S04364 Summary:

BILL NOS04364A
 
SAME ASSAME AS A06655-A
 
SPONSORTHOMAS
 
COSPNSRBROOKS, COMRIE, GAUGHRAN, GOUNARDES, KAMINSKY, KAPLAN, LIU, MAY, METZGER, MYRIE, PERSAUD, SALAZAR, SAVINO, SKOUFIS
 
MLTSPNSR
 
Amd 415, 463 & 465, V & T L; amd 736, 736-a, 737, 738, 740, 740-a, 741 & 741-a, add 741-c, Gen Bus L
 
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.
Go to top    

S04364 Actions:

BILL NOS04364A
 
03/11/2019REFERRED TO TRANSPORTATION
05/23/2019AMEND AND RECOMMIT TO TRANSPORTATION
05/23/2019PRINT NUMBER 4364A
Go to top

S04364 Committee Votes:

Go to top

S04364 Floor Votes:

There are no votes for this bill in this legislative session.
Go to top

S04364 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         4364--A
 
                               2019-2020 Regular Sessions
 
                    IN SENATE
 
                                     March 11, 2019
                                       ___________
 
        Introduced  by Sens. THOMAS, BROOKS, COMRIE, GAUGHRAN, GOUNARDES, KAMIN-
          SKY, KAPLAN, LIU, MAY, MYRIE, PERSAUD,  SALAZAR,  SAVINO,  SKOUFIS  --
          read  twice  and  ordered printed, and when printed to be committed to
          the Committee on Transportation -- 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. Subdivision 1 of section 415 of the vehicle and traffic law
     2  is amended by adding a new paragraph n to read as follows:
     3    n. "New automobile broker business" shall have the same meaning as set
     4  forth in subdivision four of section seven  hundred  thirty-six  of  the
     5  general business law.
     6    §  2.  Section  736 of the general business law is amended by adding a
     7  new subdivision 4 to read as follows:
     8    4. "New automobile broker business" means any person who, for  a  fee,
     9  commission  or  other valuable consideration, regardless of whether such
    10  fee, commission or consideration is paid directly by a consumer,  offers
    11  to provide, provides or represents that he or she will provide a service
    12  of  purchasing,  arranging,  assisting,  facilitating  or  effecting the
    13  purchase or lease of a previously unregistered automobile; through a new
    14  motor vehicle dealer, as agent, broker, or intermediary for a  consumer.
    15  "New  automobile broker business" does not include any person registered
    16  as a new vehicle dealer for the new automobile brand or brands for which
    17  such services are provided, pursuant to article sixteen of  the  vehicle
    18  and  traffic  law nor any bona fide employee of such a registered dealer
    19  while acting for such dealer.
    20    § 3. Subdivision 3-a and paragraph b-3 of subdivision 5 of section 415
    21  of the vehicle and traffic law, as added by chapter 477 of the  laws  of
    22  2017, are amended to read as follows:
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD08916-05-9

