Bill Text: NY A06655 | 2019-2020 | General Assembly | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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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

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                STATE OF NEW YORK
        ________________________________________________________________________

                                         6655--C

                               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,  PERRY, THIELE, SOLAGES, LAVINE, STERN,
          GARBARINO, GRIFFIN -- Multi-Sponsored  by  --  M.  of  A.  DE LA ROSA,
          FITZPATRICK,  HEVESI, 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
          committee -- again  reported  from  said  committee  with  amendments,
          ordered  reprinted  as  amended  and  recommitted to said committee --
          committee discharged, bill amended, ordered reprinted as  amended  and
          recommitted to said committee

        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. Paragraph a of subdivision 1 of section 415 of the vehicle
     2  and traffic law, as amended by chapter 554  of  the  laws  of  2015,  is
     3  amended and a new paragraph n is added to read as follows:
     4    a.  "Dealer" means a person engaged in the business of buying, selling
     5  or dealing in motor vehicles, motorcycles or trailers, other than mobile
     6  homes or manufactured homes, at retail or  wholesale;  except,  however,
     7  trailers  with  an  unladen weight of less than one thousand pounds. For
     8  the purposes of this section, a "mobile  home"  or  "manufactured  home"
     9  means  a  mobile  home  or  manufactured  home as defined in section one
    10  hundred twenty-two-c of this chapter. Any person who  sells,  or  offers
    11  for sale or lease more than five motor vehicles, motorcycles or trailers
    12  in  any calendar year or who displays or permits the display of three or

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD08916-13-9
        A. 6655--C                          2

     1  more motor vehicles, motorcycles or trailers for sale at any one time or
     2  within any one calendar month upon premises owned or controlled  by  him
     3  or  her, if such vehicles were purchased, acquired or otherwise obtained
     4  by  such person for the purpose of resale, will be regarded as a dealer.
     5  For the purposes of this section,  "offers  for  sale  or  lease"  shall
     6  include,  but  not be limited to, the act of drawing the public's atten-
     7  tion to, or the presentation or display of any motor vehicle,  including
     8  the  posting  of  images  of any such vehicle, together with an offer to
     9  provide, the provision of, or a  representation  that  such  person  may
    10  provide a service of arranging, assisting, facilitating or effecting the
    11  lease  of such new motor vehicle, except this meaning shall not apply to
    12  any activity of a cooperative or other advertising program  or  fund  as
    13  described  in  any franchise, as such term is defined by subdivision six
    14  of section four hundred sixty-two of this  title.  Except  as  otherwise
    15  provided  in subdivisions three, five, six-b, and seven of this section,
    16  the term "dealer" shall include a "new motor vehicle dealer" as  defined
    17  by  paragraph  f of this subdivision and a "qualified dealer" as defined
    18  in paragraph g of this subdivision.
    19    n. "New automobile broker business" shall have the same meaning as set
    20  forth in subdivision four of section seven  hundred  thirty-six  of  the
    21  general business law.
    22    §  2. Section 736 of the general business law is amended by adding two
    23  new subdivisions 4 and 5 to read as follows:
    24    4. "New automobile broker business" means any person who, for  a  fee,
    25  commission  or  other valuable consideration, regardless of whether such
    26  fee, commission or consideration is paid directly by a consumer,  offers
    27  to provide, provides or represents that he or she will provide a service
    28  of  purchasing,  arranging,  assisting,  facilitating  or  effecting the
    29  purchase or lease of a previously unregistered automobile; through a new
    30  motor vehicle dealer, as agent, broker, or intermediary for a  consumer.
    31  "New  automobile broker business" does not include any person registered
    32  as a new vehicle dealer for the new automobile brand or brands for which
    33  such services are provided, pursuant to article sixteen of  the  vehicle
    34  and  traffic  law nor any bona fide employee of such a registered dealer
    35  while acting for such dealer, nor any motor vehicle franchisor, manufac-
    36  turer or distributor for the new automobile brand or  brands  for  which
    37  such services are provided.
    38    5.  Notwithstanding  any  other subdivision of this section, the terms
    39  "automobile broker business" and "new automobile broker business"  shall
    40  not include any entity that provides a service of purchasing, arranging,
    41  assisting,  facilitating, or effecting the purchase or lease of a previ-
    42  ously unregistered automobile as an agent, broker, or intermediary for a
    43  consumer, if that entity facilitates the purchase  or  lease  of  a  new
    44  motor  vehicle in this state from a new motor vehicle dealer by means of
    45  an online new automobile referral service.  For  the  purposes  of  this
    46  subdivision, "online new automobile referral service" means an organiza-
    47  tion,  including,  but  not  limited to a corporation, limited liability
    48  company, partnership, sole proprietor, or any other entity, that:
    49    (a) operates an interactive website and/or smartphone application that
    50  facilitates the provision of services or consummation of transactions by
    51  marketplace entities and persons seeking such services  or  transactions
    52  on  a  digital platform specifically designed and built for online motor
    53  vehicle lease transactions;
    54    (b) lists motor vehicles provided by multiple new motor vehicle  deal-
    55  ers in this state;
        A. 6655--C                          3

