Bill Text: NY S05485 | 2015-2016 | General Assembly | Amended

---

Bill Title: Requires used motor vehicle dealers to have a $20,000 surety bond if they sell 50 or less cars a year, and a $100,000 surety bond if they sell more than 50 cars a year.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Engrossed - Dead) 2016-06-17 - SUBSTITUTED BY A8166A [S05485 Detail]

Download: New_York-2015-S05485-Amended.html

---

                STATE OF NEW YORK
        ________________________________________________________________________
                                         5485--B
            Cal. No. 1442
                               2015-2016 Regular Sessions
                    IN SENATE
                                      May 14, 2015
                                       ___________
        Introduced  by  Sen.  KLEIN  -- read twice and ordered printed, and when
          printed to be committed to the Committee on Transportation --  commit-
          tee  discharged, bill amended, ordered reprinted as amended and recom-
          mitted to said committee -- recommitted to the Committee on  Transpor-
          tation  in  accordance  with  Senate  Rule  6,  sec.  8  --  committee
          discharged and said bill  committed  to  the  Committee  on  Rules  --
          reported  favorably  from  said committee, ordered to a third reading,
          passed by Senate and delivered to the Assembly, recalled, vote  recon-
          sidered,  restored  to  third  reading, amended and ordered reprinted,
          retaining its place in the order of third reading
        AN ACT to amend the vehicle and traffic law, in relation to surety  bond
          requirements for car dealers
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
     1    Section 1. Paragraphs a and c of subdivision 6-b of section 415 of the
     2  vehicle and traffic law, as amended by chapter 7 of the  laws  of  2000,
     3  paragraph a as further amended by section 104 of part A of chapter 62 of
     4  the laws of 2011, are amended to read as follows:
     5    a.  As a condition to obtaining a registration certificate pursuant to
     6  this section, every new motor vehicle dealer applicant and every  quali-
     7  fied  dealer applicant shall obtain and continue in effect a surety bond
     8  in an amount of fifty thousand dollars  executed  by  a  surety  company
     9  authorized to transact business in the state by the department of finan-
    10  cial  services  of the state. As a condition to obtaining a registration
    11  certificate pursuant to this section,  every  dealer  applicant  who  is
    12  applying  for  a  registration  certificate in the first instance or who
    13  sold [two hundred] fifty motor vehicles or fewer in the previous  calen-
    14  dar  year shall obtain and continue in effect a surety bond in an amount
    15  of [ten] twenty thousand dollars executed by a surety company authorized
    16  to transact business  in  the  state  by  the  department  of  financial
    17  services  of  the  state.  As  a  condition  of obtaining a registration
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD10954-09-6
        S. 5485--B                          2
     1  certificate pursuant to this section, every dealer  applicant  who  sold
     2  more  than  [two  hundred] fifty motor vehicles in the previous calendar
     3  year shall obtain and continue in effect a surety bond in an  amount  of
     4  [twenty-five]  one hundred thousand dollars executed by a surety company
     5  authorized to transact business in the state by the department of finan-
     6  cial services of the state. The bonds shall be approved as  to  form  by
     7  the commissioner and shall be conditioned on the new motor vehicle deal-
     8  er's,  qualified  dealer's,  and  dealer's:  payment  of  all valid bank
     9  drafts, including checks, drawn by such dealer for the purchase of motor
    10  vehicles; transfer of good title  to  each  motor  vehicle  such  dealer
    11  sells;  safekeeping  of  all  customer deposits related to the sale of a
    12  motor vehicle between the time of receipt of such customer  deposit  and
    13  the  transfer  of good title to the vehicle to the customer; payment for
    14  all fines imposed upon the new motor vehicle dealer,  qualified  dealer,
    15  or  dealer  by the commissioner pursuant to the provisions of this chap-
    16  ter; and such dealer's repayment of any overcharges  of  a  customer  by
    17  such  dealer for the vehicle registration and titling charges payable to
    18  the commissioner for registering and titling the sold vehicle. Any  such
    19  dealer  which  is bonded pursuant to this section prior to the effective
    20  date of the chapter of the laws of two thousand  sixteen  which  amended
    21  this  paragraph  shall be required to comply with the amendments made by
    22  such chapter upon renewal, replacement, alteration, or extension of such
    23  dealer's current surety bond.
    24    c. Any surety issuing a bond pursuant to  this  subdivision  shall  be
    25  required  to provide sixty days' notice to the commissioner prior to the
    26  effective date of cancellation or lapse of the bond, and  shall  provide
    27  additional  notice to the commissioner upon the date of the cancellation
    28  or lapse of such bond. Upon the cancellation or lapse of any surety bond
    29  required by this subdivision, the commissioner shall, within  five  days
    30  of  such  cancellation  or  lapse, verify that the dealer holds a surety
    31  bond which meets the requirements of this subdivision.
    32    § 2. This act shall take effect on the one hundred eightieth day after
    33  it shall have become a law.