Bill Text: NY S04364 | 2019-2020 | General Assembly | Amended


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: Strong Partisan Bill (Democrat 18-1)

Status: (Introduced) 2019-06-11 - PRINT NUMBER 4364B [S04364 Detail]

Download: New_York-2019-S04364-Amended.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                         4364--B

                               2019-2020 Regular Sessions

                    IN SENATE

                                     March 11, 2019
                                       ___________

        Introduced  by  Sens. THOMAS, BROOKS, COMRIE, GAUGHRAN, GOUNARDES, JACK-
          SON, KAMINSKY, KAPLAN, LANZA, LIU, MAY, METZGER, MYRIE, PERSAUD, SALA-
          ZAR, SAVINO, SEPULVEDA, SKOUFIS, STAVISKY -- read  twice  and  ordered
          printed,  and  when printed to be committed to the Committee on Trans-
          portation -- committee discharged, bill amended, ordered reprinted  as
          amended  and  recommitted to said committee -- reported favorably from
          said committee and committed to the Committee on Finance --  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
    13  more motor vehicles, motorcycles or trailers for sale at any one time or
    14  within any one calendar month upon premises owned or controlled  by  him
    15  or  her, if such vehicles were purchased, acquired or otherwise obtained
    16  by such person for the purpose of resale, will be regarded as a  dealer.
    17  For  the  purposes  of  this  section,  "offers for sale or lease" shall
    18  include, but not be limited to, the act of drawing the  public's  atten-

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD08916-08-9

        S. 4364--B                          2

     1  tion  to, or the presentation or display of any motor vehicle, including
     2  the posting of images of any such vehicle, together  with  an  offer  to
     3  provide,  the  provision  of,  or  a representation that such person may
     4  provide a service of arranging, assisting, facilitating or effecting the
     5  lease  of such new motor vehicle, except this meaning shall not apply to
     6  any activity of a cooperative or other advertising program  or  fund  as
     7  described  in  any franchise, as such term is defined by subdivision six
     8  of section four hundred sixty-two of this  title.  Except  as  otherwise
     9  provided  in subdivisions three, five, six-b, and seven of this section,
    10  the term "dealer" shall include a "new motor vehicle dealer" as  defined
    11  by  paragraph  f of this subdivision and a "qualified dealer" as defined
    12  in paragraph g of this subdivision.
    13    n. "New automobile broker business" shall have the same meaning as set
    14  forth in subdivision four of section seven  hundred  thirty-six  of  the
    15  general business law.
    16    §  2.  Section  736 of the general business law is amended by adding a
    17  new subdivision 4 to read as follows:
    18    4. "New automobile broker business" means any person who, for  a  fee,
    19  commission  or  other valuable consideration, regardless of whether such
    20  fee, commission or consideration is paid directly by a consumer,  offers
    21  to provide, provides or represents that he or she will provide a service
    22  of  purchasing,  arranging,  assisting,  facilitating  or  effecting the
    23  purchase or lease of a previously unregistered automobile; through a new
    24  motor vehicle dealer, as agent, broker, or intermediary for a  consumer.
    25  "New  automobile broker business" does not include any person registered
    26  as a new vehicle dealer for the new automobile brand or brands for which
    27  such services are provided, pursuant to article sixteen of  the  vehicle
    28  and  traffic  law nor any bona fide employee of such a registered dealer
    29  while acting for such dealer.
    30    § 3. Subdivision 3-a and paragraph b-3 of subdivision 5 of section 415
    31  of the vehicle and traffic law, as added by chapter 477 of the  laws  of
    32  2017, are amended to read as follows:
    33    3-a.  Automobile  broker  business  [registration]  or  new automobile
    34  broker business.  a. No person shall engage  in  the  automobile  broker
    35  business,  the  new automobile broker business or represent or advertise
    36  that he or she is engaged or intends to engage in the automobile  broker
    37  business  or  new automobile broker business in this state, unless there
    38  shall have been issued to him or her a certificate of registration as an
    39  automobile broker business or new automobile  broker  business,  as  the
    40  case  may  be,  by  the  commissioner  under this section pursuant to an
    41  application for registration submitted pursuant to subdivision  five  of
    42  this section.
    43    b.  The  commissioner  shall not issue any certificate of registration
    44  authorized by  this  section  to  any  dealer,  franchisee,  franchisor,
    45  manufacturer, distributor, distributor branch or factory branch, as such
    46  terms are defined in section four hundred sixty-two of this title, or to
    47  any subsidiary, affiliate or controlled entity thereof.
    48    c.  As  a condition of any certificate of registration issued pursuant
    49  to this subdivision, a new automobile broker business  shall  have,  and
    50  continuously  maintain,  a  place of business in this state for which it
    51  shall keep and maintain evidence that all necessary approvals,  licenses
    52  and/or  permits  have  been  obtained from all local governing bodies to
    53  operate such place of business with customer or client traffic.
    54    d. Every  registered  new  automobile  broker  shall  prominently  and
    55  conspicuously  post, in such a manner that it is likely to be noticeable