     1    (c)  provides  services, or the transactions facilitated thereby, on a
     2  multi-state basis; and
     3    (d)  involves  no in-person meeting as between a prospective lessee or
     4  purchaser and the operator of such interactive website and/or smartphone
     5  application.
     6    § 3. Subdivision 3-a and paragraph b-3 of subdivision 5 of section 415
     7  of the vehicle and traffic law, as added by chapter 477 of the  laws  of
     8  2017, are amended to read as follows:
     9    3-a.  Automobile  broker  business  [registration]  or  new automobile
    10  broker business.  a. No person shall engage  in  the  automobile  broker
    11  business,  the  new automobile broker business or represent or advertise
    12  that he or she is engaged or intends to engage in the automobile  broker
    13  business  or  new automobile broker business in this state, unless there
    14  shall have been issued to him or her a certificate of registration as an
    15  automobile broker business or new automobile  broker  business,  as  the
    16  case  may  be,  by  the  commissioner  under this section pursuant to an
    17  application for registration submitted pursuant to subdivision  five  of
    18  this section.
    19    b.  The  commissioner  shall not issue any certificate of registration
    20  authorized by this subdivision to any  dealer,  franchisee,  franchisor,
    21  manufacturer, distributor, distributor branch or factory branch, as such
    22  terms are defined in section four hundred sixty-two of this title, or to
    23  any subsidiary, affiliate or controlled entity thereof.
    24    c.  As  a condition of any certificate of registration issued pursuant
    25  to this subdivision, a new automobile broker business  shall  have,  and
    26  continuously  maintain,  a  place of business in this state for which it
    27  shall keep and maintain evidence that all necessary approvals,  licenses
    28  and/or  permits  have  been  obtained from all local governing bodies to
    29  operate such place of business with customer or client traffic.
    30    d. Every  registered  new  automobile  broker  shall  prominently  and
    31  conspicuously  post, in such a manner that it is likely to be noticeable
    32  to anyone entering its premises, its official  business  certificate  of
    33  registration and a sign, which sign shall clearly state:
    34    "(Name  of  registered  new automobile broker) is not a franchised new
    35  motor vehicle dealership.  We  are  not  authorized  or  approved  by  a
    36  manufacturer or distributor to sell a motor vehicle or perform recall or
    37  original  factory  warranty  work. If you order a search for a new motor
    38  vehicle from this broker, we must make a bona  fide  effort  to  solicit
    39  bids  from  at  least three unaffiliated new motor vehicle dealers for a
    40  new motor vehicle on your behalf, including from your local dealer."
    41    e. A new automobile  broker  business  shall  not  provide,  offer  to
    42  provide,  or represent that he or she will provide a service of purchas-
    43  ing, arranging, assisting, facilitating or  effecting  the  purchase  or
    44  lease  of  a previously unregistered automobile with a dealer located in
    45  any other state unless such state affords  lawful  means  for  the  same
    46  business  activity,  such  standards  and requirements are equivalent to
    47  those contained in this article and article thirty-five-B of the general
    48  business law, the new automobile broker business is registered,  permit-
    49  ted  or  licensed  to perform such business activity in such other state
    50  and is otherwise in good standing with each governmental agency of  such
    51  other  state  responsible  for  regulating  such  business activity. The
    52  commissioner of motor vehicles  shall  be  empowered  to  determine  the
    53  substantial  equivalence  of  such  other  state  laws pertaining to the
    54  registration, permitting or licensure of such businesses.
    55    f. Nothing in this subdivision shall be construed to prohibit a  fran-
    56  chisor, manufacturer, or distributor from sponsoring activities intended
        A. 6655--C                          4

