Bill Text: NY A01932 | 2021-2022 | General Assembly | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Requires registration of new automotive broker businesses; enacts various provisions relating to conduct of such businesses; defines certain deceptive practices; establishes rights of action and penalties.
Spectrum: Moderate Partisan Bill (Democrat 51-8)
Status: (Engrossed - Dead) 2022-05-31 - amended on third reading 1932c [A01932 Detail]
Download: New_York-2021-A01932-Amended.html
Bill Title: Requires registration of new automotive broker businesses; enacts various provisions relating to conduct of such businesses; defines certain deceptive practices; establishes rights of action and penalties.
Spectrum: Moderate Partisan Bill (Democrat 51-8)
Status: (Engrossed - Dead) 2022-05-31 - amended on third reading 1932c [A01932 Detail]
Download: New_York-2021-A01932-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 1932--B 2021-2022 Regular Sessions IN ASSEMBLY January 13, 2021 ___________ Introduced by M. of A. CARROLL, ABBATE, STIRPE, REYES, TAYLOR, CYMBROW- ITZ, DICKENS, ENGLEBRIGHT, D. ROSENTHAL, GALEF, GOTTFRIED, DeSTEFANO, RAMOS, MIKULIN, SAYEGH, SMITH, WILLIAMS, COOK, ABINANTI, QUART, SEAWRIGHT, REILLY, B. MILLER, ROZIC, FERNANDEZ, EPSTEIN, CRUZ, STECK, PHEFFER AMATO, PICHARDO, RA, BENEDETTO, BYRNE, JACOBSON, HYNDMAN, PERRY, THIELE, SOLAGES, LAVINE, STERN, GRIFFIN, JONES, BUTTENSCHON, BRAUNSTEIN, FALL, FRONTUS, PAULIN, L. ROSENTHAL, WALLACE, DILAN, AUBRY, JEAN-PIERRE, DARLING, WALKER, ANDERSON, JACKSON -- Multi-Spon- sored by -- M. of A. DE LA ROSA, FITZPATRICK, HEVESI, SIMON -- read once and referred to the Committee on Consumer Affairs and Protection -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- again reported from said commit- tee with amendments, ordered reprinted as amended and recommitted to said committee AN ACT to amend the general business law and the vehicle and traffic law, in relation to designating new automotive 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 will provide a 8 service of purchasing, arranging, assisting, facilitating or effecting 9 the purchase or lease of an automobile as agent, broker, or intermediary 10 for a consumer. "Automobile broker business" does not include any person 11 registered as a new motor vehicle dealer or qualified dealer pursuant to 12 article sixteen of the vehicle and traffic law, any person registered 13 under section four hundred fifteen-a of the vehicle and traffic law, EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD05349-05-1A. 1932--B 2 1 only when operating under activity covered by such registration, an 2 automobile auctioneer, only when operating in the manner described in 3 section twenty-three of this chapter, nor any bona fide employee of a 4 registered new motor vehicle dealer or qualified dealer while acting for 5 such new motor vehicle dealer or qualified dealer, or any person who 6 sells, offers for sale or lease or acts as agent, broker or intermediary 7 in effecting the purchase or lease of three or fewer automobiles in any 8 calendar year, any national service which aggregates information for 9 consumers, but does not otherwise have contact with consumers, [or] any 10 motor vehicle franchisor, manufacturer, or distributor, distributor 11 branch or factory branch registered under article sixteen of the vehicle 12 and traffic law. 13 § 2. Section 736-a of the general business law, as added by chapter 14 477 of the laws of 2017, is amended to read as follows: 15 § 736-a. Registration required. 1. (a) No person shall engage in busi- 16 ness as an automobile broker business, as defined in section seven 17 hundred thirty-six of this article, without first having been issued a 18 certificate of registration for an automobile broker business pursuant 19 to paragraph c of subdivision seven of section four hundred fifteen of 20 the vehicle and traffic law. A certificate of registration for an auto- 21 mobile broker business shall be valid for a period of two years. 22 (b) No automobile broker business shall represent or accept payment 23 from, either directly or indirectly, a franchisee, dealer, franchisor, 24 manufacturer, distributor, distributor branch and/or factory branch, as 25 such terms are defined in sections four hundred fifteen and four hundred 26 sixty-two of the vehicle and traffic law. 27 (c) No automobile broker business shall perform any services involving 28 the purchasing, arranging, assisting, facilitating or effecting the 29 purchase or lease of an automobile as agent, broker, or intermediary for 30 a consumer, unless done pursuant to a contract that complies with the 31 provisions of section seven hundred thirty-eight of this article. 