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A06884 Summary:

BILL NOA06884B
 
SAME ASSAME AS S05380-B
 
SPONSORAbbate
 
COSPNSRHarris, Titone, Cymbrowitz, Cusick, Colton, McDonough, Sepulveda, Weprin, Castorina, Skoufis
 
MLTSPNSR
 
Amd 736, 738, 740-a & 741-a, add 736-a, Gen Bus L; amd 415, V & T L
 
Relates to requiring automobile brokers to be licensed and bonded.
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A06884 Actions:

BILL NOA06884B
 
03/23/2017referred to consumer affairs and protection
06/14/2017amend (t) and recommit to consumer affairs and protection
06/14/2017print number 6884a
06/15/2017amend and recommit to consumer affairs and protection
06/15/2017print number 6884b
06/19/2017reported referred to codes
06/20/2017reported referred to rules
06/20/2017reported
06/20/2017rules report cal.595
06/20/2017ordered to third reading rules cal.595
06/20/2017passed assembly
06/20/2017delivered to senate
06/20/2017REFERRED TO RULES
06/21/2017SUBSTITUTED FOR S5380B
06/21/20173RD READING CAL.1056
06/21/2017PASSED SENATE
06/21/2017RETURNED TO ASSEMBLY
12/06/2017delivered to governor
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A06884 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A6884B
 
SPONSOR: Abbate
  TITLE OF BILL: An act to amend the general business law and the vehi- cle and traffic law, in relation to requiring automobile brokers to be licensed   PURPOSE OR GENERAL IDEA OF BILL: To decrease the incidence of unlawful deceptive practices in the automo- bile broker business by requiring licensure of automobile brokers.   SUMMARY OF PROVISIONS: Section one of this bill amends subdivision 1 of section 736 of the General Business Law to include leasing in the definition of "automobile broker business". Section one also defines what is not considered an automobile broker business. Section two of this bill adds a new 736-a section to General Business Law article 43. New section 736-a requires that any person or entity engaged in the automobile broker business shall be registered. In addi- tion, this section specifies that a certificate of registration for an automobile broker does not permit the registrant to display for sale any new or used motor vehicles without registration as a dealer. Section three of this bill amends paragraphs e,f, and g of subdivision one and subdivision here of section 738 of the General Business Law. Paragraph e is amended to included leased vehicles in the itemized disclosure while paragraph f and g are technical amendments. Section four of this bill amends section 740-a of the General Business Law to provide that automobile broker businesses shall obtain and continue in effect a surety bond in an amount of one hundred twenty five thousand dollars. Section five of this bill amends section 741-a of the General Business Law to specify what automobile broker businesses must disclose to the consumer in any advertisements for their business. Section six of this bill adds a new subdivision 1 of section 415 of the Vehicle and Traffic Law to define an automobile broker business. Section seven of this bill adds a new subdivision 3-a to the Vehicle and Traffic Law that requires automobile brokers to register. Section eight of this bill amends subdivision 5 of Section 415 of the Vehicle and Traffic Law by adding a new paragraph b-2 that specifies what needs to be covered by surety bond issued to the automobile broker business. Section nine of this bill amends paragraph d of subdivision 9 of section 415 of the Vehicle and Traffic Law to add article 35-B of the General Business Law to the enforcement by the Commissioner for violations of provisions of this chapter. Section ten of this bill provides that this act shall take effect on the ninetieth day after it shall have become a law; provided, however, that the secretary of state shall take actions necessary to provide for the issuance of licenses pursuant to section 786-d of the general business law, as added by section two of this act, prior to such date   DIFFERENCE BETWEEN ORIGINAL AND AMENDED VERSION (IF APPLICABLE): Industry recommended insertions and deletions.   JUSTIFICATION: Currently, Article 35-B of the General Business Law provides some regu- lation of the automobile broker business. Unfortunately, the current law does not include licensure requirements. Additionally, the current law does not include people and entities that facilitate leasing agree- ments by obtaining the vehicle, as well as the leasing paperwork, from a licensed automobile dealer, managing the consumer's execution of the lease agreement and paperwork, delivering the vehicle to the consumer and delivering the executed lease agreement and paperwork to the automo- bile dealer who provided the vehicle. This bill includes provisions addressing both of these issues. By addressing these issues, this bill reduces any consumer confusion regarding whether the automobile broker is an authorized representative of an automobile manufacturer and enhances the protection afforded to consumers. This legislation's abili- ty to require the licensure of automobile brokers will better regulate the automobile broker industry. Furthermore allowing the Attorney Gener- al to investigate non-licensed automobile broker businesses will deter unscrupulous brokers from engaging in unlawful practices and taking advantage of New Yorkers.   PRIOR LEGISLATIVE HISTORY: 2016: A.10097 (Abbate) - Referred to Consumer Protection   FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: None.   EFFECTIVE DATE: This act shall take effect on the ninetieth day after it shall have become a law; provided, however, that the secretary of state shall take actions necessary to provide for the issuance of licenses pursuant to section 736-d of the general business law, as added by section two of this act, prior to such date.
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A06884 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         6884--B
 