     1  to  generate  leads toward the sale or lease of a new motor vehicle by a
     2  franchisee.
     3    b-3.  In  the case of an application for registration as an automobile
     4  broker business or new automobile broker business, the name and  address
     5  of  the surety company which will issue the bond required by subdivision
     6  one of section seven hundred forty-a of the general business law  and  a
     7  statement  indicating any interest in the applicant's business entity by
     8  a person or entity described in paragraph  (f)  of  subdivision  one  or
     9  paragraph  f  of subdivision seven of this section. If the bond is to be
    10  issued by an authorized agent of the  surety  company  licensed  by  the
    11  state,  then  the name and address of that agent may be provided in lieu
    12  of the information concerning the surety company.
    13    § 4. Subdivision 1 of section 736-a of the general  business  law,  as
    14  added  by chapter 477 of the laws of 2017, is amended and a new subdivi-
    15  sion 3 is added to read as follows:
    16    1. (a) No person shall engage in  business  as  an  automobile  broker
    17  business  or  as  a  new  automobile  broker business, as such terms are
    18  defined in section seven hundred thirty-six  of  this  article,  without
    19  first having been issued a certificate of registration for an automobile
    20  broker  business or new automobile broker business pursuant to paragraph
    21  c of subdivision seven of section four hundred fifteen  of  the  vehicle
    22  and  traffic  law.  A  certificate  of registration for a new automobile
    23  broker business is valid for a period of two years.
    24    (b) No new  automobile  broker  business  shall  represent  or  accept
    25  payment from, either directly or indirectly, a franchisee, dealer, fran-
    26  chisor,  manufacturer  and/or  distributor, as such terms are defined in
    27  sections four hundred fifteen and four hundred sixty-two of the  vehicle
    28  and traffic law.
    29    (c) No new automobile broker business shall provide, offer to provide,
    30  or  represent  that  he  or  she  will  provide a service of purchasing,
    31  arranging, assisting, facilitating or effecting the purchase or lease of
    32  a previously unregistered automobile with a dealer located in any  other
    33  state  unless  such  state  affords  lawful  means for the same business
    34  activity, such standards and requirements set forth in the laws of  such
    35  other  state  are equivalent to those contained in this article, the new
    36  automobile broker business has been registered, permitted or licensed to
    37  perform such business activity in such other state and is  otherwise  in
    38  good standing with each agency of such other state responsible for regu-
    39  lating  such business activity. The commissioner of motor vehicles shall
    40  be empowered to determine the  substantial  equivalence  of  such  other
    41  state  laws  pertaining  to  the  regulation  of such business activity,
    42  including consumer protections in any such law.
    43    3. The commissioner of motor vehicles shall make necessary  rules  and
    44  regulations  as  may  be  appropriate  for the proper enforcement of the
    45  provisions of this section.
    46    § 5. The general business law is amended by adding a new section 741-c
    47  to read as follows:
    48    § 741-c. Prohibitions related to private information. No person regis-
    49  tered under this article shall request, receive, accept,  handle,  store
    50  or  transmit  the  private information, as such term is defined in para-
    51  graph (b) of subdivision one of section eight hundred ninety-nine-aa  of
    52  this chapter, of any consumer.
    53    §  6. Section 737 of the general business law, as added by chapter 616
    54  of the laws of 1988, is amended to read as follows:
    55    § 737. Advance fees prohibited. No automobile broker business  or  new
    56  automobile  broker  business  shall  solicit,  receive or collect from a
        A. 6655--C                          5