        S. 4364--B                          3

     1  to anyone entering its premises, its official  business  certificate  of
     2  registration and a sign, which sign shall clearly state:
     3    "(Name  of  registered  new automobile broker) is not a franchised new
     4  motor vehicle dealership. We are not authorized  to  perform  recall  or
     5  original  factory  warranty  work. If you order a search for a new motor
     6  vehicle from this broker, we must solicit at least three bona fide  bids
     7  for  a new motor vehicle on your behalf, including from your local deal-
     8  er."
     9    e. A new automobile  broker  business  shall  not  provide,  offer  to
    10  provide,  or represent that he or she will provide a service of purchas-
    11  ing, arranging, assisting, facilitating or  effecting  the  purchase  or
    12  lease  of  a previously unregistered automobile with a dealer located in
    13  any other state unless such state affords  lawful  means  for  the  same
    14  business  activity,  such  standards  and requirements are equivalent to
    15  those contained in this article and article thirty-five-B of the general
    16  business law, the new automobile broker business is registered,  permit-
    17  ted  or  licensed  to perform such business activity in such other state
    18  and is otherwise in good standing with each governmental agency of  such
    19  other  state  responsible  for  regulating  such  business activity. The
    20  commissioner of motor vehicles  shall  be  empowered  to  determine  the
    21  substantial  equivalence  of  such  other  state  laws pertaining to the
    22  registration, permitting or licensure of such businesses.
    23    b-3. In the case of an application for registration as  an  automobile
    24  broker  business or new automobile broker business, the name and address
    25  of the surety company which will issue the bond required by  subdivision
    26  one  of  section seven hundred forty-a of the general business law and a
    27  statement indicating any interest in the applicant's business entity  by
    28  a  person  or  entity  described  in paragraph (f) of subdivision one or
    29  paragraph f of subdivision seven of this section. If the bond is  to  be
    30  issued  by  an  authorized  agent  of the surety company licensed by the
    31  state, then the name and address of that agent may be provided  in  lieu
    32  of the information concerning the surety company.
    33    §  4.  Subdivision  1 of section 736-a of the general business law, as
    34  added by chapter 477 of the laws of 2017, is amended and a new  subdivi-
    35  sion 3 is added to read as follows:
    36    1.  (a)  No  person  shall  engage in business as an automobile broker
    37  business or as a new automobile  broker  business,  as  such  terms  are
    38  defined  in  section  seven  hundred thirty-six of this article, without
    39  first having been issued a certificate of registration for an automobile
    40  broker business or new automobile broker business pursuant to  paragraph
    41  c  of  subdivision  seven of section four hundred fifteen of the vehicle
    42  and traffic law. A certificate of  registration  for  a  new  automobile
    43  broker business is valid for a period of two years.
    44    (b)  No  new  automobile  broker  business  shall  represent or accept
    45  payment from, either directly or indirectly, a franchisee, dealer, fran-
    46  chisor, manufacturer and/or distributor, as such terms  are  defined  in
    47  sections  four hundred fifteen and four hundred sixty-two of the vehicle
    48  and traffic law.
    49    (c) No new automobile broker business shall provide, offer to provide,
    50  or represent that he or  she  will  provide  a  service  of  purchasing,
    51  arranging, assisting, facilitating or effecting the purchase or lease of
    52  a  previously unregistered automobile with a dealer located in any other
    53  state unless such state affords  lawful  means  for  the  same  business
    54  activity,  such standards and requirements set forth in the laws of such
    55  other state are equivalent to those contained in this article,  the  new
    56  automobile broker business has been registered, permitted or licensed to

