STATE OF NEW YORK
________________________________________________________________________
9046--A
IN SENATE
October 13, 2020
___________
Introduced by Sen. SAVINO -- read twice and ordered printed, and when
printed to be committed to the Committee on Rules -- committee
discharged, bill amended, ordered reprinted as amended and recommitted
to said committee
AN ACT to amend the general business law, in relation to third-party
food delivery service charges during COVID-19; and providing for the
repeal of certain provisions upon the expiration thereof
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Legislative findings and intent. The legislature hereby
2 finds that on March 7, 2020, the governor of New York declared a state
3 of emergency related to the COVID-19 pandemic; and has issued various
4 emergency directives related to the COVID-19 pandemic that have
5 restricted the ability of restaurants and other food providers to fully
6 operate their businesses.
7 These social distancing measures required to mitigate the spread of
8 COVID-19 means that delivery and take-out options from restaurants and
9 other food establishments are critical to the public's accessibility of
10 food and addressing any community food insecurity.
11 Restaurants and other food establishments are restricted in their
12 ability to fully utilize their dine-in capabilities and the resultant
13 reliance on take-out and delivery service places a sudden and severe
14 financial strain on many establishments, particularly those that are
15 small, independently owned or minority-owned businesses that already
16 operate on thin margins. Adding to financial pressures in the industry
17 that predate the current public health crisis, it is in the public
18 interest to take action to maximize restaurant revenue from delivery and
19 pick-up orders to enable these businesses to survive the impacts of the
20 COVID-19 pandemic and continue supporting a diverse workforce and
21 contributing to the vitality of our community.
22 Therefore, it is the intent of the legislature to create a statewide
23 policy and fee structure for third-party food delivery services during
24 the state declared COVID-19 emergency while food service establishments
25 have capacity restrictions.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD17385-03-0
S. 9046--A 2
1 § 2. The general business law is amended by adding a new section 391-v
2 to read as follows:
3 § 391-v. Third-party food delivery service charges during COVID-19. 1.
4 Definitions. For purposes of this section, the following terms shall
5 have the following meanings:
6 (a) "Declared emergency" means the period during which a state disas-
7 ter emergency has been declared by the governor that results in limita-
8 tions on on-premises dining for restaurants as a result of the COVID-19
9 pandemic.
10 (b) "Delivery fee" means a fee charged by a third-party food delivery
11 service for providing a food service establishment with a service that
12 delivers food from such establishment to customers. Delivery fee shall
13 not include any other fee that may be charged by a third-party food
14 delivery service to a food service establishment, including but not
15 limited to, fees for listing or advertising the food service establish-
16 ment on the third-party food delivery service platform or fees related
17 to processing the online order.
18 (c) "Food service establishment" means a place where food is prepared
19 and intended for individual portion service and includes the site at
20 which such individual portions are provided, whether consumption occurs
21 on or off the premises. Food service establishment shall not include
22 food processing establishments, retail food stores, private homes where
23 food is prepared or served for family consumption, and food service
24 operations where a distinct group mutually provides, prepares, serves
25 and consumes the food, including but not limited to, a covered-dish
26 supper limited to a congregation, club or fraternal organization.
27 (d) "Online order" means any order placed by a customer through, or
28 with the assistance of, a platform provided by a third-party food deliv-
29 ery service, including but not limited to, a telephone order.
30 (e) "Purchase price" means the total price of the items contained in
31 an online order that are listed on the menu of the food service estab-
32 lishment where such order is placed. Purchase price shall not include
33 taxes, gratuities and any other fees that may make up the total cost to
34 the customer of an online order.
35 (f) "Third-party food delivery service" means any website, mobile
36 application or other internet service that offers or arranges for the
37 sale and same-day delivery or same-day pickup of food and beverages
38 prepared by no fewer than twenty food service establishments located in
39 the state that are owned and operated by different persons.
40 2. Fee limits during declared emergencies. (a) No third-party food
41 delivery service shall charge a food service establishment any combina-
42 tion of fees, commissions or costs, including a delivery fee, for such
43 third-party food delivery service's services that total more than twenty
44 percent of the purchase price of an online order plus credit card proc-
45 essing fees.
46 (b) No third-party food delivery service shall charge a food service
47 establishment a delivery fee that totals more than fifteen percent of
48 the purchase price of an online order.
49 (c) No third-party food delivery service shall reduce the compen-
50 sation, including but not limited to, any tip or gratuity, paid to any
51 worker as a result of fees charged during the declared emergency.
52 3. Penalties and enforcement. Whenever there shall be a violation of
53 this section, an application may be made by the attorney general in the
54 name of the people of the state of New York to a court or justice having
55 jurisdiction to issue an injunction to enjoin and restrain the contin-
56 uance of such violation; and if it shall appear to the satisfaction of
S. 9046--A 3
1 the court or justice that the defendant has, in fact, violated this
2 section, an injunction may be issued by such court or justice, enjoining
3 and restraining any further violation, without requiring proof that any
4 person has, in fact, been injured or damaged thereby. In any such
5 proceeding, the court may make allowances to the attorney general and
6 direct restitution of an amount not to exceed the amount of fees
7 collected in violation of this section by a third-party food delivery
8 service, attorneys' fees, and such other remedies as the court may deem
9 appropriate. Whenever the court shall determine that a violation of this
10 section has occurred, the court may impose a civil penalty of not more
11 than one thousand dollars for each violation. Each day a violation of
12 this section is continued and each food service establishment charged a
13 fee in violation of this section shall constitute a separate violation.
14 In connection with any such proposed application the attorney general is
15 authorized to take proof and make a determination of the relevant facts
16 and to issue subpoenas in accordance with the civil practice law and
17 rules.
18 4. Preemption. At all times, whether or not a declared emergency is
19 in effect, the provisions of this section shall supersede and preempt
20 any county or municipal or other local law, ordinance, resolution, or
21 regulation concerning the relationship between a third-party food deliv-
22 ery service and any food service establishment utilizing its services.
23 § 3. This act shall take effect seven days after it shall have become
24 a law provided that section one of this act and subdivisions 1, 2 and 3
25 of section 391-v of the general business law as added by section two of
26 this act shall expire and be deemed repealed upon the expiration of the
27 declared state of emergency relating to the novel coronavirus (COVID-
28 19); and provided, further, that the superintendent of financial
29 services shall notify the legislative bill drafting commission upon
30 occurrence of the expiration of the state disaster emergency declared by
31 executive order number 202 and any further amendments or modifications,
32 and as may be further extended pursuant to section 28 of the executive
33 law, in order that the commission may maintain an accurate and timely
34 effective data base of the official text of the laws of the state of New
35 York in furtherance of effectuating the provisions of section 44 of the
36 legislative law and section 70-b of the public officers law.