                               2017-2018 Regular Sessions
 
                   IN ASSEMBLY
 
                                     March 23, 2017
                                       ___________
 
        Introduced  by  M.  of  A.  ABBATE,  HARRIS, TITONE, LENTOL, CYMBROWITZ,
          CUSICK, COLTON, McDONOUGH -- 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  --  committee  discharged,  bill  amended,  ordered  reprinted as
          amended and recommitted to said committee
 
        AN ACT to amend the general business law and  the  vehicle  and  traffic
          law, in relation to requiring automobile brokers to be licensed
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Subdivision 1 of section 736 of the general  business  law,
     2  as  added  by  chapter  616  of  the laws of 1988, is amended to read as
     3  follows:
     4    1. "Automobile broker business" means  any  person  who,  for  a  fee,
     5  commission  or  other valuable consideration, regardless of whether such
     6  fee, commission, or consideration is paid directly by a consumer, offers
     7  to provide, provides, or represents  that  he  or  she  will  provide  a
     8  service  of  purchasing, arranging, assisting, facilitating or effecting
     9  the purchase or lease of an automobile as agent, broker, or intermediary
    10  for a consumer. "Automobile broker business" does not include any person
    11  registered as a dealer pursuant to article sixteen of  the  vehicle  and
    12  traffic  law,  or any person who sells, offers for sale or lease or acts
    13  as agent, broker or intermediary in effecting the purchase or  lease  of
    14  three  or  [less]  fewer  automobiles in any calendar year, or any motor
    15  vehicle franchisor, manufacturer, or distributor registered under  arti-
    16  cle sixteen of the vehicle and traffic law who sells or leases new motor
    17  vehicles  to employees, immediate family members of employees, retirees,
    18  or immediate family members of retirees as authorized by  paragraph  (y)
    19  of  subdivision  two  of section four hundred sixty-three of the vehicle
    20  and traffic law.
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD10395-07-7

        A. 6884--B                          2
 
     1    § 2. The general business law is amended by adding a new section 736-a
     2  to read as follows:
     3    §  736-a. Registration required. 1. No person shall engage in business
     4  as an automobile broker business, as defined in  section  seven  hundred
     5  thirty-six  of  this article, without first having been issued a certif-
     6  icate of registration for an  automobile  broker  business  pursuant  to
     7  paragraph  c of subdivision seven of section four hundred fifteen of the
     8  vehicle and traffic law.
     9    2. A certificate of registration for  an  automobile  broker  business
    10  shall  not permit the registrant to display for sale or lease any new or
    11  used motor vehicles without registration as a dealer under section  four
    12  hundred fifteen of the vehicle and traffic law.
    13    § 3. Paragraphs (e), (f) and (g) of subdivision 1 and subdivision 3 of
    14  section  738 of the general business law, as added by chapter 616 of the
    15  laws of 1988, paragraph (e) of subdivision 1 as amended by  chapter  579
    16  of the laws of 2011, are amended to read as follows:
    17    (e)  A  description  of  any  other services and an itemization of the
    18  charges for each. Such description shall include disclosure of the auto-
    19  mobile dealer from which the automobile was purchased or leased, as well
    20  as all fees, commissions or other valuable  considerations  paid  by  an
    21  automobile  dealer  to  the  automobile  broker  business for [selling,]
    22  arranging, assisting or effecting the sale or lease of an automobile  as
    23  agent,  broker,  or intermediary between the consumer and the automobile
    24  dealer.
    25    (f) If a consumer elects to cancel the contract pursuant to  paragraph
    26  (b)  or  (c)  of this subdivision, he or she shall notify in writing the
    27  automobile broker business at the address specified in the contract. The
    28  automobile broker business shall make a  full  refund  to  the  consumer
    29  within  ten business days following receipt of the request for a refund.
    30  The contract shall contain a statement,  setting  forth  the  consumer's
    31  right to cancel the contract under paragraphs (b) and (c) of this subdi-
    32  vision and the refund obligations of the automobile broker business.
    33    (g)  The  statements  required by paragraphs (a), (b), (c), and (f) of
    34  this subdivision shall be printed in at least ten point bold type.
    35    3. An automobile broker business shall deliver to the consumer or mail
    36  to him or her at the address shown on the  contract,  an  executed  copy
    37  thereof.
    38    §  4.  Subdivision  1 of section 740-a of the general business law, as
    39  added by chapter 579 of the laws of 2011, is amended to read as follows:
    40    1. Automobile broker businesses shall obtain and continue in effect  a
    41  surety  bond in an amount of [seventy-five] one hundred thousand dollars
    42  executed by a surety company authorized  to  transact  business  in  the
    43  state  by  the [insurance] department of financial services of the state
    44  or its successor. The bonds shall be approved as to form by  the  secre-
    45  tary  of  state  and shall be conditioned on the automobile broker busi-
    46  ness' payment of all valid bank drafts, including checks, drawn for  the
    47  purchase  of  motor  vehicles  and  safekeeping of all customer deposits
    48  related to the sale of a motor vehicle between the time  of  receipt  of
    49  such  customer  deposit and the transfer of good title to the vehicle to
    50  the customer.
    51    § 5. Section 741-a of the general business law, as  added  by  chapter
    52  579 of the laws of 2011, is amended to read as follows:
    53    §  741-a.  Advertising. Automobile broker businesses shall clearly and
    54  conspicuously disclose the following in all advertisements in any  medi-
    55  um,  and in any print advertisement such disclosures shall not appear in