        S. 4364--B                          4

     1  perform  such  business activity in such other state and is otherwise in
     2  good standing with each agency of such other state responsible for regu-
     3  lating such business activity. The secretary of state shall be empowered
     4  to  determine  the  substantial  equivalence  of  such  other state laws
     5  pertaining to  the  regulation  of  such  business  activity,  including
     6  consumer protections in any such law.
     7    3.  The  commissioner of motor vehicles shall make necessary rules and
     8  regulations as may be appropriate for  the  proper  enforcement  of  the
     9  provisions of this section.
    10    § 5. The general business law is amended by adding a new section 741-c
    11  to read as follows:
    12    § 741-c. Prohibitions related to private information. No person regis-
    13  tered  under  this article shall request, receive, accept, handle, store
    14  or transmit the private information, as such term is  defined  in  para-
    15  graph  (b) of subdivision one of section eight hundred ninety-nine-aa of
    16  this chapter, of any consumer.
    17    § 6. Section 737 of the general business law, as added by chapter  616
    18  of the laws of 1988, is amended to read as follows:
    19    §  737.  Advance fees prohibited. No automobile broker business or new
    20  automobile broker business shall solicit,  receive  or  collect  from  a
    21  consumer  any fee, or commission, in advance of the performance of those
    22  services specified in the contract as required by section seven  hundred
    23  thirty-eight of this article.
    24    §  7.  The  opening  paragraph  of subdivision 1 of section 738 of the
    25  general business law, as amended by chapter 28 of the laws of  2018,  is
    26  amended to read as follows:
    27    Every  contract  between a consumer and an automobile broker business,
    28  which for the purposes of this  section  shall  include  new  automobile
    29  broker  businesses,  for the purchase of an automobile shall be in writ-
    30  ing, shall be dated, shall contain the street address of the  automobile
    31  broker business and the consumer and shall be signed by the consumer and
    32  by  the automobile broker business. Every contract shall comply with the
    33  requirements set forth in this section and contain the following:
    34    § 8. Section 740 of the general business law, as added by chapter  616
    35  of the laws of 1988, is amended to read as follows:
    36    §  740.  Escrow  required  for  advance payments. All monies paid by a
    37  consumer to an automobile broker business or  a  new  automobile  broker
    38  business  in connection with a transaction covered by this article shall
    39  be trust funds in the possession of such automobile broker  business  or
    40  new  automobile broker business and shall be deposited by it within five
    41  days after receipt thereof, in an  account  in  a  banking  organization
    42  within  the  state.  The  automobile  broker  business or new automobile
    43  broker business shall thereupon notify in writing the  consumer,  giving
    44  the name and address of the banking organization and the amount deposit-
    45  ed.  The  monies  shall  be  held  on deposit until fully applied to the
    46  contract price at the time the automobile is delivered to the  consumer,
    47  unless sooner repaid in accordance with the provisions of this article.
    48    §  9.  Section  740-a of the general business law, as added by chapter
    49  579 of the laws of 2011 and subdivision 1 as amended by chapter  477  of
    50  the laws of 2017, is amended to read as follows:
    51    § 740-a. Automobile broker business and new automobile broker business
    52  surety  bond.  1. Automobile broker businesses shall obtain and continue
    53  in effect a surety bond in an amount of  one  hundred  thousand  dollars
    54  executed  by  a  surety  company  authorized to transact business in the
    55  state by the department of  financial  services  of  the  state  or  its
    56  successor.    New automobile broker businesses shall obtain and continue