        S. 4364--A                          2
 
     1    3-a.  Automobile  broker  business  [registration]  or  new automobile
     2  broker business.  No person shall engage in the automobile broker  busi-
     3  ness,  the new automobile broker business or represent or advertise that
     4  he or she is engaged or intends to engage in the automobile broker busi-
     5  ness or new automobile broker business in this state, unless there shall
     6  have been issued to him or her a certificate of registration as an auto-
     7  mobile  broker  business  or new automobile broker business, as the case
     8  may be, by the commissioner under this section pursuant to  an  applica-
     9  tion  for  registration  submitted  pursuant to subdivision five of this
    10  section.  The commissioner shall not issue any certificate of  registra-
    11  tion  authorized  by  this  section  to  any  franchisor,  manufacturer,
    12  distributor, distributor branch or factory branch,  as  such  terms  are
    13  defined  in  section  four  hundred  sixty-two  of this title, or to any
    14  subsidiary, affiliate or controlled entity thereof.
    15    b-3. In the case of an application for registration as  an  automobile
    16  broker  business or new automobile broker business, the name and address
    17  of the surety company which will issue the bond required by  subdivision
    18  one  of  section seven hundred forty-a of the general business law and a
    19  statement indicating any interest in the applicant's business entity  by
    20  a person or entity described in paragraph f of subdivision seven of this
    21  section. If the bond is to be issued by an authorized agent of the sure-
    22  ty  company  licensed  by  the  state, then the name and address of that
    23  agent may be provided in lieu of the information concerning  the  surety
    24  company.
    25    §  4.  Subdivision  5 of section 415 of the vehicle and traffic law is
    26  amended by adding a new paragraph e to read as follows:
    27    e.  Before  application  for  a  new  automobile  broker  business  is
    28  approved,  the applicant must have submitted along with the application,
    29  written confirmation from the  new  motor  vehicle  manufacturer  and/or
    30  distributor  permitting the applicant to serve as an approved registered
    31  broker for the sale or lease, through a new motor vehicle dealer,  of  a
    32  new  motor  vehicle  of  the  line makes which the applicant proposes to
    33  broker from the geographic location described in  the  application.  The
    34  geographic  location included in the application shall be subject to the
    35  provisions of article seventeen-A of  this  title  regarding  franchised
    36  automobile dealers.
    37    §  5.  Subdivision  1 of section 736-a of the general business law, as
    38  added by chapter 477 of the laws of 2017, is amended and a new  subdivi-
    39  sion 3 is added to read as follows:
    40    1.  (a)  No  person  shall  engage in business as an automobile broker
    41  business or as a new automobile  broker  business,  as  such  terms  are
    42  defined  in  section  seven  hundred thirty-six of this article, without
    43  first having been issued a certificate of registration for an automobile
    44  broker business or new automobile broker business pursuant to  paragraph
    45  c  of  subdivision  seven of section four hundred fifteen of the vehicle
    46  and traffic law. A certificate of  registration  for  a  new  automobile
    47  broker business is valid for a period of two years.
    48    (b)  No  new  automobile  broker  business  shall  represent or accept
    49  payment from, either directly or indirectly, a franchisor,  manufacturer
    50  and/or  distributor,  as such terms are defined in sections four hundred
    51  fifteen and four hundred sixty-two of the vehicle and traffic law.
    52    3. The commissioner of motor vehicles shall make necessary  rules  and
    53  regulations  as  may  be  appropriate  for the proper enforcement of the
    54  provisions of this section.
    55    § 6. The general business law is amended by adding a new section 741-c
    56  to read as follows:

