Bill Text: NY A06655 | 2019-2020 | 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 58-13)
Status: (Introduced - Dead) 2020-02-24 - print number 6655e [A06655 Detail]
Download: New_York-2019-A06655-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 58-13)
Status: (Introduced - Dead) 2020-02-24 - print number 6655e [A06655 Detail]
Download: New_York-2019-A06655-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 6655--A 2019-2020 Regular Sessions IN ASSEMBLY March 14, 2019 ___________ Introduced by M. of A. CARROLL, ABBATE, STIRPE, REYES, DenDEKKER, TAYLOR, CYMBROWITZ, DICKENS, M. G. MILLER, D'URSO, ENGLEBRIGHT, D. ROSENTHAL, GALEF, GOTTFRIED, RAMOS, DeSTEFANO, MIKULIN, SMITH, SAYEGH, WILLIAMS, COOK, ABINANTI, McDONOUGH, QUART, SEAWRIGHT, LiPE- TRI, REILLY, B. MILLER, ROZIC, PALUMBO, EPSTEIN, FERNANDEZ, RYAN, STECK, CRUZ, PHEFFER AMATO, PICHARDO, RAIA, RA, BENEDETTO, BYRNE, JACOBSON, BUCHWALD, HYNDMAN -- Multi-Sponsored by -- M. of A. DE LA ROSA, LAWRENCE, 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 commit- tee AN ACT to amend the vehicle and traffic law and the general business 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 415 of the vehicle and traffic law 2 is amended by adding a new paragraph n to read as follows: 3 n. "New automobile broker business" shall have the same meaning as set 4 forth in subdivision four of section seven hundred thirty-six of the 5 general business law. 6 § 2. Section 736 of the general business law is amended by adding a 7 new subdivision 4 to read as follows: 8 4. "New automobile broker business" means any person who, for a fee, 9 commission or other valuable consideration, regardless of whether such 10 fee, commission or consideration is paid directly by a consumer, offers 11 to provide, provides or represents that he or she will provide a service 12 of purchasing, arranging, assisting, facilitating or effecting the 13 purchase or lease of a previously unregistered automobile; through a new 14 motor vehicle dealer, as agent, broker, or intermediary for a consumer. 15 "New automobile broker business" does not include any person registered 16 as a new vehicle dealer for the new automobile brand or brands for which EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD08916-06-9A. 6655--A 2 1 such services are provided, pursuant to article sixteen of the vehicle 2 and traffic law nor any bona fide employee of such a registered dealer 3 while acting for such dealer. 4 § 3. Subdivision 3-a and paragraph b-3 of subdivision 5 of section 415 5 of the vehicle and traffic law, as added by chapter 477 of the laws of 6 2017, are amended to read as follows: 7 3-a. Automobile broker business [registration] or new automobile 8 broker business. No person shall engage in the automobile broker busi- 9 ness, the new automobile broker business or represent or advertise that 10 he or she is engaged or intends to engage in the automobile broker busi- 11 ness or new automobile broker business in this state, unless there shall 12 have been issued to him or her a certificate of registration as an auto- 13 mobile broker business or new automobile broker business, as the case 14 may be, by the commissioner under this section pursuant to an applica- 15 tion for registration submitted pursuant to subdivision five of this 16 section. The commissioner shall not issue any certificate of registra- 17 tion authorized by this section to any franchisor, manufacturer, 18 distributor, distributor branch or factory branch, as such terms are 19 defined in section four hundred sixty-two of this title, or to any 20 subsidiary, affiliate or controlled entity thereof. 21 b-3. In the case of an application for registration as an automobile 22 broker business or new automobile broker business, the name and address 23 of the surety company which will issue the bond required by subdivision 24 one of section seven hundred forty-a of the general business law and a 25 statement indicating any interest in the applicant's business entity by 26 a person or entity described in paragraph f of subdivision seven of this 27 section. If the bond is to be issued by an authorized agent of the sure- 28 ty company licensed by the state, then the name and address of that 29 agent may be provided in lieu of the information concerning the surety 30 company. 31 § 4. Subdivision 5 of section 415 of the vehicle and traffic law is 32 amended by adding a new paragraph e to read as follows: 33 e. Before application for a new automobile broker business is 34 approved, the applicant must have submitted along with the application, 35 written confirmation from the new motor vehicle manufacturer and/or 36 distributor permitting the applicant to serve as an approved registered 37 broker for the sale or lease, through a new motor vehicle dealer, of a 38 new motor vehicle of the line makes which the applicant proposes to 39 broker from the geographic location described in the application. The 40 geographic location included in the application shall be subject to the 41 provisions of article seventeen-A of this title regarding franchised 42 automobile dealers. 