        S. 4364--B                          5

     1  in effect a surety bond in an  amount  of  two  hundred  fifty  thousand
     2  dollars  executed by a surety company authorized to transact business in
     3  the state by the department of financial services of the  state  or  its
     4  successor.  The  bonds  shall be approved as to form by the secretary of
     5  state and shall be conditioned on the automobile broker business' or new
     6  automobile broker business' payment of all valid bank drafts,  including
     7  checks,  drawn for the purchase of motor vehicles and safekeeping of all
     8  customer deposits related to the sale of a  motor  vehicle  between  the
     9  time  of receipt of such customer deposit and the transfer of good title
    10  to the vehicle to the customer.
    11    2. Recovery against a bond may be made  by  a  person,  including  the
    12  state,  who obtains a judgment against the automobile broker business or
    13  new automobile broker business for an act or omission on which the  bond
    14  is  conditioned  if  the act or omission occurred during the term of the
    15  bond. The total liability imposed on the surety under this  section  for
    16  all  breaches of the bond condition is limited to the face amount of the
    17  bond. Such liability may include, but is not limited to, the  amount  of
    18  the  valid bank drafts, including checks, drawn by the automobile broker
    19  business or new automobile broker business for  the  purchase  of  motor
    20  vehicles.  In  no  event  shall the surety on a bond be liable for total
    21  claims in excess of the bond amount, regardless of the number or  nature
    22  of claims made against the bond or the number of years the bond remained
    23  in force.
    24    3.  Any  surety  issuing  a bond pursuant to this subdivision shall be
    25  required to provide sixty days' notice to the secretary of  state  prior
    26  to the effective date of cancellation of the bond.
    27    § 10. Section 741 of the general business law, as added by chapter 616
    28  of the laws of 1988, is amended to read as follows:
    29    §  741. Deceptive acts and frauds prohibited. 1. It is hereby declared
    30  to be a deceptive trade practice and unlawful for an  automobile  broker
    31  business  or  new automobile broker business to misrepresent directly or
    32  indirectly in its advertising, promotional  materials,  sales  presenta-
    33  tion, or in any manner:
    34    [1.] (a) The nature of the services to be performed and in the case of
    35  a  new  automobile broker that a third party will be paying for any such
    36  services;
    37    [2.] (b) The time within which the services will be performed;
    38    [3.] (c) The cost of the services to be performed; [and
    39    4.] (d) The ability of the automobile broker business or  new  automo-
    40  bile broker business to perform the services; and
    41    (e) That the automobile broker business or new automobile broker busi-
    42  ness  is affiliated with any automobile manufacturer and/or distributor,
    43  including the use of any trademarks or copyrighted material without  the
    44  express, written consent of the owner of such material.
    45    2. It shall be a fraudulent business practice for an automobile broker
    46  business  or  new  automobile broker business to refuse to disclose to a
    47  motor vehicle dealer or new motor vehicle dealer the registration number
    48  provided by the department of motor vehicles pursuant  to  section  four
    49  hundred  fifteen  of  the vehicle and traffic law. Furthermore, it shall
    50  also be a fraudulent business practice for an automobile broker business
    51  or new automobile broker business to make  any  misrepresentation  to  a
    52  motor vehicle dealer or new motor vehicle dealer regarding the eligibil-
    53  ity  of  any  consumer  for  any  discounts,  reductions  or any benefit
    54  programs regarding the sale or lease of a motor vehicle.
    55    3. It shall be a fraudulent business practice  for  a  new  automobile
    56  broker business to fail to make a bona fide attempt to obtain a quote or