32 2. A certificate of registration for an automobile broker business 33 shall not permit the registrant to display for sale or lease any new or 34 used motor vehicles without registration as a dealer under section four 35 hundred fifteen of the vehicle and traffic law. 36 3. Any person that sells or leases five or more vehicles in a calendar 37 year to or through one or more automobile broker business shall be 38 deemed to be dealing in motor vehicles as that term is used in paragraph 39 a of subdivision one of section four hundred fifteen of the vehicle and 40 traffic law. 41 4. The commissioner of motor vehicles shall adopt rules and regu- 42 lations necessary to effectuate the provisions of this section, includ- 43 ing regulations that require the disclosure of the name, address, and 44 registration number of an automobile broker business that provided the 45 service of arranging, assisting, facilitating or effecting the purchase 46 or lease of any new motor vehicle, and the fee collected by the broker 47 from the consumer for providing such service. Such rules and regulations 48 shall require that such information of the automobile broker business 49 and its fee for service be printed on any invoice, bill of sale, or 50 buyer's order, and on any application for registration or title submit- 51 ted by any dealer to the department of motor vehicles on behalf of the 52 consumer related to such purchased or leased motor vehicle. 53 § 3. The general business law is amended by adding a new section 737-a 54 to read as follows: 55 § 737-a. Bona fide bid soliciting required. 1. On behalf of each 56 consumer executing a contract that conforms to the requirements ofA. 1932--B 3 1 subdivision three of section seven hundred thirty-eight of this article, 2 an automobile broker business shall solicit a bid, from at least new 3 motor vehicle dealers of the same line-make, that meets the specifica- 4 tions of such prospective buyer or lessee, including from the new motor 5 vehicle dealer located in closest proximity to the home address of a 6 prospective buyer or lessee of a new motor vehicle or, in the case of an 7 entity, the place of doing business of such prospective buyer or lessee 8 of a new motor vehicle. Whenever an automobile broker business may 9 choose bid specifications on behalf of a consumer, such automobile 10 broker business shall solicit a bid matching such specifications from at 11 least three new motor vehicle dealers of the same line-make, including 12 from the new motor vehicle dealer located in closest proximity to the 13 home address of a prospective buyer or lessee of a new motor vehicle or, 14 in the case of an entity, the place of doing business of such prospec- 15 tive buyer or lessee of a new motor vehicle. 16 2. At a minimum, an automobile broker business that solicits a bid 17 pursuant to subdivision one of this section shall request the following 18 information as part of any solicitation to a new motor vehicle dealer: 19 (a) price or lease costs; 20 (b) down or similar payment; 21 (c) number of payments; 22 (d) amount of installment or monthly payments; 23 (e) make, model, year of production, and color of any available motor 24 vehicle; 25 (f) whether the motor vehicle has accessories specifically requested 26 by the consumer; 27 (g) fees; 28 (h) where applicable, finance charges and/or annual percentage rate; 29 (i) estimated delivery date of the automobile; 30 (j) statement of whether or not the manufacturer's warranty accompany- 31 ing the motor vehicle is the same warranty as that furnished to purchas- 32 ers of the same motor vehicle by an authorized dealer; and 33 (k) the identity of the new motor vehicle dealer offering a bid. 34 3. The contents of each bid by a motor vehicle dealer, solicited 35 pursuant to subdivision one of this section, shall be provided to each 36 consumer on whose behalf such bid has been solicited, regardless of the 37 particulars or content of any such bid. 38 4. The commissioner of motor vehicles shall adopt rules and regu- 39 lations necessary to effectuate the provisions of this section. 40 § 4. The opening paragraph and paragraph (e) of subdivision 1 and 41 subdivisions 3 and 4 of section 738 of the general business law, the 42 opening paragraph and paragraph (e) of subdivision 1 as amended and 43 subdivision 4 as added by chapter 28 of the laws of 2018 and subdivision 44 3 as amended by chapter 477 of the laws of 2017, are amended to read as 45 follows: 46 Every contract between a consumer and an automobile broker business 47 for the purchase of [an automobile] a motor vehicle, other than a new 48 motor vehicle, shall be in writing, shall be dated, shall contain the 49 street address of the automobile broker business and the consumer and 50 shall be signed by the consumer and by the automobile broker business. 51 Every contract shall comply with the requirements set forth in this 52 section and contain the following: 53 (e) A description of any other services and an itemization of the 54 charges for each. Such description shall include disclosure of the auto- 55 mobile dealer from which the automobile was purchased, as well as all 56 fees, commissions or other valuable [considerations paid by an automo-A. 1932--B 4 1bile dealer] consideration owed by the consumer to the automobile broker 2 business for selling, arranging, assisting or effecting the sale of an 3 automobile as agent, broker, or intermediary between the consumer and 4 the automobile dealer. 5 3. Every contract between a consumer and an automobile broker business 6 for the service of arranging, assisting, facilitating or effecting the 7 purchase or lease of a new motor vehicle shall be in writing, shall be 8 dated, shall contain the street address of the automobile broker busi- 9 ness and the consumer, and shall be signed by the consumer and by the 10 automobile broker business. Every such contract shall comply with the 11 requirements set forth in this section and contain the following 12 provisions, which shall be printed in at least twelve-point bold type 13 and shall not be negated or superseded by any additional provision: 14 (a) A title, across the top of the document in at least sixteen-point 15 bold type, of "Contract for Automobile Brokering Services for a New 16 Motor Vehicle". 