STATE OF NEW YORK
________________________________________________________________________
7553
2023-2024 Regular Sessions
IN SENATE
June 5, 2023
___________
Introduced by Sen. THOMAS -- read twice and ordered printed, and when
printed to be committed to the Committee on Rules
AN ACT to amend the general business law and the vehicle and traffic
law, in relation to automobile broker businesses
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 amended by chapter 28 of the laws of 2018, 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, only when operating in a manner pursuant to such registra-
13 tion under article sixteen of the vehicle and traffic law, any person
14 registered under section four hundred fifteen-a of the vehicle and traf-
15 fic law, only when operating in a manner described in section four
16 hundred fifteen-a of the vehicle and traffic law, an automobile auctio-
17 neer, only when operating in the manner described in section twenty-
18 three of this chapter, nor any bona fide employee of a registered dealer
19 while acting for such dealer, or any person who sells, offers for sale
20 or lease or acts as agent, broker or intermediary in effecting the
21 purchase or lease of three or fewer automobiles in any calendar year,
22 any national service which aggregates information for consumers, but
23 does not otherwise have contact with consumers, or any motor vehicle
24 franchisor, manufacturer, [or] distributor, distributor branch or facto-
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD11745-01-3
S. 7553 2
1 ry branch registered under article sixteen of the vehicle and traffic
2 law.
3 § 2. Section 736 of the general business law is amended by adding a
4 new subdivision 4 to read as follows:
5 4. "Place of business" means a designated permanent location at which
6 the business of the automobile broker business is conducted.
7 § 3. The general business law is amended by adding a new section 736-b
8 to read as follows:
9 § 736-b. Place of business required. 1. No person shall engage in
10 business as an automobile broker business, as defined in section seven
11 hundred thirty-six of this article, without maintaining a place of busi-
12 ness.
13 2. The certificate of registration for an automobile broker business
14 pursuant to paragraph c of subdivision seven of section four hundred
15 fifteen of the vehicle and traffic law shall be amended within thirty
16 days of a change of address of an automobile broker business to reflect
17 the new address of its place of business.
18 § 4. Subdivision 1 and the opening paragraph of subdivision 2 of
19 section 738 of the general business law, subdivision 1 and the opening
20 paragraph of subdivision 2 as added by chapter 616 of the laws of 1988,
21 the opening paragraph and paragraph (e) of subdivision 1 as amended by
22 chapter 28 of the laws of 2018, and paragraphs (f) and (g) of subdivi-
23 sion 1 as amended by chapter 477 of the laws of 2017, are amended to
24 read as follows:
25 1. Prior to the purchase or lease of an automobile, the consumer and
26 the automobile broker business shall enter into a contract. Every
27 contract between a consumer and an automobile broker business for the
28 purchase or lease of an automobile shall be in writing, shall be dated,
29 shall contain the street address of the place of business of the automo-
30 bile broker business, the registration number issued to the automobile
31 broker business pursuant to section four hundred fifteen of the vehicle
32 and traffic law and the name and address of the consumer and shall be
33 signed by the consumer and by the automobile broker business. Every
34 contract shall comply with the requirements set forth in this section
35 and contain the following:
36 (a) A complete description of the automobile and each option, if any,
37 ordered; a statement of whether the automobile is or will be manufac-
38 tured in accordance with United States specifications and is or will be
39 certified by the manufacturer as such; if the automobile is not or will
40 not be manufactured in accordance with United States safety and environ-
41 mental specifications, and the consumer has retained the automobile
42 broker business to arrange for the modification of the automobile to
43 meet such specifications, the name and street address of the modifica-
44 tion facility and a statement in immediate proximity to such information
45 that the automobile broker business assumes full financial responsibil-
46 ity that the automobile will be properly modified to meet all United
47 States safety and environmental specifications.
48 (b) The price of the automobile including any options ordered. If the
49 price set forth is an estimated price, a statement in immediate proximi-
50 ty to the price that the price is an estimated price only and that the
51 consumer has the right to cancel the contract and to receive a full
52 refund if the final price exceeds the estimated price by more than five
53 percent.