        S. 4364--B                          6

     1  offer  from  at least three unaffiliated dealers on behalf of a prospec-
     2  tive buyer or lessee for a vehicle  meeting  the  prospective  buyer  or
     3  lessee's  specifications, including the new motor vehicle dealer located
     4  in  closest  proximity  to  the  address  of  such  prospective buyer or
     5  lessee's home or, in the case of any entity, its place  of  doing  busi-
     6  ness.
     7    4.  It  shall  be  a fraudulent business practice for a new automobile
     8  broker business to fail to act for the benefit of the prospective  buyer
     9  or lessee, including by failing to make reasonable efforts to obtain the
    10  lowest  possible  price,  down  payment,  number  of payments, amount of
    11  payments, finance charges, annual percentage rate and/or fees for a  new
    12  motor vehicle that meets the specifications of such prospective buyer or
    13  lessee.
    14    § 11. Section 741-a of the general business law, as amended by chapter
    15  477 of the laws of 2017, is amended to read as follows:
    16    §  741-a. Advertising. Automobile broker businesses and new automobile
    17  broker businesses shall clearly and conspicuously disclose the following
    18  in all advertisements in any medium, and in any print advertisement such
    19  disclosures shall not appear in any footnotes and shall be  situated  in
    20  the top half of any such advertisement in an easily readable typeface:
    21    (a) That the automobile broker business or new automobile broker busi-
    22  ness  is  not  a registered new motor vehicle dealer but is a registered
    23  automobile broker business or new automobile broker business as  defined
    24  in section four hundred fifteen of the vehicle and traffic law;
    25    (b)  The  registration number issued to the automobile broker business
    26  or new automobile broker  business  pursuant  to  section  four  hundred
    27  fifteen of the vehicle and traffic law;
    28    (c)  Whether any fees may be imposed by the automobile broker business
    29  or new automobile broker business for services rendered. Details of such
    30  compensation shall be provided by the automobile broker business or  new
    31  automobile broker business upon request by the consumer; and
    32    (d)  That  no warranty repair services will be provided by the automo-
    33  bile broker business or new automobile broker business.
    34    § 12. Section 741-b of the general business law, as added  by  chapter
    35  28 of the laws of 2018, is amended to read as follows:
    36    §  741-b.  [Disclosure] Disclosures. 1.  An automobile broker business
    37  or new automobile broker business shall provide a disclosure at the time
    38  such automobile broker business or new automobile broker business  takes
    39  an  order  to  search  for  a  leased  or  purchased vehicle meeting the
    40  prospective buyer or  lessee's  specifications.  Such  disclosure  shall
    41  provide  the amount of any fees, commissions or other valuable consider-
    42  ation the automobile broker business or new automobile  broker  business
    43  expects  to  receive  for  any assistance the automobile broker business
    44  provides in effecting the lease or purchase transaction,  including  any
    45  reasonably  foreseeable fees or charges, including delivery fees. In the
    46  case of an automobile broker business this shall include, if known,  any
    47  payments  from  a  dealer,  lessor or any other person or entity for any
    48  assistance the automobile broker  business  provides  in  effecting  the
    49  lease  or  purchase transaction. If the amount of any such fees, commis-
    50  sions or other valuable consideration  the  automobile  broker  business
    51  expects  to  receive  is unknown at the time of the required disclosure,
    52  the automobile broker business shall disclose:  (a)  whether  it  has  a
    53  contract  with  any dealer, lessor or any other person or entity for the
    54  provision of assistance in effecting a lease transaction; and (b) wheth-
    55  er the automobile broker business may  be  compensated  by  the  dealer,
    56  lessor  or  any  other  person or entity for any assistance in effecting

        S. 4364--B                          7

     1  such lease transaction.  Nothing in this subdivision shall be  construed
     2  to permit the payment of any fees, commissions or other valuable consid-
     3  eration to a new automobile broker business by any dealer.
     4    2.  A  new  automobile  broker  business  shall  provide an additional
     5  disclosure at the time such new  automobile  broker  business  takes  an
     6  order  to search for a vehicle meeting the prospective buyer or lessee's
     7  specifications. Such additional disclosure shall state that  the  broker
     8  shall  make  a bona fide attempt to obtain a bid, quote or offer from at
     9  least three unaffiliated dealers on behalf of the prospective  buyer  or
    10  lessee  for a vehicle meeting the prospective buyer or lessee's specifi-
    11  cations, including from the new motor vehicle dealer of such  line  make
    12  located  closest  to  the  home or place of business of such prospective
    13  buyer and that the new automobile broker has a duty to act for the bene-
    14  fit of the prospective buyer or lessee, including by  making  reasonable
    15  efforts  to  obtain  the  lowest possible price, down payment, number of
    16  payments, amount of payments, finance charges,  annual  percentage  rate
    17  and/or fees.
    18    3.  Each  disclosure required by this section shall be acknowledged in
    19  writing by each respective prospective buyer or lessee.
    20    § 13. Section 742 of the general business law, as added by chapter 616
    21  of the laws of 1988, is amended to read as follows:
    22    § 742. Action for  recovery  of  damages  by  consumer.  Any  consumer
    23  injured by a violation of this article or by the breach by an automobile
    24  broker  business  or  new automobile broker business of a contract which
    25  has been entered into pursuant to section seven hundred  thirty-nine  of
    26  this article may bring an action for recovery of damages. Judgment shall
    27  be entered in favor of a consumer in an amount not to exceed three times
    28  the  actual  damages,  but  in  no case less than the amount paid by the
    29  buyer to the automobile broker business or new automobile  broker  busi-
    30  ness.    The  court may award reasonable attorney's fees to a prevailing
    31  plaintiff.
    32    § 14. Section 743 of the general business law, as amended  by  chapter
    33  372 of the laws of 2016, is amended to read as follows:
    34    §  743.  Enforcement  [by]. 1. By attorney general. In addition to the
    35  other remedies provided, whenever there shall be  a  violation  of  this
    36  article,  application may be made by the attorney general in the name of
    37  the people of the state of New York to a court or justice having  juris-
    38  diction  by a special proceeding to issue an injunction, and upon notice
    39  to the defendant of not less than five days, to enjoin and restrain  the
    40  continuance  of such violations; and if it shall appear to the satisfac-
    41  tion of the court or justice that the defendant has, in  fact,  violated
    42  this  article,  an  injunction  may  be issued by such court or justice,
    43  enjoining and restraining any further violation, without requiring proof
    44  that any person has, in fact, been injured or damaged  thereby.  In  any
    45  such  proceeding,  the court may make allowances to the attorney general
    46  as provided in paragraph six of subdivision (a) of section  eighty-three
    47  hundred  three  of the civil practice law and rules, and direct restitu-
    48  tion. Whenever the court shall determine that a violation of this  arti-
    49  cle  has  occurred,  the  court shall impose a civil penalty of not less
    50  than one thousand dollars and not more than three thousand  dollars  for
    51  each  violation.  In the case of an automobile broker, not less than one
    52  thousand dollars and not more  than  three  thousand  dollars  for  each
    53  violation;  and  in  the  case of a new automobile broker, not less than
    54  four thousand dollars and not more than ten thousand  dollars  for  each
    55  violation.  In connection with any such proposed application, the attor-
    56  ney  general is authorized to take proof and make a determination of the