17 (b) A statement of whether a solicited new motor vehicle is or will be 18 manufactured in accordance with United States specifications and is or 19 will be certified by the manufacturer as such if the new motor vehicle 20 is not or will not be manufactured in accordance with United States 21 safety and environmental specifications, and the consumer has retained 22 the automobile broker business to arrange for the modification of the 23 new motor vehicle to meet such specifications, the name and street 24 address of the modification facility and a statement in immediate prox- 25 imity to such information that the automobile broker business assumes 26 full financial responsibility that the new motor vehicle will be proper- 27 ly modified to meet all United States safety and environmental specifi- 28 cations. 29 (c) A statement that the consumer may cancel the contract for automo- 30 bile brokering services for a new motor vehicle for any reason within 31 three days of the execution of such contract and that the consumer has 32 the right to a full refund within ten business days following receipt of 33 the notice of cancellation. 34 (d) A statement that, if the requested new motor vehicle cannot be 35 procured by the automobile broker business within thirty days following 36 the date of execution of the contract for automobile brokering services 37 for a new motor vehicle, the consumer has the right to cancel the 38 contract and to receive a full refund within ten business days following 39 receipt of the request for a refund, unless the delay in delivery is 40 attributable to the consumer. 41 (e) A statement that the consumer shall be provided with the contents 42 of each bid received by the automobile broker business in response to 43 its solicitation on behalf of such consumer. 44 (f) The amount of the fee to be paid by the consumer to the automobile 45 broker business for the service of arranging, assisting, facilitating or 46 effecting the purchase or lease of a new motor vehicle. 47 (g) A statement that the single fee authorized by such contract for 48 automobile brokering services for a new motor vehicle is inclusive of 49 all charges incident to the purchasing, arranging, assisting, facilitat- 50 ing or effecting the purchase or lease of such new motor vehicle by the 51 automobile broker business as agent, broker, or intermediary and that no 52 other charge or expense whatsoever shall be taken, received, reserved or 53 contracted for by the automobile broker business for such services. 54 4. The contract for automobile brokering services for a new motor 55 vehicle shall be accompanied by a completed form in duplicate, captioned 56 "Notice of Cancellation" which shall be attached to the contract andA. 1932--B 5 1 easily detachable, and which shall contain in at least twelve-point type 2 the following: 3 "Notice of Cancellation 4 You may cancel this Contract for Automobile Brokering Services for a 5 New Motor Vehicle, without any penalty or obligation, within three days 6 from the date that a copy of an executed contract is received by you. 7 You may also cancel this contract, without penalty or obligation, if the 8 automobile broker business does not produce a bid meeting your specifi- 9 cations within thirty days of the date of execution of this contract. 10 To cancel this contract, mail or deliver a signed and dated copy of 11 this cancellation notice, or any other written notice, to (name of auto- 12 mobile broker business) at (address of automobile broker business) not 13 later than midnight of the third day following your receipt of a signed 14 contract. 15 I hereby cancel this transaction. 16 ________________________________ (signature of consumer) 17 _____________________ (date)" 18 5. An automobile broker business shall deliver to the consumer or mail 19 to him or her at the address shown on [the] any contract required by 20 this section, an executed copy thereof. 21 [4. An] 6. In addition to the brokering services agreement required by 22 subdivision one of this section, an automobile broker business in any 23 transaction involving the lease of a vehicle shall provide the retail 24 lessee with a retail lease agreement as provided for in section three 25 hundred thirty-seven of the personal property law. [The automobile26broker shall provide a written disclosure of the amount of any fee,27commission or other consideration paid or expected to be paid by the28lessor to the automobile broker business in connection with a trans-29action involving the lease of a vehicle. Such disclosure shall be signed30by the retail lessee. The automobile broker business shall provide the31retail lessee with a signed copy of such disclosure together with the32retail lease agreement referenced herein.] Nothing in this section shall 33 be construed to permit the delivery of an executed retail lease agree- 34 ment to a new motor vehicle by a person other than the prospective 35 lessee. 