        A. 6884--B                          3
 
     1  any footnotes and shall be situated in the top half of any  such  adver-
     2  tisement in an easily readable typeface:
     3    (a) That the automobile broker business is not a [licensed] registered
     4  new  motor vehicle dealer but is a registered automobile broker business
     5  as defined in section four hundred fifteen of the  vehicle  and  traffic
     6  law;
     7    (b)  The  registration number issued to the automobile broker business
     8  pursuant to section four hundred fifteen of the vehicle and traffic law;
     9    (c) Whether any fees may be imposed by the automobile broker  business
    10  for services rendered. Details of such compensation shall be provided by
    11  the automobile broker business upon request by the consumer; and
    12    [(c)]  (d)  That  no  warranty repair services will be provided by the
    13  automobile broker business.
    14    § 6. Subdivision 1 of section 415 of the vehicle and  traffic  law  is
    15  amended by adding a new paragraph m to read as follows:
    16    m.  "Automobile  broker  business" shall have the meaning set forth in
    17  subdivision one of section seven hundred thirty-six of the general busi-
    18  ness law.
    19    § 7. Section 415 of the vehicle and traffic law is amended by adding a
    20  new subdivision 3-a to read as follows:
    21    3-a. Automobile broker business registration. No person  shall  engage
    22  in  the  automobile broker business or represent or advertise that he or
    23  she is engaged or intends to engage in the automobile broker business in
    24  this state, unless there shall have been issued to him or her a  certif-
    25  icate  of  registration  as an automobile broker business by the commis-
    26  sioner under this section pursuant to an  application  for  registration
    27  submitted pursuant to subdivision five of this section.
    28    §  8.  Subdivision  5 of section 415 of the vehicle and traffic law is
    29  amended by adding a new paragraph b-3 to read as follows:
    30    b-3.  In the case of an application for registration as an  automobile
    31  broker  business,  the name and address of the surety company which will
    32  issue the bond required by subdivision  one  of  section  seven  hundred
    33  forty-a  of  the general business law. If the bond is to be issued by an
    34  authorized agent of the surety company licensed by the state,  then  the
    35  name  and  address of that agent may be provided in lieu of the informa-
    36  tion concerning the surety company.
    37    § 9. Paragraph d of subdivision 9 of section 415 of  the  vehicle  and
    38  traffic  law,  as amended by chapter 254 of the laws of 2010, is amended
    39  to read as follows:
    40    d. Has failed to comply with any of the rules and regulations  of  the
    41  commissioner  for  the enforcement of this article or with any provision
    42  of this chapter or article thirty-five-B of  the  general  business  law
    43  applicable thereto; or
    44    §  10.  This  act  shall  take effect on the one hundred eightieth day
    45  after it shall have become a law; provided, however,  that  the  commis-
    46  sioner  of the department of motor vehicles shall take actions necessary
    47  to provide for the issuance of  registration  certificates  pursuant  to
    48  section  415 of the vehicle and traffic law, as amended by sections six,
    49  seven, eight and nine of this act, prior to such date.
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