        S. 4364--B                          8

     1  relevant facts and to issue subpoenas in accordance with the civil prac-
     2  tice law and rules.
     3    In connection with any such proposed application, the attorney general
     4  is  authorized  to  take  proof and make a determination of the relevant
     5  facts and to issue subpoenas in accordance with the civil  practice  law
     6  and rules.
     7    2.  By  local  authorities. Municipalities may, pursuant to local law,
     8  act upon the business activity that is  the  subject  of  this  article,
     9  provided  that  no  local  government  may  diminish  the protections or
    10  requirements of this article or prevent enforcement of its provisions by
    11  appropriate state officials.
    12    3. By private party. Any persons injured  by  any  violation  of  this
    13  article may bring an action in his or her own name to enjoin such unlaw-
    14  ful  act or practice, an action to recover his or her actual damages and
    15  statutory damages of four thousand dollars, or both such actions. In the
    16  case of a new motor vehicle dealer, injury shall include depriving a new
    17  motor vehicle dealer located closest to a lessee or purchaser the oppor-
    18  tunity to bid on such lease or purchase as  entitled  by  this  article.
    19  Damages  shall include incentive payments, bonuses, holdbacks or similar
    20  payments that would  have  been  realized  had  a  lessee  or  purchaser
    21  purchased  or  leased  such vehicle from the new motor vehicle dealer in
    22  closest proximity to such lessee or purchaser but for the actions  of  a
    23  person who knowingly aided the violation of the provisions of this arti-
    24  cle.  In  any  such  judicial  action or proceeding, the court may award
    25  reasonable attorney's fees and costs.    Such  actions  may  be  brought
    26  regardless  of  whether  or not the underlying violation is consumer-or-
    27  iented or has a  public  impact.  The  court  may,  in  its  discretion,
    28  increase the award of damages if the court finds the defendant willfully
    29  or  knowingly  violated  this  section. The court shall award reasonable
    30  attorney's fees and costs to a prevailing plaintiff.
    31    § 15. Section 415 of the vehicle and traffic law is amended by  adding
    32  two new subdivisions 21 and 22 to read as follows:
    33    21. Penalties and rights of action for failure to obtain a certificate
    34  of  registration  as  a  new  automobile  broker pursuant to subdivision
    35  three-a and paragraph b-3 of subdivision five of this  section.  a.  The
    36  commissioner,  or  any  person  designated  by  him  or her, may proceed
    37  against a party who has operated as  a  new  automobile  broker  without
    38  certificate  of  registration  in accordance with the provisions of this
    39  article, in any one or more proceedings and by order require the offend-
    40  ing party to pay the people of this state a penalty  in  a  sum  not  to
    41  exceed  two  thousand  dollars  for  each  violation  found to have been
    42  committed. Civil penalties assessed under this subdivision shall be paid
    43  to the commissioner for deposit into  the  state  treasury,  and  unpaid
    44  civil  penalties  may be recovered by the commissioner in a civil action
    45  in the name of the commissioner. For the purposes of this subdivision, a
    46  "violation" shall mean each vehicle sold or leased  to  a  consumer  for
    47  which  the party that failed to obtain certification as a new automobile
    48  broker has served as a new automobile broker.
    49    b. In addition to any civil action brought by the commissioner or  any
    50  person  appointed by him, any persons injured by any violation of subdi-
    51  vision three-a and paragraph b-3 of subdivision five  of  this  section,
    52  shall  be  entitled  to  sue  for and have injunctive relief and damages
    53  against, any party in violation of subdivision three-a and paragraph b-3
    54  of subdivision five of this section in any court  of  the  state  having
    55  jurisdiction over the parties.  In the case of a new motor vehicle deal-
    56  er,  injury shall include depriving the new motor vehicle dealer located