36 § 5. Subdivision 1 of section 740-a of the general business law, as 37 amended by chapter 477 of the laws of 2017, is amended to read as 38 follows: 39 1. Automobile broker businesses shall obtain and continue in effect a 40 surety bond in an amount of [one] two hundred fifty thousand dollars 41 executed by a surety company authorized to transact business in the 42 state by the department of financial services of the state or its 43 successor. The bonds shall be approved as to form by the secretary of 44 state and shall be conditioned on the automobile broker business' 45 payment of all valid bank drafts, including checks, drawn for the 46 purchase of motor vehicles and safekeeping of all customer deposits 47 related to the sale of a motor vehicle between the time of receipt of 48 such customer deposit and the transfer of good title to the vehicle to 49 the customer. 50 § 6. Section 741 of the general business law, as added by chapter 616 51 of the laws of 1988, is amended to read as follows: 52 § 741. Deceptive acts and frauds prohibited. 1. It is hereby declared 53 to be a deceptive trade practice and unlawful for an automobile broker 54 business to misrepresent directly or indirectly in its advertising, 55 promotional materials, sales presentation, or in any manner:A. 1932--B 6 1 [1.] (a) The nature of the services to be performed and that a third 2 party will be paying for any such services; 3 [2.] (b) The time within which the services will be performed; 4 [3.] (c) The cost of the services to be performed; [and54.] (d) The ability of the automobile broker business to perform the 6 services; and 7 (e) That the automobile broker business is affiliated with any new 8 motor vehicle manufacturer, distributor, distributor branch and/or 9 factory branch including the use of any trademarks or copyrighted mate- 10 rial without the express, written consent of the owner of such material. 11 2. It shall be a fraudulent business practice for an automobile broker 12 business to refuse to disclose its registration number, issued either by 13 the state or a municipality, to a motor vehicle dealer. Furthermore, it 14 shall be a fraudulent business practice for an automobile broker busi- 15 ness to make any misrepresentation to a motor vehicle dealer or new 16 motor vehicle dealer regarding the eligibility of any consumer for any 17 discounts, reductions or any benefit programs regarding the sale or 18 lease of a motor vehicle. 19 3. It shall be a fraudulent business practice for an automobile broker 20 business to advertise new motor vehicles, through any print, electronic 21 or digital signal or medium, written or verbal statement or word, 22 design, device, sound or any combination of any such method or medium, 23 without disclosing that it is not a licensed motor vehicle dealer and is 24 not an authorized satellite location for any particular licensed motor 25 vehicle dealer. 26 4. It shall be a fraudulent business practice for an automobile broker 27 business to advertise through any print, electronic or digital signal or 28 medium, written or verbal statement or word, design, device, sound or 29 any combination of any such method or medium, that would lead a reason- 30 able consumer to conclude that the automobile broker business is a 31 licensed new motor vehicle dealer. 32 5. It shall be a fraudulent business practice for an automobile broker 33 business to maintain any website without including a text box with the 34 following statement in no less than eighteen-point boldface type on the 35 splash page: "(Broker name) is not a licensed new motor vehicle dealer 36 in the State of New York, nor is it an authorized affiliate of any 37 licensed new motor vehicle dealer in the State of New York". 38 6. It shall be a fraudulent business practice for an automobile broker 39 business to include any pricing or financing offers or promotions in any 40 advertisement, including any print, electronic or digital signal or 41 medium, written or verbal statement or word, design, device, sound or 42 any combination of any such method or medium. 43 7. It shall be a fraudulent business practice for an automobile broker 44 business to gain access to or use, or represent or advertise that it may 45 access or use, a portal, computer, or internet account owned by or 46 reserved for a new motor vehicle dealer to access or use one or more 47 finance sources that provide automotive-related loans, or purchases 48 retail installment contracts or lease contracts for motor vehicles. 49 § 7. Section 741-b of the general business law, as added by chapter 28 50 of the laws of 2018, is amended to read as follows: 51 § 741-b. [Disclosure] Disclosures required by brokers. 1. An automo- 52 bile broker business shall generate and provide a disclosure at the time 53 such automobile broker business takes an order to search for a leased or 54 purchased vehicle meeting the prospective buyer or lessee's specifica- 55 tions. Such disclosure shall provide the amount of any fees, commissions 56 or other valuable consideration the automobile broker business expectsA. 