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A06884 Summary:

BILL NOA06884
 
SAME ASSAME AS UNI. S05380
 
SPONSORAbbate
 
COSPNSRHarris, Titone, Ortiz, Lentol, Cymbrowitz, Cusick, Colton
 
MLTSPNSR
 
Amd 736 & 740-a, ren 744 to be 745, add 736-a, 736-b, 736-c, 736-d, 736-e & 744, Gen Bus L
 
Relates to requiring automobile brokers to be licensed and bonded.
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A06884 Actions:

BILL NOA06884
 
03/23/2017referred to consumer affairs and protection
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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: A6884
 
SPONSOR: Abbate
  TITLE OF BILL: An act to amend the general business law, in relation to requiring auto- mobile 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 adds two new subdivisions, 4 and 5 to define the terms "Commissioner" and "Division." Commissioner shall mean the commissioner of the Department of Motor Vehicles and Division shall mean the Division of Criminal Justice Services. Section two of this bill adds four new sections to General Business Law article 43. New section 736-a requires that any person or entity engaged in the automobile broker business shall be licensed and maintain a sure- ty bond. New section 736-b establishes the application for an automobile broker license. New section 736-c establishes conditions precedent for obtaining a license. New section 736-d describes the license that will be provided and the licensee's obligations when there are any changes to the location or ownership of the licensee. New section 736-f establishes the scope and duties under the Automobile Broker License. Section three of this bill amends General Business Law to renumber section 744 to section 745 and a new section 744 is added. Section 744 provides the Attorney General shall investigate non-licensed automobile broker businesses engaged in the leasing of vehicles and shall make recommendations to the legislature. Section four of this bill amends section 740-a of the General Business Law to provide 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 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 busi- ness law, as added by section two of this act, prior to such date.   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 agreements 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 ability to require the licensure of auto- mobile brokers will better regulate the automobile broker industry. Furthermore allowing the Attorney General to investigate non-licensed automobile broker businesses will deter unscrupulous brokers from engag- ing in unlawful practices and taking advantage of New Yorkers.   PRIOR LEGISLATIVE HISTORY: 2016: S.6704-B/A.1O097 - Passed the Senate/ Referred to Consumer Affairs and Protection   FISCAL IMPLICATIONS: 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
        ________________________________________________________________________
 
            S. 5380                                                  A. 6884
 
                               2017-2018 Regular Sessions
 
                SENATE - ASSEMBLY
 
                                     March 23, 2017
                                       ___________
 
        IN  SENATE -- Introduced by Sen. GOLDEN -- read twice and ordered print-
          ed, and when printed to be committed  to  the  Committee  on  Consumer
          Protection
 
        IN  ASSEMBLY  -- Introduced by M. of A. ABBATE -- read once and referred
          to the Committee on Consumer Affairs and Protection

        AN ACT to amend the general business law, in relation to requiring auto-
          mobile 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  and  two  new
     3  subdivisions 4 and 5 are added to read as follows:
     4    1.  "Automobile  broker  business"  means  any  person who, for a fee,
     5  commission or other valuable consideration paid by a consumer offers  to
     6  provide,  provides,  or  represents  that  he  will provide a service of
     7  purchasing, arranging, assisting, facilitating or effecting the purchase
     8  of an automobile as agent,  broker,  or  intermediary  for  a  consumer.
     9  "Automobile  broker  business" shall also include any person who acts as
    10  an agent, broker or intermediary in  effectuating  or  facilitating  the
    11  lease  of  an  automobile,  regardless  of  whether such person receives
    12  consideration from the consumer. "Automobile broker business"  does  not
    13  include any person registered as a dealer pursuant to article sixteen of
    14  the vehicle and traffic law, or any person who sells, offers for sale or
    15  lease or acts as agent, broker or intermediary in effecting the purchase
    16  or lease of three or less automobiles in any calendar year.
    17    4.  "Commissioner"  means  the commissioner of the department of motor
    18  vehicles.
    19    5. "Division" means the division of criminal justice services.
    20    § 2. The general business law is amended by adding five  new  sections
    21  736-a, 736-b, 736-c, 736-d and 736-e to read as follows:
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD10395-03-7