     1  consumer any fee, or commission, in advance of the performance of  those
     2  services  specified in the contract as required by section seven hundred
     3  thirty-eight of this article.
     4    §  7.  The  opening  paragraph  of subdivision 1 of section 738 of the
     5  general business law, as amended by chapter 28 of the laws of  2018,  is
     6  amended to read as follows:
     7    Every  contract  between a consumer and an automobile broker business,
     8  which for the purposes of this  section  shall  include  new  automobile
     9  broker  businesses,  for the purchase of an automobile shall be in writ-
    10  ing, shall be dated, shall contain the street address of the  automobile
    11  broker business and the consumer and shall be signed by the consumer and
    12  by  the automobile broker business. Every contract shall comply with the
    13  requirements set forth in this section and contain the following:
    14    § 8. Section 740 of the general business law, as added by chapter  616
    15  of the laws of 1988, is amended to read as follows:
    16    §  740.  Escrow  required  for  advance payments. All monies paid by a
    17  consumer to an automobile broker business or  a  new  automobile  broker
    18  business  in connection with a transaction covered by this article shall
    19  be trust funds in the possession of such automobile broker  business  or
    20  new  automobile broker business and shall be deposited by it within five
    21  days after receipt thereof, in an  account  in  a  banking  organization
    22  within  the  state.  The  automobile  broker  business or new automobile
    23  broker business shall thereupon notify in writing the  consumer,  giving
    24  the name and address of the banking organization and the amount deposit-
    25  ed.  The  monies  shall  be  held  on deposit until fully applied to the
    26  contract price at the time the automobile is delivered to the  consumer,
    27  unless sooner repaid in accordance with the provisions of this article.
    28    §  9.  Section  740-a of the general business law, as added by chapter
    29  579 of the laws of 2011 and subdivision 1 as amended by chapter  477  of
    30  the laws of 2017, is amended to read as follows:
    31    § 740-a. Automobile broker business and new automobile broker business
    32  surety  bond.  1. Automobile broker businesses shall obtain and continue
    33  in effect a surety bond in an amount of  one  hundred  thousand  dollars
    34  executed  by  a  surety  company  authorized to transact business in the
    35  state by the department of  financial  services  of  the  state  or  its
    36  successor.    New automobile broker businesses shall obtain and continue
    37  in effect a surety bond in an  amount  of  two  hundred  fifty  thousand
    38  dollars  executed by a surety company authorized to transact business in
    39  the state by the department of financial services of the  state  or  its
    40  successor.  The  bonds  shall be approved as to form by the secretary of
    41  state and shall be conditioned on the automobile broker business' or new
    42  automobile broker business' payment of all valid bank drafts,  including
    43  checks,  drawn for the purchase of motor vehicles and safekeeping of all
    44  customer deposits related to the sale of a  motor  vehicle  between  the
    45  time  of receipt of such customer deposit and the transfer of good title
    46  to the vehicle to the customer.
    47    2. Recovery against a bond may be made  by  a  person,  including  the
    48  state,  who obtains a judgment against the automobile broker business or
    49  new automobile broker business for an act or omission on which the  bond
    50  is  conditioned  if  the act or omission occurred during the term of the
    51  bond. The total liability imposed on the surety under this  section  for
    52  all  breaches of the bond condition is limited to the face amount of the
    53  bond. Such liability may include, but is not limited to, the  amount  of
    54  the  valid bank drafts, including checks, drawn by the automobile broker
    55  business or new automobile broker business for  the  purchase  of  motor
    56  vehicles.  In  no  event  shall the surety on a bond be liable for total
        A. 6655--C                          6