1932--B 7 1 to receive, if known, from [a dealer, lessor or] any [other] person or 2 entity for any assistance the automobile broker business provides in 3 effecting the purchase or lease transaction. If the amount of any such 4 fees, commissions or other valuable consideration the automobile broker 5 business expects to receive is unknown at the time of the required 6 disclosure, the automobile broker business shall disclose[: (a)] whether 7 it has a contract with any dealer, lessor or any other person or entity 8 for the provision of assistance in effecting a purchase or lease trans- 9 action[; and (b) whether the automobile broker business may be compen-10sated by the dealer, lessor or any other person or entity for any11assistance in effecting such lease transaction]. Nothing in this subdi- 12 vision shall be construed to permit the payment of any fees, commissions 13 or other valuable consideration to an automobile broker business by any 14 motor vehicle dealer. 15 2. An automobile broker business shall generate and provide an addi- 16 tional disclosure to the consumer at the time such automobile broker 17 business takes an order to search for a motor vehicle meeting the 18 prospective buyer or lessee's specifications. Such additional disclosure 19 shall state the following: 20 (a) that the automobile broker business shall make a bona fide attempt 21 to obtain a bid, quote or offer from at least three unaffiliated dealers 22 on behalf of the prospective buyer or lessee for a motor vehicle meeting 23 the prospective buyer or lessee's specifications, including from the new 24 motor vehicle dealer of such line-make located closest to the home or 25 place of business of such prospective buyer for a consumer that seeks a 26 new motor vehicle; 27 (b) that the automobile broker business shall provide to the consumer 28 all contents of each bid made by a motor vehicle dealer in response to 29 the solicitation of the automobile broker business; and 30 (c) that the automobile broker business has a duty to act for the 31 benefit of the prospective buyer or lessee. 32 3. Each disclosure required by this section to be made to a consumer 33 shall be acknowledged in writing by each consumer. 34 4. At the time an automobile broker business solicits a bid from a new 35 motor vehicle dealer in the manner described in section seven hundred 36 thirty-seven-a of this article, such broker shall provide a disclosure 37 to each solicited dealer as to the provisions of section seven hundred 38 thirty-nine of this article. 39 5. Prior to the execution of any purchase contract or lease for an 40 automobile, an automobile broker business shall provide each consumer 41 with all disclosures required to be made by a dealer. 42 § 8. The general business law is amended by adding a new section 741-c 43 to read as follows: 44 § 741-c. Private information security. 1. An automobile broker busi- 45 ness shall report annually to the department of motor vehicles its 46 compliance with sections three hundred ninety-nine-cc, three hundred 47 ninety-nine-dd, three hundred ninety-nine-ddd, three hundred ninety- 48 nine-h, three hundred ninety-nine-oo, three hundred ninety-nine-p, three 49 hundred ninety-nine-pp, and eight hundred ninety-nine-bb of this chap- 50 ter. For the purposes of subdivision two of section eight hundred nine- 51 ty-nine-bb of this chapter, an automobile broker business shall not be 52 considered a small business as that term is defined in that section and 53 shall instead be subject to reasonable security requirements that are 54 equivalent to those applicable to new motor vehicle dealers. 55 2. In addition to the requirements of subdivision one of this section, 56 an automobile broker business shall:A. 1932--B 8 1 (a) keep and maintain all consumer records containing private informa- 2 tion in a safe place that is not accessible to persons not employed by 3 the automobile broker business, including by keeping and maintaining a 4 clear and permanent physical barrier from other businesses that share or 5 neighbor its place of business; 6 (b) have a mailbox at such place of business dedicated only to the 7 automobile broker business; and 8 (c) have a method of locking security items, including a locking cabi- 9 net or safe. 10 3. No transaction for the purchase or lease of a new motor vehicle 11 that was arranged, assisted, facilitated or effected by an automobile 12 broker business shall be valid unless the consumer personally delivers 13 an executed purchase contract or lease, and, where applicable, financing 14 agreement, to the place of business of the dealer from which such vehi- 15 cle will be purchased or leased and such dealer verifies the identity of 16 such consumer. 17 § 9. Section 743 of the general business law, as amended by chapter 18 372 of the laws of 2016, is amended to read as follows: 19 § 743. Enforcement [by]. 1. By attorney general. In addition to the 20 other remedies provided, whenever there shall be a violation of this 21 article, application may be made by the attorney general in the name of 22 the people of the state of New York to a court or justice having juris- 23 diction by a special proceeding to issue an injunction, and upon notice 24 to the defendant of not less than five days, to enjoin and restrain the 25 continuance of such violations; and if it shall appear to the satisfac- 26 tion of the court or justice that the defendant has, in fact, violated 27 this article, an injunction may be issued by such court or justice, 28 enjoining and restraining any further violation, without requiring proof 29 that any person has, in fact, been injured or damaged thereby. In any 30 such proceeding, the court may make allowances to the attorney general 31 as provided in paragraph six of subdivision (a) of section eighty-three 32 hundred three of the civil practice law and rules, and direct restitu- 33 tion. Whenever the court shall determine that a violation of this arti- 34 cle has occurred, the court shall impose a civil penalty of not less 35 than [one] four thousand dollars and not more than [three] ten thousand 36 dollars for each violation. In connection with any such proposed appli- 37 cation, the attorney general is authorized to take proof and make a 38 determination of the relevant facts and to issue subpoenas in accordance 39 with the civil practice law and rules. 