43 § 5. Subdivision 1 of section 736-a of the general business law, as 44 added by chapter 477 of the laws of 2017, is amended and a new subdivi- 45 sion 3 is added to read as follows: 46 1. (a) No person shall engage in business as an automobile broker 47 business or as a new automobile broker business, as such terms are 48 defined in section seven hundred thirty-six of this article, without 49 first having been issued a certificate of registration for an automobile 50 broker business or new automobile broker business pursuant to paragraph 51 c of subdivision seven of section four hundred fifteen of the vehicle 52 and traffic law. A certificate of registration for a new automobile 53 broker business is valid for a period of two years. 54 (b) No new automobile broker business shall represent or accept 55 payment from, either directly or indirectly, a franchisor, manufacturerA. 6655--A 3 1 and/or distributor, as such terms are defined in sections four hundred 2 fifteen and four hundred sixty-two of the vehicle and traffic law. 3 3. The commissioner of motor vehicles shall make necessary rules and 4 regulations as may be appropriate for the proper enforcement of the 5 provisions of this section. 6 § 6. The general business law is amended by adding a new section 741-c 7 to read as follows: 8 § 741-c. Prohibitions related to private information. No person regis- 9 tered under this article shall request, handle, store or transmit the 10 private information, as such term is defined in paragraph (b) of subdi- 11 vision one of section eight hundred ninety-nine-aa of this chapter, of 12 any consumer. 13 § 7. Section 737 of the general business law, as added by chapter 616 14 of the laws of 1988, is amended to read as follows: 15 § 737. Advance fees prohibited. No automobile broker business or new 16 automobile broker business shall solicit, receive or collect from a 17 consumer any fee, or commission, in advance of the performance of those 18 services specified in the contract as required by section seven hundred 19 thirty-eight of this article. 20 § 8. The opening paragraph of subdivision 1 of section 738 of the 21 general business law, as amended by chapter 28 of the laws of 2018, is 22 amended to read as follows: 23 Every contract between a consumer and an automobile broker business, 24 which for the purposes of this section shall include new automobile 25 broker businesses, for the purchase of an automobile shall be in writ- 26 ing, shall be dated, shall contain the street address of the automobile 27 broker business and the consumer and shall be signed by the consumer and 28 by the automobile broker business. Every contract shall comply with the 29 requirements set forth in this section and contain the following: 30 § 9. Section 740 of the general business law, as added by chapter 616 31 of the laws of 1988, is amended to read as follows: 32 § 740. Escrow required for advance payments. All monies paid by a 33 consumer to an automobile broker business or a new automobile broker 34 business in connection with a transaction covered by this article shall 35 be trust funds in the possession of such automobile broker business or 36 new automobile broker business and shall be deposited by it within five 37 days after receipt thereof, in an account in a banking organization 38 within the state. The automobile broker business or new automobile 39 broker business shall thereupon notify in writing the consumer, giving 40 the name and address of the banking organization and the amount deposit- 41 ed. The monies shall be held on deposit until fully applied to the 42 contract price at the time the automobile is delivered to the consumer, 43 unless sooner repaid in accordance with the provisions of this article. 44 § 10. Section 740-a of the general business law, as added by chapter 45 579 of the laws of 2011 and subdivision 1 as amended by chapter 477 of 46 the laws of 2017, is amended to read as follows: 47 § 740-a. Automobile broker business and new automobile broker business 48 surety bond. 1. Automobile broker businesses and new automobile broker 49 businesses shall obtain and continue in effect a surety bond in an 50 amount of one hundred thousand dollars executed by a surety company 51 authorized to transact business in the state by the department of finan- 52 cial services of the state or its successor. The bonds shall be approved 53 as to form by the secretary of state and shall be conditioned on the 54 automobile broker business' or new automobile broker business' payment 55 of all valid bank drafts, including checks, drawn for the purchase of 56 motor vehicles and safekeeping of all customer deposits related to theA. 6655--A 4 1 sale of a motor vehicle between the time of receipt of such customer 2 deposit and the transfer of good title to the vehicle to the customer. 