54 (c) The estimated delivery date of the automobile and the place of
55 delivery and a statement in immediate proximity to the estimated deliv-
56 ery date that, if the automobile has not been delivered in accordance
S. 7553 3
1 with the contract within thirty days following such estimated delivery
2 date, the consumer has the right to cancel the contract and to receive a
3 full refund, unless the delay in delivery is attributable to the consum-
4 er.
5 (d) A statement of whether or not the manufacturer's warranty accompa-
6 nying the automobile is the same warranty as that furnished to purchas-
7 ers of that make automobile from an authorized dealer located in the
8 United States.
9 (e) A statement that the broker will not accept payment for their
10 services from anyone other than the motor vehicle dealer.
11 (f) A statement that the consumer has the option to take delivery of a
12 motor vehicle at the selling or leasing dealership.
13 (g) A description of any other services and an itemization of the
14 charges for each. Such description shall include disclosure of the auto-
15 mobile dealer from which the automobile was purchased or leased, as well
16 as all fees, commissions or other valuable considerations paid by an
17 automobile dealer to the automobile broker business for selling, arrang-
18 ing, assisting or effecting the sale or lease of an automobile as agent,
19 broker, or intermediary between the consumer and the automobile dealer.
20 [(f)] (h) If a consumer elects to cancel the contract pursuant to
21 paragraph (b) or (c) of this subdivision, he or she shall notify in
22 writing the automobile broker business at the address specified in the
23 contract. The automobile broker business shall make a full refund to the
24 consumer within ten business days following receipt of the request for a
25 refund. The contract shall contain a statement, setting forth the
26 consumer's right to cancel the contract under paragraphs (b) and (c) of
27 this subdivision and the refund obligations of the automobile broker
28 business.
29 [(g)] (i) The statements required by paragraphs (a), (b), (c), [and]
30 (e), (f), (g) and (h) of this subdivision shall be printed in at least
31 [ten] twelve point bold type.
32 The contract shall be accompanied by a completed form in duplicate,
33 captioned "Notice of Cancellation" which shall be attached to the
34 contract and easily detachable, and which shall contain in at least
35 [ten] twelve point type the following:
36 § 5. Section 741-a of the general business law, as amended by chapter
37 477 of the laws of 2017, is amended to read as follows:
38 § 741-a. Advertising. 1. Automobile broker businesses shall clearly
39 and conspicuously disclose the following in all advertisements in any
40 medium, and in any print advertisement such disclosures shall not appear
41 in any footnotes and shall be situated in the top half of any such
42 advertisement in an easily readable typeface:
43 (a) That the automobile broker business is not a registered new motor
44 vehicle dealer but is a registered automobile broker business as defined
45 in section four hundred fifteen of the vehicle and traffic law;
46 (b) The registration number issued to the automobile broker business
47 pursuant to section four hundred fifteen of the vehicle and traffic law;
48 (c) Whether any fees may be imposed by the automobile broker business
49 for services rendered. Details of such compensation shall be provided by
50 the automobile broker business upon request by the consumer; [and]
51 (d) That no warranty repair services will be provided by the automo-
52 bile broker business; and
53 (e) That the automobile broker business is not affiliated with any
54 manufacturer, dealership, or dealership group.
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1 2. The official business certificate of registration shall be clearly
2 and conspicuously displayed at the place of business of an automobile
3 broker business.
4 § 6. The general business law is amended by adding a new section 741-c
5 to read as follows:
6 § 741-c. Private information security. In addition to the requirements
7 of subdivision twenty-one of section four hundred fifteen of the vehicle
8 and traffic law, an automobile broker business shall:
9 1. keep and maintain all consumer records containing private informa-
10 tion in a safe place that is not accessible to persons not employed by
11 the automobile broker business, including by keeping and maintaining a
12 clear and permanent physical barrier from other businesses that share or
13 neighbor its place of business;
14 2. have a separate mailbox at such place of business for the automo-
15 bile broker business; and
16 3. have a method of securing personal information, including but not
17 limited to in a locking cabinet or safe.
