thereof
    46  directly  involved  in the controversy in which such judgment shall have
    47  been rendered. It is hereby declared to be the intent of the legislature
    48  that this act would have been enacted even if  such  invalid  provisions
    49  had not been included herein.
    50    §  13.  This  act  shall  take effect on the one hundred eightieth day
    51  after it shall have become a law.  Effective immediately, the  addition,
    52  amendment  and/or  repeal  of  any  rule or regulation necessary for the
    53  implementation of this act on its effective date are  authorized  to  be
    54  made and completed on or before such effective date.
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