        S. 4364--A                          3
 
     1    § 741-c. Prohibitions related to private information. No person regis-
     2  tered under this article shall request, handle, store  or  transmit  the
     3  private  information, as such term is defined in paragraph (b) of subdi-
     4  vision one of section eight hundred ninety-nine-aa of this  chapter,  of
     5  any consumer.
     6    §  7. Section 737 of the general business law, as added by chapter 616
     7  of the laws of 1988, is amended to read as follows:
     8    § 737. Advance fees prohibited. No automobile broker business  or  new
     9  automobile  broker  business  shall  solicit,  receive or collect from a
    10  consumer any fee, or commission, in advance of the performance of  those
    11  services  specified in the contract as required by section seven hundred
    12  thirty-eight of this article.
    13    § 8. The opening paragraph of subdivision 1  of  section  738  of  the
    14  general  business  law, as amended by chapter 28 of the laws of 2018, is
    15  amended to read as follows:
    16    Every contract between a consumer and an automobile  broker  business,
    17  which  for  the  purposes  of  this section shall include new automobile
    18  broker businesses, for the purchase of an automobile shall be  in  writ-
    19  ing,  shall be dated, shall contain the street address of the automobile
    20  broker business and the consumer and shall be signed by the consumer and
    21  by the automobile broker business. Every contract shall comply with  the
    22  requirements set forth in this section and contain the following:
    23    §  9. Section 740 of the general business law, as added by chapter 616
    24  of the laws of 1988, is amended to read as follows:
    25    § 740. Escrow required for advance payments.  All  monies  paid  by  a
    26  consumer  to  an  automobile  broker business or a new automobile broker
    27  business in connection with a transaction covered by this article  shall
    28  be  trust  funds in the possession of such automobile broker business or
    29  new automobile broker business and shall be deposited by it within  five
    30  days  after  receipt  thereof,  in  an account in a banking organization
    31  within the state. The  automobile  broker  business  or  new  automobile
    32  broker  business  shall thereupon notify in writing the consumer, giving
    33  the name and address of the banking organization and the amount deposit-
    34  ed. The monies shall be held on  deposit  until  fully  applied  to  the
    35  contract  price at the time the automobile is delivered to the consumer,
    36  unless sooner repaid in accordance with the provisions of this article.
    37    § 10. Section 740-a of the general business law, as added  by  chapter
    38  579  of  the laws of 2011 and subdivision 1 as amended by chapter 477 of
    39  the laws of 2017, is amended to read as follows:
    40    § 740-a. Automobile broker business and new automobile broker business
    41  surety bond. 1. Automobile broker businesses and new  automobile  broker
    42  businesses  shall  obtain  and  continue  in  effect a surety bond in an
    43  amount of one hundred thousand dollars  executed  by  a  surety  company
    44  authorized to transact business in the state by the department of finan-
    45  cial services of the state or its successor. The bonds shall be approved
    46  as  to  form  by  the secretary of state and shall be conditioned on the
    47  automobile broker business' or new automobile broker  business'  payment
    48  of  all  valid  bank drafts, including checks, drawn for the purchase of
    49  motor vehicles and safekeeping of all customer deposits related  to  the
    50  sale  of  a  motor  vehicle between the time of receipt of such customer
    51  deposit and the transfer of good title to the vehicle to the customer.
    52    2. Recovery against a bond may be made  by  a  person,  including  the
    53  state,  who obtains a judgment against the automobile broker business or
    54  new automobile broker business for an act or omission on which the  bond
    55  is  conditioned  if  the act or omission occurred during the term of the
    56  bond. The total liability imposed on the surety under this  section  for

        S. 4364--A                          4
 
     1  all  breaches of the bond condition is limited to the face amount of the
     2  bond. Such liability may include, but is not limited to, the  amount  of
     3  the  valid bank drafts, including checks, drawn by the automobile broker
     4  business  or  new  automobile  broker business for the purchase of motor
     5  vehicles. In no event shall the surety on a bond  be  liable  for  total
     6  claims  in excess of the bond amount, regardless of the number or nature
     7  of claims made against the bond or the number of years the bond remained
     8  in force.
     9    3. Any surety issuing a bond pursuant to  this  subdivision  shall  be
    10  required  to  provide sixty days' notice to the secretary of state prior
    11  to the effective date of cancellation of the bond.
    12    § 11. Section 741 of the general business law, as added by chapter 616
    13  of the laws of 1988, is amended to read as follows:
    14    § 741. Deceptive acts prohibited. It is hereby declared to be a decep-
    15  tive trade practice and unlawful for an automobile  broker  business  or
    16  new automobile broker business to misrepresent directly or indirectly in
    17  its  advertising,  promotional  materials, sales presentation, or in any
    18  manner:
    19    1. The nature of the services to be performed and in the case of a new
    20  automobile broker that a  third  party  will  be  paying  for  any  such
    21  services;
    22    2. The time within which the services will be performed;
    23    3. The cost of the services to be performed; [and]
    24    4.  The  ability  of  the automobile broker business or new automobile
    25  broker business to perform the services; and
    26    5. That the automobile broker business or new automobile broker  busi-
    27  ness  is affiliated with any automobile manufacturer and/or distributor,
    28  provided, however, that a new automobile broker business may  state  the
    29  line  makes  for  which  it  holds  permission  pursuant to section four
    30  hundred fifteen of the vehicle and traffic law.
    31    § 12. Section 741-a of the general business law, as amended by chapter
    32  477 of the laws of 2017, is amended to read as follows:
    33    § 741-a. Advertising. Automobile broker businesses and new  automobile
    34  broker businesses shall clearly and conspicuously disclose the following
    35  in all advertisements in any medium, and in any print advertisement such
    36  disclosures  shall  not appear in any footnotes and shall be situated in
    37  the top half of any such advertisement in an easily readable typeface:
    38    (a) That the automobile broker business or new automobile broker busi-
    39  ness is not a registered new motor vehicle dealer but  is  a  registered
    40  automobile  broker business or new automobile broker business as defined
    41  in section four hundred fifteen of the vehicle and traffic law;
    42    (b) The registration number issued to the automobile  broker  business
    43  or  new  automobile  broker  business  pursuant  to section four hundred
    44  fifteen of the vehicle and traffic law;
    45    (c) Whether any fees may be imposed by the automobile broker  business
    46  or new automobile broker business for services rendered. Details of such
    47  compensation  shall be provided by the automobile broker business or new
    48  automobile broker business upon request by the consumer; and
    49    (d) That no warranty repair services will be provided by  the  automo-
    50  bile broker business or new automobile broker business.
    51    §  13. Section 415 of the vehicle and traffic law is amended by adding
    52  a new subdivision 21 to read as follows:
    53    21. Penalties and rights of action for failure to obtain a certificate
    54  of registration as a  new  automobile  broker  pursuant  to  subdivision
    55  three-a  and  paragraph  b-3 of subdivision five of this section. a. The
    56  commissioner, or any person  designated  by  him  or  her,  may  proceed

