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.