     1  claims in excess of the bond amount, regardless of the number or  nature
     2  of claims made against the bond or the number of years the bond remained
     3  in force.
     4    3.  Any  surety  issuing  a bond pursuant to this subdivision shall be
     5  required to provide sixty days' notice to the secretary of  state  prior
     6  to the effective date of cancellation of the bond.
     7    § 10. Section 741 of the general business law, as added by chapter 616
     8  of the laws of 1988, is amended to read as follows:
     9    §  741. Deceptive acts and frauds prohibited. 1. It is hereby declared
    10  to be a deceptive trade practice and unlawful for an  automobile  broker
    11  business  or  new automobile broker business to misrepresent directly or
    12  indirectly in its advertising, promotional  materials,  sales  presenta-
    13  tion, or in any manner:
    14    [1.] (a) The nature of the services to be performed and in the case of
    15  a  new  automobile broker that a third party will be paying for any such
    16  services;
    17    [2.] (b) The time within which the services will be performed;
    18    [3.] (c) The cost of the services to be performed; [and
    19    4.] (d) The ability of the automobile broker business or  new  automo-
    20  bile broker business to perform the services; and
    21    (e) That the automobile broker business or new automobile broker busi-
    22  ness  is affiliated with any automobile manufacturer and/or distributor,
    23  including the use of any trademarks or copyrighted material without  the
    24  express, written consent of the owner of such material.
    25    2. It shall be a fraudulent business practice for an automobile broker
    26  business  or  new  automobile broker business to refuse to disclose to a
    27  motor vehicle dealer or new motor vehicle dealer the registration number
    28  provided by the department of motor vehicles pursuant  to  section  four
    29  hundred  fifteen  of  the vehicle and traffic law. Furthermore, it shall
    30  also be a fraudulent business practice for an automobile broker business
    31  or new automobile broker business to make  any  misrepresentation  to  a
    32  motor vehicle dealer or new motor vehicle dealer regarding the eligibil-
    33  ity  of  any  consumer  for  any  discounts,  reductions  or any benefit
    34  programs regarding the sale or lease of a motor vehicle.
    35    3. It shall be a fraudulent business practice  for  a  new  automobile
    36  broker business to fail to make a bona fide attempt to obtain a quote or
    37  offer  from  at least three unaffiliated dealers on behalf of a prospec-
    38  tive buyer or lessee for a vehicle  meeting  the  prospective  buyer  or
    39  lessee's  specifications, including the new motor vehicle dealer located
    40  in closest proximity  to  the  address  of  such  prospective  buyer  or
    41  lessee's  home  or,  in the case of any entity, its place of doing busi-
    42  ness.
    43    4. It shall be a fraudulent business practice  for  a  new  automobile
    44  broker  business to fail to act for the benefit of the prospective buyer
    45  or lessee, including by failing to make reasonable efforts to obtain the
    46  lowest possible price, down  payment,  number  of  payments,  amount  of
    47  payments,  finance charges, annual percentage rate and/or fees for a new
    48  motor vehicle that meets the specifications of such prospective buyer or
    49  lessee.
    50    § 11. Section 741-a of the general business law, as amended by chapter
    51  477 of the laws of 2017, is amended to read as follows:
    52    § 741-a. Advertising. Automobile broker businesses and new  automobile
    53  broker businesses shall clearly and conspicuously disclose the following
    54  in all advertisements in any medium, and in any print advertisement such
    55  disclosures  shall  not appear in any footnotes and shall be situated in
    56  the top half of any such advertisement in an easily readable typeface:
        A. 6655--C                          7

     1    (a) That the automobile broker business or new automobile broker busi-
     2  ness is not a registered new motor vehicle dealer but  is  a  registered
     3  automobile  broker business or new automobile broker business as defined
     4  in section four hundred fifteen of the vehicle and traffic law;
     5    (b)  The  registration number issued to the automobile broker business
     6  or new automobile broker  business  pursuant  to  section  four  hundred
     7  fifteen of the vehicle and traffic law;
     8    (c)  Whether any fees may be imposed by the automobile broker business
     9  or new automobile broker business for services rendered. Details of such
    10  compensation shall be provided by the automobile broker business or  new
    11  automobile broker business upon request by the consumer; and
    12    (d)  That  no warranty repair services will be provided by the automo-
    13  bile broker business or new automobile broker business.
    14    § 12. Section 741-b of the general business law, as added  by  chapter
    15  28 of the laws of 2018, is amended to read as follows:
    16    §  741-b.  [Disclosure] Disclosures. 1.  An automobile broker business
    17  or new automobile broker business shall provide a disclosure at the time
    18  such automobile broker business or new automobile broker business  takes
    19  an  order  to  search  for  a  leased  or  purchased vehicle meeting the
    20  prospective buyer or  lessee's  specifications.  Such  disclosure  shall
    21  provide  the amount of any fees, commissions or other valuable consider-
    22  ation the automobile broker business or new automobile  broker  business
    23  expects  to  receive  for  any assistance the automobile broker business
    24  provides in effecting the lease or purchase transaction,  including  any
    25  reasonably  foreseeable fees or charges, including delivery fees. In the
    26  case of an automobile broker business this shall include, if known,  any
    27  payments  from  a  dealer,  lessor or any other person or entity for any
    28  assistance the automobile broker  business  provides  in  effecting  the
    29  lease  or  purchase transaction. If the amount of any such fees, commis-
    30  sions or other valuable consideration  the  automobile  broker  business
    31  expects  to  receive  is unknown at the time of the required disclosure,
    32  the automobile broker business shall disclose:  (a)  whether  it  has  a
    33  contract  with  any dealer, lessor or any other person or entity for the
    34  provision of assistance in effecting a lease transaction; and (b) wheth-
    35  er the automobile broker business may  be  compensated  by  the  dealer,
    36  lessor  or  any  other  person or entity for any assistance in effecting
    37  such lease transaction.  Nothing in this subdivision shall be  construed
    38  to permit the payment of any fees, commissions or other valuable consid-
    39  eration to a new automobile broker business by any dealer.
    40    2.  A  new  automobile  broker  business  shall  provide an additional
    41  disclosure at the time such new  automobile  broker  business  takes  an
    42  order  to search for a vehicle meeting the prospective buyer or lessee's
    43  specifications. Such additional disclosure shall state that  the  broker
    44  shall  make  a bona fide attempt to obtain a bid, quote or offer from at
    45  least three unaffiliated dealers on behalf of the prospective  buyer  or
    46  lessee  for a vehicle meeting the prospective buyer or lessee's specifi-
    47  cations, including from the new motor vehicle dealer of such  line  make
    48  located  closest  to  the  home or place of business of such prospective
    49  buyer and that the new automobile broker has a duty to act for the bene-
    50  fit of the prospective buyer or lessee, including by  making  reasonable
    51  efforts  to  obtain  the  lowest possible price, down payment, number of
    52  payments, amount of payments, finance charges,  annual  percentage  rate
    53  and/or fees.
    54    3.  Each  disclosure required by this section shall be acknowledged in
    55  writing by each respective prospective buyer or lessee.
        A. 6655--C                          8

