Bill Text: NY A06655 | 2019-2020 | General Assembly | Introduced


Bill Title: Relates to designating new automotive broker businesses.

Spectrum: Moderate Partisan Bill (Democrat 24-5)

Status: (Introduced) 2019-03-14 - referred to consumer affairs and protection [A06655 Detail]

Download: New_York-2019-A06655-Introduced.html


                STATE OF NEW YORK
        ________________________________________________________________________
                                          6655
                               2019-2020 Regular Sessions
                   IN ASSEMBLY
                                     March 14, 2019
                                       ___________
        Introduced  by M. of A. CARROLL -- read once and referred to the Commit-
          tee on Consumer Affairs and Protection
        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  as  agent,
    14  broker, or intermediary for a consumer. "New automobile broker business"
    15  does  not  include any person registered as a new vehicle dealer for the
    16  new automobile brand or brands for which  such  services  are  provided,
    17  pursuant  to article sixteen of the vehicle and traffic law nor any bona
    18  fide employee, as opposed to an independent contractor, of such a regis-
    19  tered dealer while acting for such dealer.  For the purposes hereof, any
    20  employee who, pursuant to department  of  labor  guidelines,  rules  and
    21  regulations,  would be an independent contractor for a registered dealer
    22  shall not be deemed a bona fide employee.
    23    § 3. Subdivision 3-a and paragraph b-3 of subdivision 5 of section 415
    24  of the vehicle and traffic law, as added by chapter 477 of the  laws  of
    25  2017, are amended to read as follows:
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD08916-04-9

        A. 6655                             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.
    11    b-3. In the case of an application for registration as  an  automobile
    12  broker  business or new automobile broker business, the name and address
    13  of the surety company which will issue the bond required by  subdivision
    14  one of section seven hundred forty-a of the general business law. If the
    15  bond  is  to  be  issued  by  an  authorized agent of the surety company
    16  licensed by the state, then the name and address of that  agent  may  be
    17  provided in lieu of the information concerning the surety company.
    18    §  4.  Subdivision  5 of section 415 of the vehicle and traffic law is
    19  amended by adding a new paragraph e to read as follows:
    20    e.  Before  application  for  a  new  automobile  broker  business  is
    21  approved,  the applicant must have submitted along with the application,
    22  written confirmation from the new motor vehicle manufacturer authorizing
    23  such applicant to serve as a broker for the sale or lease of  the  lines
    24  or  makes  of  the new motor vehicles which applicant proposes to broker
    25  from the locations described in the application.
    26    § 5. Subdivision 1 of section 736-a of the general  business  law,  as
    27  added by chapter 477 of the laws of 2017, is amended to read as follows:
    28    1. No person shall engage in business as an automobile broker business
    29  or  as  a  new  automobile broker business, as such terms are defined in
    30  section seven hundred thirty-six of this article, without  first  having
    31  been issued a certificate of registration for an automobile broker busi-
    32  ness or new automobile broker business pursuant to paragraph c of subdi-
    33  vision  seven of section four hundred fifteen of the vehicle and traffic
    34  law.
    35    § 6. Section 737 of the general business law, as added by chapter  616
    36  of the laws of 1988, is amended to read as follows:
    37    §  737.  Advance fees prohibited. No automobile broker business or new
    38  automobile broker business shall solicit,  receive  or  collect  from  a
    39  consumer  any fee, or commission, in advance of the performance of those
    40  services specified in the contract as required by section seven  hundred
    41  thirty-eight of this article.
    42    §  7.  The  opening  paragraph  of subdivision 1 of section 738 of the
    43  general business law, as amended by chapter 28 of the laws of  2018,  is
    44  amended to read as follows:
    45    Every  contract  between a consumer and an automobile broker business,
    46  which for the purposes of this  section  shall  include  new  automobile
    47  broker  businesses,  for the purchase of an automobile shall be in writ-
    48  ing, shall be dated, shall contain the street address of the  automobile
    49  broker business and the consumer and shall be signed by the consumer and
    50  by  the automobile broker business. Every contract shall comply with the
    51  requirements set forth in this section and contain the following:
    52    § 8. Section 740 of the general business law, as added by chapter  616
    53  of the laws of 1988, is amended to read as follows:
    54    §  740.  Escrow  required  for  advance payments. All monies paid by a
    55  consumer to an automobile broker business or  a  new  automobile  broker
    56  business  in connection with a transaction covered by this article shall