40 2. By local authorities. (a) Municipalities may, pursuant to local 41 law, act upon the business activity that is the subject of this article, 42 provided that no local government may diminish the protections or 43 requirements of this article or prevent enforcement of its provisions by 44 appropriate state officials. 45 (b) The provisions of this article may be enforced in the same manner 46 as set forth in subdivision one of this section by the director of a 47 municipal consumer affairs office or a business integrity commission, or 48 by the town attorney, city corporation counsel, or other lawfully desig- 49 nated enforcement officer of a municipality or local government, and all 50 monies collected thereunder shall be retained by such municipality or 51 local government, provided that no local government may prevent enforce- 52 ment of its provisions by appropriate state officials. 53 3. By private party. Any persons that are or may be injured by any 54 violation of this article may bring an action in his or her own name 55 against an automobile broker business to enjoin such unlawful act or 56 practice, an action to recover his or her damages and statutory damagesA. 1932--B 9 1 of not less than four thousand dollars and not more than ten thousand 2 dollars for each violation, or both such actions. Injury shall include, 3 but not be limited to, lost sales on account of deceptive or unfair 4 advertising and depriving a new motor vehicle dealer located closest to 5 a lessee or purchaser the opportunity to bid on such lease or purchase 6 as entitled by this article. Damages shall include, but not be limited 7 to, lost sales and the value of incentive payments, bonuses, holdbacks 8 or similar payments that would have been realized had a lessee or 9 purchaser purchased or leased such vehicle from the new motor vehicle 10 dealer in closest proximity to such lessee or purchaser but for the 11 actions of a person who knowingly aided the violation of the provisions 12 of this article. Nothing in this section shall require a franchisor, 13 manufacturer, or distributor to grant a new motor vehicle dealer a bene- 14 fit under an incentive, bonus, holdback or similar payment that the new 15 motor vehicle dealer did not earn or for which the new motor vehicle 16 dealer did not qualify. Such actions may be brought regardless of wheth- 17 er or not the underlying violation is consumer-oriented or has a public 18 impact. Given the remedial nature of this subdivision, standing to bring 19 an action under this subdivision shall be liberally construed and shall 20 be available to the fullest extent otherwise permitted by law. The court 21 may, in its discretion, award treble damages if the court finds the 22 defendant willfully or knowingly violated this article. The court shall 23 award reasonable attorney's fees and costs to a prevailing plaintiff. 24 § 10. Paragraph a of subdivision 1 of section 415 of the vehicle and 25 traffic law, as amended by chapter 554 of the laws of 2015, is amended 26 to read as follows: 27 a. "Dealer" means a person engaged in the business of buying, selling 28 or dealing in motor vehicles, motorcycles or trailers, other than mobile 29 homes or manufactured homes, at retail or wholesale; except, however, 30 trailers with an unladen weight of less than one thousand pounds. For 31 the purposes of this section, a "mobile home" or "manufactured home" 32 means a mobile home or manufactured home as defined in section one 33 hundred twenty-two-c of this chapter. Any person who sells, or offers 34 for sale or lease more than five motor vehicles, motorcycles or trailers 35 in any calendar year or who displays or permits the display of three or 36 more motor vehicles, motorcycles or trailers for sale at any one time or 37 within any one calendar month upon premises owned or controlled by him 38 or her, if such vehicles were purchased, acquired or otherwise obtained 39 by such person for the purpose of resale, will be regarded as a dealer. 