     1    § 13. Section 742 of the general business law, as added by chapter 616
     2  of the laws of 1988, is amended to read as follows:
     3    §  742.  Action  for  recovery  of  damages  by consumer. Any consumer
     4  injured by a violation of this article or by the breach by an automobile
     5  broker business or new automobile broker business of  a  contract  which
     6  has  been  entered into pursuant to section seven hundred thirty-nine of
     7  this article may bring an action for recovery of damages. Judgment shall
     8  be entered in favor of a consumer in an amount not to exceed three times
     9  the actual damages, but in no case less than  the  amount  paid  by  the
    10  buyer  to  the automobile broker business or new automobile broker busi-
    11  ness.  The court may award reasonable attorney's fees  to  a  prevailing
    12  plaintiff.
    13    §  14.  Section 743 of the general business law, as amended by chapter
    14  372 of the laws of 2016, is amended to read as follows:
    15    § 743. Enforcement [by]. 1. By attorney general. In  addition  to  the
    16  other  remedies  provided,  whenever  there shall be a violation of this
    17  article, application may be made by the attorney general in the name  of
    18  the  people of the state of New York to a court or justice having juris-
    19  diction by a special proceeding to issue an injunction, and upon  notice
    20  to  the defendant of not less than five days, to enjoin and restrain the
    21  continuance of such violations; and if it shall appear to the  satisfac-
    22  tion  of  the court or justice that the defendant has, in fact, violated
    23  this article, an injunction may be issued  by  such  court  or  justice,
    24  enjoining and restraining any further violation, without requiring proof
    25  that  any  person  has, in fact, been injured or damaged thereby. In any
    26  such proceeding, the court may make allowances to the  attorney  general
    27  as  provided in paragraph six of subdivision (a) of section eighty-three
    28  hundred three of the civil practice law and rules, and  direct  restitu-
    29  tion.  Whenever the court shall determine that a violation of this arti-
    30  cle has occurred, the court shall impose a civil  penalty  of  not  less
    31  than  one  thousand dollars and not more than three thousand dollars for
    32  each violation. In the case of an automobile broker, not less  than  one
    33  thousand  dollars  and  not  more  than  three thousand dollars for each
    34  violation; and in the case of a new automobile  broker,  not  less  than
    35  four  thousand  dollars  and not more than ten thousand dollars for each
    36  violation.  In connection with any such proposed application, the attor-
    37  ney general is authorized to take proof and make a determination of  the
    38  relevant facts and to issue subpoenas in accordance with the civil prac-
    39  tice law and rules.
    40    In connection with any such proposed application, the attorney general
    41  is  authorized  to  take  proof and make a determination of the relevant
    42  facts and to issue subpoenas in accordance with the civil  practice  law
    43  and rules.
    44    2. By local authorities. a. Municipalities may, pursuant to local law,
    45  act  upon  the  business  activity  that is the subject of this article,
    46  provided that no  local  government  may  diminish  the  protections  or
    47  requirements of this article or prevent enforcement of its provisions by
    48  appropriate state officials.
    49    b.  The  provisions of this article may be enforced in the same manner
    50  as set forth in subdivision one of this section by  the  director  of  a
    51  municipal consumer affairs office or a business integrity commission, or
    52  by the town attorney, city corporation counsel, or other lawfully desig-
    53  nated enforcement officer of a municipality or local government, and all
    54  monies  collected  thereunder  shall be retained by such municipality or
    55  local government, provided that no local government may prevent enforce-
    56  ment of its provisions by appropriate state officials.
        A. 6655--C                          9