        A. 6655                             3
     1  be trust funds in the possession of such automobile broker  business  or
     2  new  automobile broker business and shall be deposited by it within five
     3  days after receipt thereof, in an  account  in  a  banking  organization
     4  within  the  state.  The  automobile  broker  business or new automobile
     5  broker business shall thereupon notify in writing the  consumer,  giving
     6  the name and address of the banking organization and the amount deposit-
     7  ed.  The  monies  shall  be  held  on deposit until fully applied to the
     8  contract price at the time the automobile is delivered to the  consumer,
     9  unless sooner repaid in accordance with the provisions of this article.
    10    §  9.  Section  740-a of the general business law, as added by chapter
    11  579 of the laws of 2011 and subdivision 1 as amended by chapter  477  of
    12  the laws of 2017, is amended to read as follows:
    13    § 740-a. Automobile broker business and new automobile broker business
    14  surety  bond.  1. Automobile broker businesses and new automobile broker
    15  businesses shall obtain and continue in  effect  a  surety  bond  in  an
    16  amount  of  one  hundred  thousand  dollars executed by a surety company
    17  authorized to transact business in the state by the department of finan-
    18  cial services of the state or its successor. The bonds shall be approved
    19  as to form by the secretary of state and shall  be  conditioned  on  the
    20  automobile  broker  business' or new automobile broker business' payment
    21  of all valid bank drafts, including checks, drawn for  the  purchase  of
    22  motor  vehicles  and safekeeping of all customer deposits related to the
    23  sale of a motor vehicle between the time of  receipt  of  such  customer
    24  deposit and the transfer of good title to the vehicle to the customer.
    25    2.  Recovery  against  a  bond  may be made by a person, including the
    26  state, who obtains a judgment against the automobile broker business  or
    27  new  automobile broker business for an act or omission on which the bond
    28  is conditioned if the act or omission occurred during the  term  of  the
    29  bond.  The  total liability imposed on the surety under this section for
    30  all breaches of the bond condition is limited to the face amount of  the
    31  bond.  Such  liability may include, but is not limited to, the amount of
    32  the valid bank drafts, including checks, drawn by the automobile  broker
    33  business  or  new  automobile  broker business for the purchase of motor
    34  vehicles. In no event shall the surety on a bond  be  liable  for  total
    35  claims  in excess of the bond amount, regardless of the number or nature
    36  of claims made against the bond or the number of years the bond remained
    37  in force.
    38    3. Any surety issuing a bond pursuant to  this  subdivision  shall  be
    39  required  to  provide sixty days' notice to the secretary of state prior
    40  to the effective date of cancellation of the bond.
    41    § 10. Section 741 of the general business law, as added by chapter 616
    42  of the laws of 1988, is amended to read as follows:
    43    § 741. Deceptive acts prohibited. It is hereby declared to be a decep-
    44  tive trade practice and unlawful for an automobile  broker  business  or
    45  new automobile broker business to misrepresent directly or indirectly in
    46  its  advertising,  promotional  materials, sales presentation, or in any
    47  manner:
    48    1. The nature of the services to be performed;
    49    2. The time within which the services will be performed;
    50    3. The cost of the services to be performed; and
    51    4. The ability of the automobile broker  business  or  new  automobile
    52  broker business to perform the services.
    53    § 11. Section 741-a of the general business law, as amended by chapter
    54  477 of the laws of 2017, is amended to read as follows:
    55    §  741-a. Advertising. Automobile broker businesses and new automobile
    56  broker businesses shall clearly and conspicuously disclose the following

        A. 6655                             4
     1  in all advertisements in any medium, and in any print advertisement such
     2  disclosures shall not appear in any footnotes and shall be  situated  in
     3  the top half of any such advertisement in an easily readable typeface:
     4    (a) That the automobile broker business or new automobile broker busi-
     5  ness  is  not  a registered new motor vehicle dealer but is a registered
     6  automobile broker business or new automobile broker business as  defined
     7  in section four hundred fifteen of the vehicle and traffic law;
     8    (b)  The  registration number issued to the automobile broker business
     9  or new automobile broker  business  pursuant  to  section  four  hundred
    10  fifteen of the vehicle and traffic law;
    11    (c)  Whether any fees may be imposed by the automobile broker business
    12  or new automobile broker business for services rendered. Details of such
    13  compensation shall be provided by the automobile broker business or  new
    14  automobile broker business upon request by the consumer; and
    15    (d)  That  no warranty repair services will be provided by the automo-
    16  bile broker business or new automobile broker business.
    17    § 12. Section 415 of the vehicle and traffic law is amended by  adding
    18  a new subdivision 21 to read as follows:
    19    21. Penalties and rights of action for failure to obtain a certificate
    20  of  registration  as  a  new  automobile  broker pursuant to subdivision
    21  three-a and paragraph b-3 of subdivision five of this  section.  a.  The
    22  commissioner,  or  any  person  designated  by  him  or her, may proceed
    23  against a party who has operated as  a  new  automobile  broker  without
    24  certificate  of  registration  in accordance with the provisions of this
    25  article, in any one or more proceedings and by order require the offend-
    26  ing party to pay the people of this state a penalty  in  a  sum  not  to
    27  exceed  two  thousand  dollars  for  each  violation  found to have been
    28  committed. Civil penalties assessed under this subdivision shall be paid
    29  to the commissioner for deposit into  the  state  treasury,  and  unpaid
    30  civil  penalties  may be recovered by the commissioner in a civil action
    31  in the name of the commissioner. For the purposes of this subdivision, a
    32  "violation" shall mean each vehicle sold or leased  to  a  consumer  for
    33  which  the party that failed to obtain certification as a new automobile
    34  broker has served as a new automobile broker.
    35    b. In addition to any civil action brought by the commissioner or  any
    36  person  appointed  by  him,  any  complainant  or  complainants  who are
    37  aggrieved by any violation of subdivision three-a and paragraph  b-3  of
    38  subdivision  five of this section, shall be entitled to sue for and have
    39  injunctive relief and damages against, any party in violation of  subdi-
    40  vision  three-a and paragraph b-3 of subdivision five of this section in
    41  any court of the state having jurisdiction over the  parties.    In  any
    42  such  judicial  action or proceeding, the court may also award necessary
    43  costs and disbursements plus reasonable attorney's fees and costs.
    44    § 13. This act shall take effect immediately; provided that all  auto-
    45  mobile  brokers  registered on the effective date of this act shall have
    46  ninety days to come into compliance with the provisions of this act.
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