        S. 4364--A                          5
 
     1  against  a  party  who  has  operated as a new automobile broker without
     2  certificate of registration in accordance with the  provisions  of  this
     3  article, in any one or more proceedings and by order require the offend-
     4  ing  party  to  pay  the  people of this state a penalty in a sum not to
     5  exceed two thousand dollars  for  each  violation  found  to  have  been
     6  committed. Civil penalties assessed under this subdivision shall be paid
     7  to  the  commissioner  for  deposit  into the state treasury, and unpaid
     8  civil penalties may be recovered by the commissioner in a  civil  action
     9  in the name of the commissioner. For the purposes of this subdivision, a
    10  "violation"  shall  mean  each  vehicle sold or leased to a consumer for
    11  which the party that failed to obtain certification as a new  automobile
    12  broker has served as a new automobile broker.
    13    b.  In addition to any civil action brought by the commissioner or any
    14  person appointed by him, any persons injured by any violation of  subdi-
    15  vision  three-a  and  paragraph b-3 of subdivision five of this section,
    16  shall be entitled to sue for and  have  injunctive  relief  and  damages
    17  against, any party in violation of subdivision three-a and paragraph b-3
    18  of  subdivision  five  of  this section in any court of the state having
    19  jurisdiction over the parties.  In the case of a new motor vehicle deal-
    20  er, injury shall include the sale or lease of a new motor vehicle  to  a
    21  person residing within the relevant market area of such dealer. The term
    22  "relevant  market  area"  shall  have the same meaning as in subdivision
    23  fifteen of section four hundred sixty-two of this title.   In  any  such
    24  judicial action or proceeding, the court may award reasonable attorney's
    25  fees and costs.
    26    §  14.  Subdivision 2 of section 463 of the vehicle and traffic law is
    27  amended by adding three new paragraphs (ll), (mm) and (nn)  to  read  as
    28  follows:
    29    (ll) To issue written confirmation to a new automobile broker business
    30  permitting  such  business to serve as an approved registered broker for
    31  the sale or lease, through a new motor vehicle dealer, of such  manufac-
    32  turer's  new  motor  vehicles,  unless  the manufacturer provides notice
    33  pursuant to the terms of this paragraph. All dealers that have  a  rele-
    34  vant market area that encompasses the proposed site shall be entitled to
    35  written  notice,  via certified mail return receipt requested, informing
    36  them of the proposed approval of a new automobile broker  business.  Any
    37  new  motor  vehicle  dealer  may institute an adjudicatory proceeding or
    38  action as provided in section four hundred sixty-nine of this article to
    39  protest the issuance of such written confirmation to  a  new  automobile
    40  broker  business permitting such business to serve as an approved regis-
    41  tered broker following receipt of such notice, or following the  end  of
    42  any  appeal  procedure provided by the manufacturer. In any adjudicatory
    43  proceeding or action brought by the dealer, the manufacturer shall  have
    44  the  burden  of  proving that there exists good cause to permit such new
    45  automobile broker business to serve as an approved registered broker and
    46  that such permission will not harm the dealer within the relevant market
    47  area. Institution of an action pursuant to this paragraph shall serve to
    48  stay, without bond, the effectiveness of  the  written  confirmation  of
    49  such manufacturer until a final judgment has been rendered in a proceed-
    50  ing  or  action  as  provided in section four hundred sixty-nine of this
    51  article. A manufacturer shall not issue written confirmation  permitting
    52  a  new  automobile  broker  business  to serve as an approved registered
    53  broker to any person or entity which has been cited for any violation of
    54  article thirty-five-B of the general business law, or which has a  busi-
    55  ness  relationship  with  any  new  franchised  motor vehicle dealer not
    56  licensed to operate as a new motor vehicle dealer within the  state,  or