     1    3. By private party. Any persons injured  by  any  violation  of  this
     2  article may bring an action in his or her own name against an automobile
     3  broker  business  or  a  new  automobile  broker business to enjoin such
     4  unlawful act or practice, an action to recover his or her actual damages
     5  and statutory damages of four thousand dollars, or both such actions. In
     6  the case of a new motor vehicle dealer, injury shall include depriving a
     7  new  motor  vehicle  dealer located closest to a lessee or purchaser the
     8  opportunity to bid on such lease or purchase as entitled by  this  arti-
     9  cle.  Damages  shall  include  the value of incentive payments, bonuses,
    10  holdbacks or similar payments that would have been realized had a lessee
    11  or purchaser purchased or leased such vehicle from the new motor vehicle
    12  dealer in closest proximity to such lessee  or  purchaser  but  for  the
    13  actions  of a person who knowingly aided the violation of the provisions
    14  of this article. Nothing in this section  shall  require  a  franchisor,
    15  manufacturer, or distributor to grant a new motor vehicle dealer a bene-
    16  fit  under an incentive, bonus, holdback or similar payment that the new
    17  motor vehicle dealer did not earn or for which the new motor dealer  did
    18  not  complete or qualify. In any such judicial action or proceeding, the
    19  court may award reasonable attorney's fees and costs.  Such actions  may
    20  be  brought  regardless  of  whether  or not the underlying violation is
    21  consumer-oriented or  has  a  public  impact.  The  court  may,  in  its
    22  discretion, increase the award of damages if the court finds the defend-
    23  ant  willfully or knowingly violated this section. The court shall award
    24  reasonable attorney's fees and costs to a prevailing plaintiff.
    25    § 15. Section 415 of the vehicle and traffic law is amended by  adding
    26  two new subdivisions 21 and 22 to read as follows:
    27    21. Penalties and rights of action for failure to obtain a certificate
    28  of  registration  as  a  new  automobile  broker pursuant to subdivision
    29  three-a and paragraph b-3 of subdivision five of this  section.  a.  The
    30  commissioner,  or  any  person  designated  by  him  or her, may proceed
    31  against a party who has operated as  a  new  automobile  broker  without
    32  certificate  of  registration  in accordance with the provisions of this
    33  article, in any one or more proceedings and by order require the offend-
    34  ing party to pay the people of this state a penalty  in  a  sum  not  to
    35  exceed  two  thousand  dollars  for  each  violation  found to have been
    36  committed. Civil penalties assessed under this subdivision shall be paid
    37  to the commissioner for deposit into  the  state  treasury,  and  unpaid
    38  civil  penalties  may be recovered by the commissioner in a civil action
    39  in the name of the commissioner. For the purposes of this subdivision, a
    40  "violation" shall mean each vehicle sold or leased  to  a  consumer  for
    41  which  the party that failed to obtain certification as a new automobile
    42  broker has served as a new automobile broker.
    43    b. In addition to any civil action brought by the commissioner or  any
    44  person  appointed by him, any persons injured by any violation of subdi-
    45  vision three-a and paragraph b-3 of subdivision five  of  this  section,
    46  shall  be  entitled  to  sue  for and have injunctive relief and damages
    47  against, any party in violation of subdivision three-a and paragraph b-3
    48  of subdivision five of this section in any court  of  the  state  having
    49  jurisdiction over the parties.  In the case of a new motor vehicle deal-
    50  er,  injury shall include depriving the new motor vehicle dealer located
    51  closest to a lessee or purchaser the opportunity to bid on such lease or
    52  purchase as entitled by this article. Damages shall include the value of
    53  incentive payments, bonuses, holdbacks or similar  payments  that  would
    54  have  been  realized  had a lessee or purchaser purchased or leased such
    55  vehicle from the new motor vehicle dealer in closest proximity  to  such
    56  lessee  or purchaser but for the actions of a person who knowingly aided
        A. 6655--C                         10