18 § 7. Section 415 of the vehicle and traffic law is amended by adding
19 four new subdivisions 22, 23, 24 and 25 to read as follows:
20 22. Compliance. All dealers and automobile broker businesses regis-
21 tered under subdivisions three and three-a of this section shall certify
22 and attest to compliance with sections three hundred ninety-nine-cc, as
23 added by chapter 655 of the laws of 2005, three hundred ninety-nine-dd,
24 as added by chapter 487 of the laws of 2006, three hundred ninety-nine-
25 ddd, three hundred ninety-nine-h, three hundred ninety-nine-oo, three
26 hundred ninety-nine-p, three hundred ninety-nine-pp, eight hundred nine-
27 ty-nine-bb of the general business law, and part three hundred fourteen
28 of title sixteen of the code of federal regulations as applicable.
29 23. Automobile broker record requirements. (a) For each completed
30 transaction and within three business days of consummation thereof,
31 automobile brokers shall maintain a permanent paper file record that
32 clearly evidences and records the make, model, year, color and vehicle
33 identification number of all previously unregistered motor vehicles for
34 which such broker has provided a service of purchasing, arranging,
35 assisting, facilitating or effecting the purchase or lease of such motor
36 vehicle. Such records shall be maintained for a six-year period after
37 consummation of the transaction. Such records shall also include the
38 name and address of the purchaser or lessee of such motor vehicle, the
39 date of sale or commencement of lease with respect to such motor vehicle
40 and the name and address of the dealer from which the motor vehicle was
41 purchased or leased.
42 (b) The records maintained by the automobile broker businesses shall
43 include a copy of the dealer rate sheets received by the automobile
44 broker from the dealers that were relied upon by the automobile broker
45 in connection with such transaction.
46 (c) Such records shall be open for inspection by the commissioner, or
47 his or her agent, during reasonable business hours.
48 (d) As an alternative to paper file records, an automobile broker may
49 use a computer and appropriate software to maintain the records required
50 to be kept by this section, provided all information required by para-
51 graphs (a) and (b) of this subdivision are duly recorded and maintained
52 in accordance with this subdivision.
53 24. Maintenance records. For each sale or lease of a motor vehicle
54 that involves an automobile broker business, the dealer must obtain
55 evidence of the automobile broker business' registration and the
56 broker's registration number and maintain such records in the deal jack-
S. 7553 5
1 et for each transaction which also shall contain the purchase order,
2 copies of the title and registration documents, the bill of sale and the
3 retail installment sale contract required under article ten of the
4 personal property law or the retail lease agreement required under arti-
5 cle nine-A of the personal property law.
6 25. Broker compensation. No dealer may offer or pay an automobile
7 broker business any fee, or commission, other than compensation
8 disclosed pursuant to section seven hundred thirty-eight or seven
9 hundred forty-one-b of the general business law or section three hundred
10 two or three hundred thirty-seven of the personal property law.
11 § 8. The general business law is amended by adding a new section 745
12 to read as follows:
13 § 745. Preemption. The provisions of this article and section four
14 hundred fifteen of the vehicle and traffic law shall govern the require-
15 ments and obligations with respect to the automobile broker business
16 notwithstanding any other law to the contrary. No local or municipal law
17 shall be enacted which shall impose any different or other obligations
18 on the automobile broker business including a requirement of any fee or
19 license for the automobile broker business.