        S. 4364--A                          6

     1  does  not  have  a relevant market area that includes any portion of the
     2  state. For the purposes of this paragraph "business relationship"  shall
     3  mean activity that includes paying a new automobile broker business by a
     4  new  motor vehicle dealer not licensed to operate as a new motor vehicle
     5  dealer within the state, or does not have a relevant  market  area  that
     6  includes  any portion of the state in connection with the sale or leader
     7  of a new motor vehicle.
     8    (mm) To issue written confirmation to a new automobile broker business
     9  that permits such business to serve as an approved registered broker for
    10  a period exceeding two years.
    11    (nn) For incentive payments, bonuses, holdbacks  or  similar  payments
    12  related  to  the  sale  or  lease  of  a new motor vehicle that has been
    13  arranged, assisted, facilitated or effected  in  a  particular  relevant
    14  market  area,  to deny a franchised motor vehicle dealer located in such
    15  relevant market area a payment of equal value as  has  been  awarded  to
    16  another franchised motor vehicle dealer. Nothing in this paragraph shall
    17  be  construed  to  authorize  any  incentive payment, bonus, holdback or
    18  similar payment to any automobile  broker  business  or  new  automobile
    19  broker  business,  as  such  terms  are defined in section seven hundred
    20  thirty-six of the general business law.
    21    § 15. Section 465 of the vehicle and traffic law is amended by  adding
    22  a new subdivision 8 to read as follows:
    23    8.  A  new vehicle manufacturer shall require its franchisees to main-
    24  tain a record of all sales or leases arranged, assisted, facilitated  or
    25  effected by each new automobile broker business to which it has provided
    26  written  confirmation  permitting it to serve as a new automobile broker
    27  business, as such term is defined in section seven hundred thirty-six of
    28  the general business law. New vehicle manufacturers shall further  main-
    29  tain  a  record of all incentives paid to any franchisee attributable to
    30  any sale or lease that  has  been  arranged,  assisted,  facilitated  or
    31  effected  by  a  new  automobile  broker  business.  For sales or leases
    32  arranged, assisted, facilitated or effected by any new automobile broker
    33  business operating or based in a particular relevant market area, a  new
    34  vehicle  manufacturer  shall  furnish a record of incentives paid to any
    35  franchisee attributable to any such sales or leases  to  the  franchisee
    36  operating or based within any such relevant market area.
    37    §  16. This act shall take effect immediately; provided that all auto-
    38  mobile brokers registered on the effective date of this act  shall  have
    39  ninety days to come into compliance with the provisions of this act.
Go to top