     1  the violation of the provisions of this article. Nothing in this  subdi-
     2  vision shall require a franchisor, manufacturer, or distributor to grant
     3  a new motor vehicle dealer a benefit under an incentive, bonus, holdback
     4  or similar payment that the new motor vehicle dealer did not earn or for
     5  which  the  new  motor  dealer  did not complete or qualify. In any such
     6  judicial action or proceeding, the court may award reasonable attorney's
     7  fees and costs.  Such actions may be brought regardless  of  whether  or
     8  not  the  underlying  violation  is  consumer-oriented  or  has a public
     9  impact. The court may, in its discretion, increase the award of  damages
    10  if  the  court  finds the defendant willfully or knowingly violated this
    11  section. The court shall award reasonable attorney's fees and costs to a
    12  prevailing plaintiff.
    13    22. New automobile  broker  record  requirements.  a.  New  automobile
    14  brokers  shall  maintain  a  permanently  bound  book  in which shall be
    15  recorded the make, model, year color and vehicle  identification  number
    16  of  all  previously  unregistered  automobiles for which such broker has
    17  provided a service of purchasing, arranging, assisting, facilitating  or
    18  effecting  the purchase or lease of such automobile within any preceding
    19  six-year period.  Such book shall also have recorded  a  record  of  the
    20  name and address of the purchaser or lessor of such automobile, the date
    21  of  sale  or  commencement  of lease of such automobile and the name and
    22  address of the dealer from which the automobile was purchased or leased.
    23    b. New automobile brokers shall maintain a permanently bound  book  in
    24  which  shall be recorded all completed orders to search for a previously
    25  unregistered automobile. Such book shall also have recorded a record  of
    26  the  date  of  such  order, the name and address of the person or entity
    27  ordering such search, the automobile  specifications  provided  by  such
    28  prospective  buyer  or  lessee  and  the name and address of the dealers
    29  solicited for a quote or offer on behalf of such  prospective  buyer  or
    30  lessee.
    31    c. Such books shall be open for inspection by the commissioner, or his
    32  or  her  agent,  during  reasonable business hours. The commissioner may
    33  establish by rule the form of any such book.
    34    d. As an alternative to a bound book, a new automobile broker may  use
    35  a  computer  and  software  approved  by  the department to maintain the
    36  records required to be kept by this section,  provided  all  information
    37  required  by  paragraphs  a  and  b of this section are recorded and the
    38  records conform to such additional requirements  as  determined  by  the
    39  commissioner.
    40    §  16. Section 465 of the vehicle and traffic law is amended by adding
    41  a new subdivision 8 to read as follows:
    42    8. A franchisor may require a franchisee to submit to a franchisor the
    43  name and registration number of any new automobile broker business  that
    44  arranged, assisted, facilitated or effected the purchase or lease of any
    45  vehicle  from  such  dealer. A franchisor may charge back the franchisee
    46  any sales, advertising or  marketing  incentive  payment  or  any  other
    47  payment or benefit associated with the sale or lease of such vehicle for
    48  failure to submit such information.
    49    §  17.  The  general  business  law is amended by adding a new section
    50  737-a to read as follows:
    51    § 737-a. Bona fide bid soliciting required. 1. In providing a  service
    52  of  purchasing,  arranging,  assisting,  facilitating  or  effecting the
    53  purchase or lease of a previously unregistered automobile, a new automo-
    54  bile broker business shall solicit bids from at least three unaffiliated
    55  new motor vehicle dealers on behalf of a prospective buyer or lessee for
    56  a new motor vehicle meeting the specifications of such prospective buyer
        A. 6655--C                         11

     1  or lessee, including the new motor vehicle  dealer  located  in  closest
     2  proximity to the home address of such prospective buyer or lessee or, in
     3  the case of an entity, its place of doing business.
     4    2.  The commissioner of motor vehicles may adopt rules and regulations
     5  necessary to effectuate the provisions of this section.
     6    § 18. Severability. If any provision of this act, or  any  application
     7  of  any  provision  of  this  act, is held to be invalid, that shall not
     8  affect the validity or effectiveness of any other provision of this act,
     9  or of any other application of any provision of this act, which  can  be
    10  given effect without that provision or application; and to that end, the
    11  provisions and applications of this act are severable.
    12    §  19. This act shall take effect immediately; provided that all auto-
    13  mobile brokers registered on the effective date of this act  shall  have
    14  ninety days to come into compliance with the provisions of this act.