3 2. Recovery against a bond may be made by a person, including the 4 state, who obtains a judgment against the automobile broker business or 5 new automobile broker business for an act or omission on which the bond 6 is conditioned if the act or omission occurred during the term of the 7 bond. The total liability imposed on the surety under this section for 8 all breaches of the bond condition is limited to the face amount of the 9 bond. Such liability may include, but is not limited to, the amount of 10 the valid bank drafts, including checks, drawn by the automobile broker 11 business or new automobile broker business for the purchase of motor 12 vehicles. In no event shall the surety on a bond be liable for total 13 claims in excess of the bond amount, regardless of the number or nature 14 of claims made against the bond or the number of years the bond remained 15 in force. 16 3. Any surety issuing a bond pursuant to this subdivision shall be 17 required to provide sixty days' notice to the secretary of state prior 18 to the effective date of cancellation of the bond. 19 § 11. Section 741 of the general business law, as added by chapter 616 20 of the laws of 1988, is amended to read as follows: 21 § 741. Deceptive acts prohibited. It is hereby declared to be a decep- 22 tive trade practice and unlawful for an automobile broker business or 23 new automobile broker business to misrepresent directly or indirectly in 24 its advertising, promotional materials, sales presentation, or in any 25 manner: 26 1. The nature of the services to be performed and in the case of a new 27 automobile broker that a third party will be paying for any such 28 services; 29 2. The time within which the services will be performed; 30 3. The cost of the services to be performed; [and] 31 4. The ability of the automobile broker business or new automobile 32 broker business to perform the services; and 33 5. That the automobile broker business or new automobile broker busi- 34 ness is affiliated with any automobile manufacturer and/or distributor, 35 provided, however, that a new automobile broker business may state the 36 line makes for which it holds permission pursuant to section four 37 hundred fifteen of the vehicle and traffic law. 38 § 12. Section 741-a of the general business law, as amended by chapter 39 477 of the laws of 2017, is amended to read as follows: 40 § 741-a. Advertising. Automobile broker businesses and new automobile 41 broker businesses shall clearly and conspicuously disclose the following 42 in all advertisements in any medium, and in any print advertisement such 43 disclosures shall not appear in any footnotes and shall be situated in 44 the top half of any such advertisement in an easily readable typeface: 45 (a) That the automobile broker business or new automobile broker busi- 46 ness is not a registered new motor vehicle dealer but is a registered 47 automobile broker business or new automobile broker business as defined 48 in section four hundred fifteen of the vehicle and traffic law; 49 (b) The registration number issued to the automobile broker business 50 or new automobile broker business pursuant to section four hundred 51 fifteen of the vehicle and traffic law; 52 (c) Whether any fees may be imposed by the automobile broker business 53 or new automobile broker business for services rendered. Details of such 54 compensation shall be provided by the automobile broker business or new 55 automobile broker business upon request by the consumer; andA. 6655--A 5 1 (d) That no warranty repair services will be provided by the automo- 2 bile broker business or new automobile broker business. 3 § 13. Section 415 of the vehicle and traffic law is amended by adding 4 a new subdivision 21 to read as follows: 5 21. Penalties and rights of action for failure to obtain a certificate 6 of registration as a new automobile broker pursuant to subdivision 7 three-a and paragraph b-3 of subdivision five of this section. a. The 8 commissioner, or any person designated by him or her, may proceed 9 against a party who has operated as a new automobile broker without 10 certificate of registration in accordance with the provisions of this 11 article, in any one or more proceedings and by order require the offend- 12 ing party to pay the people of this state a penalty in a sum not to 13 exceed two thousand dollars for each violation found to have been 14 committed. Civil penalties assessed under this subdivision shall be paid 15 to the commissioner for deposit into the state treasury, and unpaid 16 civil penalties may be recovered by the commissioner in a civil action 17 in the name of the commissioner. For the purposes of this subdivision, a 18 "violation" shall mean each vehicle sold or leased to a consumer for 19 which the party that failed to obtain certification as a new automobile 20 broker has served as a new automobile broker. 21 b. In addition to any civil action brought by the commissioner or any 22 person appointed by him, any persons injured by any violation of subdi- 23 vision three-a and paragraph b-3 of subdivision five of this section, 24 shall be entitled to sue for and have injunctive relief and damages 25 against, any party in violation of subdivision three-a and paragraph b-3 26 of subdivision five of this section in any court of the state having 27 jurisdiction over the parties. In the case of a new motor vehicle deal- 28 er, injury shall include the sale or lease of a new motor vehicle to a 29 person residing within the relevant market area of such dealer. The term 30 "relevant market area" shall have the same meaning as in subdivision 31 fifteen of section four hundred sixty-two of this title. In any such 32 judicial action or proceeding, the court may award reasonable attorney's 33 fees and costs. 