40 For the purposes of this section, "offers for sale or lease" shall 41 include, but not be limited to, the act of drawing the public's atten- 42 tion to, or the presentation or display of any motor vehicle, including 43 the posting of images of any such vehicle, together with a suggested 44 retail price, lease cost or financing rate for such vehicle and an offer 45 to provide, the provision of, or a representation that such person may 46 provide a service of arranging, assisting, facilitating or effecting the 47 lease of such new motor vehicle, except this meaning shall not apply to 48 any activity of a cooperative or other advertising program or fund as 49 described in any franchise, as such term is defined by subdivision six 50 of section four hundred sixty-two of this title, or the display of 51 aggregated information and images by a national service that otherwise 52 does not have contact with consumers. Except as otherwise provided in 53 subdivisions three, five, six-b, and seven of this section, the term 54 "dealer" shall include a "new motor vehicle dealer" as defined by para- 55 graph f of this subdivision and a "qualified dealer" as defined in para- 56 graph g of this subdivision.A. 1932--B 10 1 § 11. Subdivision 3 of section 415 of the vehicle and traffic law is 2 amended by adding a new paragraph d to read as follows: 3 d. It is hereby declared to be a fraudulent practice, for the purposes 4 of paragraph c of subdivision nine of this section, for a dealer to use 5 any subsidiary corporation, affiliated corporation, or any other 6 controlled corporation, partnership, association, business or person to 7 accomplish what would otherwise be unlawful conduct under this article 8 or article thirty-five-B of the general business law, including request- 9 ing that an automobile broker business represent such dealer in generat- 10 ing a sale or lease or making payment to, either directly or indirectly, 11 an automobile broker business. 12 § 12. Subdivision 3-a and paragraph b-3 of subdivision 5 of section 13 415 of the vehicle and traffic law, as added by chapter 477 of the laws 14 of 2017, are amended to read as follows: 15 3-a. Automobile broker business registration. a. No person shall 16 engage in the automobile broker business or represent or advertise that 17 he or she is engaged or intends to engage in the automobile broker busi- 18 ness in this state, unless there shall have been issued to him or her a 19 certificate of registration as an automobile broker business by the 20 commissioner under this section pursuant to an application for registra- 21 tion submitted pursuant to subdivision five of this section. Such regis- 22 tration shall be effective for a period not exceeding two years. At the 23 discretion of the commissioner a registration may be renewed for a peri- 24 od of up to two years upon application therefor, in such form as the 25 commissioner may prescribe, and a showing of proof of satisfaction of 26 the requirements of section seven hundred forty-a of the general busi- 27 ness law, and upon payment of the fee as herein prescribed. 28 b. The commissioner shall not issue or renew a certificate of regis- 29 tration authorized by this subdivision to any dealer, franchisee, fran- 30 chisor, manufacturer, distributor, distributor branch or factory branch, 31 as such terms are defined in section four hundred sixty-two of this 32 title, or to any subsidiary, affiliate, employee or controlled person or 33 entity thereof. 34 c. As a condition of any certificate of registration issued or renewed 35 pursuant to this subdivision, an automobile broker business shall have, 36 and continuously maintain, a place of business in this state for which 37 it shall keep and maintain evidence that all necessary approvals, 38 licenses and/or permits have been obtained from all local governing 39 bodies to operate such place of business with customer or client traf- 40 fic. No more than one automobile broker business shall operate at any 41 single location and no automobile broker business shall operate at the 42 same location as a new motor vehicle dealer. 43 d. Every registered automobile broker business shall prominently and 44 conspicuously post, in such a manner that it is likely to be noticeable 45 to anyone entering its premises, its official business certificate of 46 registration and a sign, which sign shall clearly state: 47 "(Name of registered automobile broker) is not a franchised new motor 48 vehicle dealer. We are not authorized or approved by a manufacturer or 49 distributor to sell a new motor vehicle or perform recall or original 50 factory warranty work. If you order a search for a new motor vehicle 51 from this broker, we must make a bona fide effort to solicit bids from 52 at least three unaffiliated new motor vehicle dealers for a new motor 53 vehicle on your behalf, including from your local dealer." 54 e. As a condition of any certificate of registration issued or renewed 55 pursuant to this subdivision, and before performing any broker services 56 related to a new motor vehicle, an automobile broker business shallA. 1932--B 11 1 attest in writing to each consumer, that the broker: (i) is not a fran- 2 chised new motor vehicle dealer; (ii) is not authorized or approved by a 3 manufacturer or distributor to sell a new motor vehicle or perform 4 recall or original factory warranty work; and (iii) that the broker 5 shall make a bona fide effort to solicit bids from at least three unaf- 6 filiated new motor vehicle dealers that sell a new motor vehicle or any 7 line or make desired by such consumer, including from the consumer's 8 local dealer. 9 f. It is hereby declared to be a fraudulent practice, for the purposes 10 of paragraph c of subdivision nine of this section, for an automobile 11 broker business to draw the public's attention to, or present or display 12 any new motor vehicle, including by posting images of any such vehicle, 13 together with a suggested retail price, lease cost or financing rate for 14 such vehicle and an offer to provide, the provision of, or a represen- 15 tation that such person may provide a service of arranging, assisting, 16 facilitating or effecting the purchase or lease of such new motor vehi- 17 cle. 18 g. Nothing in this subdivision shall be construed to prohibit a fran- 19 chisor, manufacturer, or distributor from sponsoring activities intended 20 to generate leads toward the sale or lease of a new motor vehicle by a 21 franchisee. 