        S. 4364--B                          9

     1  closest to a lessee or purchaser the opportunity to bid on such lease or
     2  purchase as entitled by this article. Damages  shall  include  incentive
     3  payments,  bonuses,  holdbacks  or similar payments that would have been
     4  realized had a lessee or purchaser purchased or leased such vehicle from
     5  the  new  motor  vehicle  dealer  in closest proximity to such lessee or
     6  purchaser but for the actions  of  a  person  who  knowingly  aided  the
     7  violation of the provisions of this article. In any such judicial action
     8  or proceeding, the court may award reasonable attorney's fees and costs.
     9  Such  actions may be brought regardless of whether or not the underlying
    10  violation is consumer-oriented or has a public impact. The court may, in
    11  its discretion, increase the award of damages if  the  court  finds  the
    12  defendant  willfully or knowingly violated this section. The court shall
    13  award reasonable attorney's fees and costs to a prevailing plaintiff.
    14    22. New automobile  broker  record  requirements.  a.  New  automobile
    15  brokers  shall  maintain  a  permanently  bound  book  in which shall be
    16  recorded the make, model, year color and vehicle  identification  number
    17  of  all  previously  unregistered  automobiles for which such broker has
    18  provided a service of purchasing, arranging, assisting, facilitating  or
    19  effecting  the purchase or lease of such automobile within any preceding
    20  six-year period.  Such book shall also have recorded  a  record  of  the
    21  name and address of the purchaser or lessor of such automobile, the date
    22  of  sale  or  commencement  of lease of such automobile and the name and
    23  address of the dealer from which the automobile was purchased or leased.
    24    b. New automobile brokers shall maintain a permanently bound  book  in
    25  which  shall be recorded all completed orders to search for a previously
    26  unregistered automobile. Such book shall also have recorded a record  of
    27  the  date  of  such  order, the name and address of the person or entity
    28  ordering such search, the automobile  specifications  provided  by  such
    29  prospective  buyer  or  lessee  and  the name and address of the dealers
    30  solicited for a quote or offer on behalf of such  prospective  buyer  or
    31  lessee.
    32    c. Such books shall be open for inspection by the commissioner, or his
    33  or  her  agent,  during  reasonable business hours. The commissioner may
    34  establish by rule the form of any such book.
    35    d. As an alternative to a bound book, a new automobile broker may  use
    36  a  computer  and  software  approved  by  the department to maintain the
    37  records required to be kept by this section,  provided  all  information
    38  required  by  paragraphs  a  and  b of this section are recorded and the
    39  records conform to such additional requirements  as  determined  by  the
    40  commissioner.
    41    §  16. Section 465 of the vehicle and traffic law is amended by adding
    42  a new subdivision 8 to read as follows:
    43    8. A franchisor may require a franchisee to submit to a franchisor the
    44  name and registration number of any new automobile broker business  that
    45  arranged, assisted, facilitated or effected the purchase or lease of any
    46  vehicle  from  such  dealer. A franchisor may charge back the franchisee
    47  any sales, advertising or  marketing  incentive  payment  or  any  other
    48  payment or benefit associated with the sale or lease of such vehicle for
    49  failure to submit such information.
    50    §  17. This act shall take effect immediately; provided that all auto-
    51  mobile brokers registered on the effective date of this act  shall  have
    52  ninety days to come into compliance with the provisions of this act.
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