        S. 5380                             2                            A. 6884
 
     1    § 736-a.  License and surety bond required. 1. No person, corporation,
     2  partnership  or firm shall hereafter carry on the business of an automo-
     3  bile broker, as defined in section  seven  hundred  thirty-six  of  this
     4  article,  without  first having (a) received a license to engage in such
     5  practice  in  the  manner prescribed in this article, and (b) obtained a
     6  surety bond prescribed in section seven hundred forty-a of this article.
     7    2. No person shall own, control or operate, whether as a sole proprie-
     8  tor, partner, shareholder,  officer,  independent  contractor  or  other
     9  person,  an  automobile    broker  business, as defined in section seven
    10  hundred thirty-six of this article, without first having (a) received  a
    11  license  to  engage  in  such  practice in the manner prescribed in this
    12  article, and (b) obtained a surety  bond  prescribed  in  section  seven
    13  hundred forty-a of this article.
    14    §  736-b.  Application  for  licenses.  1.  Application  for a license
    15  required under this article shall be in writing, under oath, and in  the
    16  form prescribed by the commissioner, and shall contain the following:
    17    (a)  The  exact  name and the address of the applicant and its date of
    18  incorporation;
    19    (b) The name and the business and residential address of each  princi-
    20  pal and officer of the applicant;
    21    (c) If the applicant has any common ownership with any new motor vehi-
    22  cle  dealer,  as  defined in section four hundred fifteen of the vehicle
    23  and traffic law, the complete name and address of such dealership;
    24    (d) The complete address where the business of the applicant is to  be
    25  conducted, showing the street and number, if any, post office and build-
    26  ing  and  room  number,  if any, the office building and room number, if
    27  any, and the municipality and county;
    28    (e) If the applicant has one or more branches, subsidiaries or  affil-
    29  iates operating in the state, the complete address of each such place of
    30  business; and
    31    (f)  A  complete  set  of two fingerprint cards for each principal and
    32  officer of the applicant on a standard fingerprint card approved by  the
    33  division  and  a  fee  pursuant  to subdivision eight-a of section eight
    34  hundred thirty-seven of the executive law, and amendments  thereto,  for
    35  the  cost of the division's full search and retain procedures, which fee
    36  shall be remitted by the commissioner to the division for deposit by the
    37  comptroller into the general fund. Before approving such application the
    38  commissioner, or his or her designee, shall forward  one  copy  of  such
    39  fingerprint  card and the processing fee to the division upon receipt of
    40  such fingerprints. The division shall  forward  to  the  commissioner  a
    41  report  with  respect  to  the applicant's previous criminal history, if
    42  any, or a statement that the applicant has no previous criminal  history
    43  according  to  its  files.  If  additional  copies  of  fingerprints are
    44  required, the applicant shall furnish them upon request.
    45    2. Upon original application for a license to  operate  an  automobile
    46  broker  business,  the  applicant  shall pay an application fee, in such
    47  amount as may be determined by the commissioner,  not  to  exceed  three
    48  hundred  dollars.  Upon  application for a license renewal, the licensee
    49  shall pay a renewal processing fee in such amount as shall be determined
    50  by the commissioner, not to exceed three hundred dollars.
    51    § 736-c. Conditions precedent to licensing. Upon filing of an applica-
    52  tion for a license, if the commissioner shall be satisfied of  the  good
    53  character, competency and integrity of the applicant, and of the princi-
    54  pals  and  officers thereof are such as to comply with the provisions of
    55  this article, he or she shall thereupon issue a license in duplicate  to
    56  operate  an automobile broker business in accordance with the provisions