34 § 14. Subdivision 2 of section 463 of the vehicle and traffic law is 35 amended by adding three new paragraphs (ll), (mm) and (nn) to read as 36 follows: 37 (ll) To issue written confirmation to a new automobile broker business 38 permitting such business to serve as an approved registered broker for 39 the sale or lease, through a new motor vehicle dealer, of such manufac- 40 turer's new motor vehicles, unless the manufacturer provides notice 41 pursuant to the terms of this paragraph. All dealers that have a rele- 42 vant market area that encompasses the proposed site shall be entitled to 43 written notice, via certified mail return receipt requested, informing 44 them of the proposed approval of a new automobile broker business. Any 45 new motor vehicle dealer may institute an adjudicatory proceeding or 46 action as provided in section four hundred sixty-nine of this article to 47 protest the issuance of such written confirmation to a new automobile 48 broker business permitting such business to serve as an approved regis- 49 tered broker following receipt of such notice, or following the end of 50 any appeal procedure provided by the manufacturer. In any adjudicatory 51 proceeding or action brought by the dealer, the manufacturer shall have 52 the burden of proving that there exists good cause to permit such new 53 automobile broker business to serve as an approved registered broker and 54 that such permission will not harm the dealer within the relevant market 55 area. Institution of an action pursuant to this paragraph shall serve to 56 stay, without bond, the effectiveness of the written confirmation ofA. 6655--A 6 1 such manufacturer until a final judgment has been rendered in a proceed- 2 ing or action as provided in section four hundred sixty-nine of this 3 article. A manufacturer shall not issue written confirmation permitting 4 a new automobile broker business to serve as an approved registered 5 broker to any person or entity which has been cited for any violation of 6 article thirty-five-B of the general business law, or which has a busi- 7 ness relationship with any new franchised motor vehicle dealer not 8 licensed to operate as a new motor vehicle dealer within the state, or 9 does not have a relevant market area that includes any portion of the 10 state. For the purposes of this paragraph "business relationship" shall 11 mean activity that includes paying a new automobile broker business by a 12 new motor vehicle dealer not licensed to operate as a new motor vehicle 13 dealer within the state, or does not have a relevant market area that 14 includes any portion of the state in connection with the sale or leader 15 of a new motor vehicle. 16 (mm) To issue written confirmation to a new automobile broker business 17 that permits such business to serve as an approved registered broker for 18 a period exceeding two years. 19 (nn) For incentive payments, bonuses, holdbacks or similar payments 20 related to the sale or lease of a new motor vehicle that has been 21 arranged, assisted, facilitated or effected in a particular relevant 22 market area, to deny a franchised motor vehicle dealer located in such 23 relevant market area a payment of equal value as has been awarded to 24 another franchised motor vehicle dealer. Nothing in this paragraph shall 25 be construed to authorize any incentive payment, bonus, holdback or 26 similar payment to any automobile broker business or new automobile 27 broker business, as such terms are defined in section seven hundred 28 thirty-six of the general business law. 29 § 15. Section 465 of the vehicle and traffic law is amended by adding 30 a new subdivision 8 to read as follows: 31 8. A new vehicle manufacturer shall require its franchisees to main- 32 tain a record of all sales or leases arranged, assisted, facilitated or 33 effected by each new automobile broker business to which it has provided 34 written confirmation permitting it to serve as a new automobile broker 35 business, as such term is defined in section seven hundred thirty-six of 36 the general business law. New vehicle manufacturers shall further main- 37 tain a record of all incentives paid to any franchisee attributable to 38 any sale or lease that has been arranged, assisted, facilitated or 39 effected by a new automobile broker business. For sales or leases 40 arranged, assisted, facilitated or effected by any new automobile broker 41 business operating or based in a particular relevant market area, a new 42 vehicle manufacturer shall furnish a record of incentives paid to any 43 franchisee attributable to any such sales or leases to the franchisee 44 operating or based within any such relevant market area. 45 § 16. This act shall take effect immediately; provided that all auto- 46 mobile brokers registered on the effective date of this act shall have 47 ninety days to come into compliance with the provisions of this act.