20 § 9. Section 741-b of the general business law, as added by chapter 28
21 of the laws of 2018, is amended to read as follows:
22 § 741-b. Disclosure. An automobile broker business shall provide a
23 disclosure at the time such automobile broker business takes an order to
24 search for a leased or purchased vehicle meeting the prospective
25 lessee's specifications. Such disclosure shall provide the amount of any
26 fees, commissions or other valuable consideration the automobile broker
27 business expects to receive, if known, from a dealer, lessor or any
28 other person or entity for any assistance the automobile broker business
29 provides in effecting the lease or purchase transaction. If the amount
30 of any such fees, commissions or other valuable consideration the auto-
31 mobile broker business expects to receive is unknown at the time of the
32 required disclosure, the automobile broker business shall disclose: (a)
33 whether it has a contract with any dealer, lessor or any other person or
34 entity for the provision of assistance in effecting a lease or purchase
35 transaction; [and] (b) [whether] that the automobile broker business
36 [may] shall be compensated by the dealer, lessor or any other person or
37 entity for any assistance in effecting such lease transaction; and (c)
38 that the amount of any such fees, commissions or other valuable consid-
39 eration the automobile broker business receives shall be disclosed on
40 the executed lease or purchase contract or finance agreement pursuant to
41 section three hundred two or three hundred thirty-seven of the personal
42 property law.
43 § 10. The general business law is amended by adding a new section
44 741-c to read as follows:
45 § 741-c. Prohibited acts. An automobile broker business is prohibited
46 from:
47 1. advertising that such automobile broker business has any new auto-
48 mobile in stock;
49 2. advertising any price figure in an advertisement unless such figure
50 represents the actual price of the advertised automobile, exclusive of
51 registration and titles, fees and taxes;
52 3. starting or completing any financing or credit application or the
53 lease or purchase agreement of an automobile on behalf of a consumer or
54 dealer; and
S. 7553 6
1 4. accepting any payment other than that disclosed under section seven
2 hundred thirty-eight or seven hundred forty-one-b of this article from
3 anyone other than the dealer.
4 § 11. Section 743 of the general business law, as amended by chapter
5 372 of the laws of 2016, is amended to read as follows:
6 § 743. Enforcement by attorney general. 1. In addition to the other
7 remedies provided, whenever there shall be a violation of this article,
8 application may be made by the attorney general in the name of the
9 people of the state of New York to a court or justice having jurisdic-
10 tion by a special proceeding to issue an injunction, and upon notice to
11 the defendant of not less than five days, to enjoin and restrain the
12 continuance of such violations; and if it shall appear to the satisfac-
13 tion of the court or justice that the defendant has, in fact, violated
14 this article, an injunction may be issued by such court or justice,
15 enjoining and restraining any further violation, without requiring proof
16 that any person has, in fact, been injured or damaged thereby. In any
17 such proceeding, the court may make allowances to the attorney general
18 as provided in paragraph six of subdivision (a) of section eighty-three
19 hundred three of the civil practice law and rules, and direct restitu-
20 tion. Whenever the court shall determine that a violation of this arti-
21 cle has occurred, the court shall impose a civil penalty of not less
22 than one thousand dollars and not more than three thousand dollars for
23 each violation. In connection with any such proposed application, the
24 attorney general is authorized to take proof and make a determination of
25 the relevant facts and to issue subpoenas in accordance with the civil
26 practice law and rules.
27 2. The provisions of this article may be enforced concurrently by a
28 municipal consumer affairs office.
29 § 12. Severability. If any clause, sentence, paragraph, subdivision,
30 section or part of this act shall be adjudged by any court of competent
31 jurisdiction to be invalid, such judgment shall not affect, impair, or
32 invalidate the remainder thereof, but shall be confined in its operation
33 to the clause, sentence, paragraph, subdivision, section or part thereof
34 directly involved in the controversy in which such judgment shall have
35 been rendered. It is hereby declared to be the intent of the legislature
36 that this act would have been enacted even if such invalid provisions
37 had not been included herein.
38 § 13. This act shall take effect on the one hundred eightieth day
39 after it shall have become a law. Effective immediately, the addition,
40 amendment and/or repeal of any rule or regulation necessary for the
41 implementation of this act on its effective date are authorized to be
42 made and completed on or before such effective date.