22 b-3. In the case of an application for registration as an automobile 23 broker business, either for initial registration or renewal thereof, the 24 name and address of the surety company which will issue the bond 25 required by subdivision one of section seven hundred forty-a of the 26 general business law, a copy of such bond certified by the secretary of 27 state or one of his or her agents, and a statement indicating any inter- 28 est in the applicant's business entity by a person or entity described 29 in paragraph f of subdivision one or paragraph f of subdivision seven of 30 this section, or any employee or person, controlling person or entity 31 thereof. If the bond is to be issued by an authorized agent of the sure- 32 ty company licensed by the state, then the name and address of that 33 agent may be provided in lieu of the information concerning the surety 34 company. 35 § 13. Section 415 of the vehicle and traffic law is amended by adding 36 two new subdivisions 21 and 22 to read as follows: 37 21. Penalties and rights of action for failure to obtain a certificate 38 of registration as an automobile broker pursuant to subdivision three-a 39 and paragraph b-3 of subdivision five of this section. In addition to 40 any other action authorized by law, the commissioner, or any person 41 designated by him or her, may proceed against a party who has operated 42 as an automobile broker without certificate of registration in accord- 43 ance with the provisions of this article, in any one or more proceedings 44 and by order to enjoin such unlawful acts or practices and requiring the 45 offending party to pay the people of this state a penalty in a sum not 46 less than four thousand dollars and not more than ten thousand dollars 47 for each violation found to have been committed. Civil penalties 48 assessed under this subdivision shall be paid to the commissioner for 49 deposit into the state treasury, and unpaid civil penalties may be 50 recovered by the commissioner in a civil action in the name of the 51 commissioner. For the purposes of this subdivision, a "violation" shall 52 mean each vehicle sold or leased to a consumer for which the party that 53 failed to obtain certification as an automobile broker has served as an 54 automobile broker. 55 22. Automobile broker record requirements. a. Automobile brokers shall 56 maintain a permanently bound book in which shall be recorded the make,A. 1932--B 12 1 model, year, color and vehicle identification number of all new motor 2 vehicles for which such broker has provided a service of purchasing, 3 arranging, assisting, facilitating or effecting the purchase or lease of 4 such automobile within any preceding six-year period. Such broker shall 5 also record in such book the name and address of the purchaser or lessor 6 of such automobile, the date of sale or commencement of lease of such 7 automobile and the name and address of the dealer from which the automo- 8 bile was purchased or leased. 9 b. Automobile broker businesses shall maintain a permanently bound 10 book in which shall be recorded all completed orders to search for a new 11 motor vehicle within any preceding six-year period. Such broker shall 12 also record in such book the date of such order, the name and address of 13 the person or entity ordering such search, the automobile specifications 14 provided by such prospective buyer or lessee and the name and address of 15 the dealers solicited for a quote or offer on behalf of such prospective 16 buyer or lessee. 17 c. Such books shall be open for inspection by the commissioner, or his 18 or her agent, during reasonable business hours. The commissioner may 19 establish by rule the form of any such book. 20 d. As an alternative to a bound book, an automobile broker may use a 21 computer and software approved by the department to maintain the records 22 required to be kept by this section, provided all information required 23 by paragraphs a and b of this section are recorded and the records 24 conform to such additional requirements as determined by the commission- 25 er. 26 § 14. Nothing in this act shall be construed to limit, or to enlarge, 27 the protections that 47 U.S.C. § 230 confers on an interactive computer 28 service for content provided by another information content provider, as 29 such terms are defined in 47 U.S.C. § 230. 30 § 15. Severability. If any provision of this act, or any application 31 of any provision of this act, is held to be invalid, that shall not 32 affect the validity or effectiveness of any other provision of this act, 33 or of any other application of any provision of this act, which can be 34 given effect without that provision or application; and to that end, the 35 provisions and applications of this act are severable. 36 § 16. This act shall take effect immediately; provided that all auto- 37 mobile brokers registered on the effective date of this act shall have 38 ninety days to come into compliance with the provisions of this act.