        S. 5380                             3                            A. 6884
 
     1  of this article. The  commissioner  shall  transmit  one  copy  of  such
     2  license  to  the  licensee and file another with the commissioner.  Such
     3  license shall remain in full force and effect for a period of two  years
     4  unless  it  is  surrendered  by  the licensee or revoked or suspended as
     5  hereinafter provided; if the commissioner shall not so find, the commis-
     6  sioner shall not issue such license and the  commissioner  shall  notify
     7  the  applicant  of the denial in writing. The commissioner shall approve
     8  or deny every application for license hereunder within ninety days  from
     9  the filing thereof.
    10    §  736-d.  Licensing.  1. Each license issued under this article shall
    11  state the address or addresses at which the business is to be  conducted
    12  and  shall  state fully the name of the licensee, and the date and place
    13  of its incorporation and the expiration date of the license. A  copy  of
    14  such  license  shall  be prominently posted in each place of business of
    15  the licensee. Such license shall not be transferable or assignable.
    16    2. In the event the location at which the business is to be  conducted
    17  shall  be  changed, the licensee shall forthwith notify the commissioner
    18  in writing, who shall thereupon without charge attach to the  license  a
    19  rider setting forth such changed location.
    20    3. In the event that there shall be any change among the principals or
    21  officers  of  any  licensee,  the  licensee  shall  forthwith notify the
    22  commissioner in writing, of the name and address of each  new  principal
    23  or officer, and shall submit a complete set of two fingerprint cards for
    24  each  such  principal  or  officer  in accordance with the provisions of
    25  paragraph (f) of subdivision one of section seven  hundred  thirty-six-b
    26  of this article.
    27    4. Prior to or upon the sale or transfer of all or the majority of the
    28  stock or assets of any automobile broker business, the new principals or
    29  officers  shall apply for a new license with the commissioner in accord-
    30  ance with the provisions  of  section  seven  hundred  thirty-six-b  and
    31  section  seven  hundred  thirty-six-c  of this article. Such application
    32  shall be made within sixty days of such sale or transfer.
    33    5. A license granted under the  provisions  of  this  article  may  be
    34  renewed  by  the commissioner upon application therefor by the licensee,
    35  in such form as the commissioner may prescribe, accompanied by the  non-
    36  refundable renewal processing fee pursuant to subdivision two of section
    37  seven  hundred thirty-six-b of this article. In no event will renewal be
    38  granted more than six months after the date of expiration of a  license.
    39  No  person, firm, company, partnership or corporation shall carry on any
    40  business subject to this article  during  any  period  which  may  exist
    41  between the date of expiration of a license and the renewal thereof.
    42    §  736-e.  Scope  and  duties under automobile broker license. 1.  The
    43  automobile broker license shall permit a duly licensed automobile broker
    44  under this section to  engage  in  the  automobile  broker  business  as
    45  defined  in  section  seven  hundred  thirty-six of this article. A duly
    46  licensed automobile broker may not:
    47    (a) deliver a vehicle to a consumer at any  location  other  than  the
    48  duly  licensed  new or used dealership that the broker arranged the sale
    49  through;
    50    (b)  transmit,  handle  or  store  any  documents  or  materials  with
    51  personally  identifying  information,  or  financial  information of the
    52  consumer; or
    53    (c) display for sale or lease any new or used motor vehicles without a
    54  valid new or used car dealership license.
    55    2. A duly licensed broker under this  section  must  disclose  to  the
    56  consumer any relationship with any dealership, and the amount of compen-

        S. 5380                             4                            A. 6884
 
     1  sation  paid to the broker for arranging the sale of the vehicle for the
     2  dealer.
     3    § 3. Section 744 of the general business law is renumbered section 745
     4  and a new section 744 is added to read as follows:
     5    §  744.  Investigation  by  the attorney general. The attorney general
     6  shall investigate non-licensed automobile broker businesses  engaged  in
     7  the  leasing  of  motor  vehicles  and shall make recommendations to the
     8  legislature concerning legislative proposals to effectuate the  purposes
     9  of this article.
    10    §  4.  Subdivision  1 of section 740-a of the general business law, as
    11  added by chapter 579 of the laws of 2011, is amended to read as follows:
    12    1. Automobile broker businesses shall obtain and continue in effect  a
    13  surety bond in an amount of [seventy-five] one hundred twenty-five thou-
    14  sand  dollars  executed by a surety company authorized to transact busi-
    15  ness in the state by the [insurance] department of financial services of
    16  the state or its successor. The bonds shall be approved as  to  form  by
    17  the secretary of state and shall be conditioned on the automobile broker
    18  business'  payment of all valid bank drafts, including checks, drawn for
    19  the purchase of motor vehicles and safekeeping of all customer  deposits
    20  related  to  the  sale of a motor vehicle between the time of receipt of
    21  such customer deposit and the transfer of good title to the  vehicle  to
    22  the customer.
    23    §  5.  This  act shall take effect on the ninetieth day after it shall
    24  have become a law; provided,  however,  that  the  commissioner  of  the
    25  department of motor vehicles shall take actions necessary to provide for
    26  the  issuance of licenses pursuant to section 736-d of the general busi-
    27  ness law, as added by section two of this act, prior to such date.
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