Bill Text: NY A03499 | 2023-2024 | General Assembly | Amended
Bill Title: Requires automobile brokers to maintain a place of business; requires certain notices and recordkeeping; makes related provisions.
Spectrum: Moderate Partisan Bill (Democrat 39-7)
Status: (Engrossed) 2024-06-06 - RETURNED TO ASSEMBLY [A03499 Detail]
Download: New_York-2023-A03499-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 3499--B Cal. No. 93 2023-2024 Regular Sessions IN ASSEMBLY February 3, 2023 ___________ Introduced by M. of A. CARROLL, STIRPE, REYES, TAYLOR, DICKENS, DeSTEFA- NO, RAMOS, MIKULIN, SAYEGH, SMITH, WILLIAMS, COOK, SEAWRIGHT, REILLY, MILLER, ROZIC, EPSTEIN, CRUZ, STECK, RA, BENEDETTO, JACOBSON, HYNDMAN, THIELE, LAVINE, STERN, JONES, BUTTENSCHON, BRAUNSTEIN, FALL, PAULIN, L. ROSENTHAL, WALLACE, DILAN, AUBRY, JEAN-PIERRE, DARLING, WALKER, ANDERSON, JACKSON, RAGA, BURGOS -- Multi-Sponsored by -- M. of A. FITZPATRICK, HEVESI, SIMON -- read once and referred to the Committee on Consumer Affairs and Protection -- reported and referred to the Committee on Codes -- reported and referred to the Committee on Rules -- ordered to a third reading -- amended on the special order of third reading, ordered reprinted as amended, retaining its place on the special order of third reading -- ordered to a third reading, amended and ordered reprinted, retaining its place on the order of third read- ing 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] such automobile 8 broker business will provide a service of purchasing, arranging, assist- 9 ing, facilitating or effecting the purchase or lease of an automobile as 10 agent, broker, or intermediary for a consumer. "Automobile broker busi- 11 ness" does not include any person registered as a dealer pursuant to 12 article sixteen of the vehicle and traffic law, only when operating in a 13 manner pursuant to such registration under article sixteen of the vehi- 14 cle and traffic law, any person registered under section four hundred 15 fifteen-a of the vehicle and traffic law, only when operating in a 16 manner described in section four hundred fifteen-a of the vehicle and EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD00498-03-4A. 3499--B 2 1 traffic law, an automobile auctioneer, only when operating in the manner 2 described in section twenty-three of this chapter, nor any bona fide 3 employee of a registered dealer while acting for such dealer, or any 4 person who sells, offers for sale or lease or acts as agent, broker or 5 intermediary in effecting the purchase or lease of three or fewer auto- 6 mobiles in any calendar year, any national service which aggregates 7 information for consumers, but does not otherwise have contact with 8 consumers, or any motor vehicle franchisor, manufacturer, [or] distribu- 9 tor, distributor branch or factory branch registered under article 10 sixteen of the vehicle and traffic law. 11 § 2. Section 736 of the general business law is amended by adding a 12 new subdivision 4 to read as follows: 13 4. "Place of business" means a designated permanent location at which 14 the business of the automobile broker business is conducted. 15 § 3. The general business law is amended by adding a new section 736-b 16 to read as follows: 17 § 736-b. Place of business required. 1. No person shall engage in 18 business as an automobile broker business, as defined in section seven 19 hundred thirty-six of this article, without maintaining a place of busi- 20 ness. 21 2. The certificate of registration for an automobile broker business 22 pursuant to paragraph c of subdivision seven of section four hundred 23 fifteen of the vehicle and traffic law shall be amended within thirty 24 days of a change of address of an automobile broker business to reflect 25 the new address of its place of business. 26 § 4. Subdivision 1 and the opening paragraph of subdivision 2 of 27 section 738 of the general business law, subdivision 1 and the opening 28 paragraph of subdivision 2 as added by chapter 616 of the laws of 1988, 29 the opening paragraph and paragraph (e) of subdivision 1 as amended by 30 chapter 28 of the laws of 2018, and paragraphs (f) and (g) of subdivi- 31 sion 1 as amended by chapter 477 of the laws of 2017, are amended to 32 read as follows: 33 1. Prior to the purchase or lease of an automobile, the consumer and 34 the automobile broker business shall enter into a contract. Every 35 contract between a consumer and an automobile broker business for the 36 purchase or lease of an automobile shall be in writing, shall be dated, 37 shall contain the street address of the place of business of the automo- 38 bile broker business, the registration number issued to the automobile 39 broker business pursuant to section four hundred fifteen of the vehicle 40 and traffic law and the name and address of the consumer and shall be 41 signed by the consumer and by the automobile broker business. Every 42 contract shall comply with the requirements set forth in this section 43 and contain the following: 44 (a) A complete description of the automobile and each option, if any, 45 ordered; a statement of whether the automobile is or will be manufac- 46 tured in accordance with United States specifications and is or will be 47 certified by the manufacturer as such; if the automobile is not or will 48 not be manufactured in accordance with United States safety and environ- 49 mental specifications, and the consumer has retained the automobile 50 broker business to arrange for the modification of the automobile to 51 meet such specifications, the name and street address of the modifica- 52 tion facility and a statement in immediate proximity to such information 53 that the automobile broker business assumes full financial responsibil- 54 ity that the automobile will be properly modified to meet all United 55 States safety and environmental specifications.A. 3499--B 3 1 (b) The price of the automobile including any options ordered. If the 2 price set forth is an estimated price, a statement in immediate proximi- 3 ty to the price that the price is an estimated price only and that the 4 consumer has the right to cancel the contract and to receive a full 5 refund if the final price exceeds the estimated price by more than five 6 percent. 7 (c) The estimated delivery date of the automobile and the place of 8 delivery and a statement in immediate proximity to the estimated deliv- 9 ery date that, if the automobile has not been delivered in accordance 10 with the contract within thirty days following such estimated delivery 11 date, the consumer has the right to cancel the contract and to receive a 12 full refund, unless the delay in delivery is attributable to the consum- 13 er. 14 (d) A statement of whether or not the manufacturer's warranty accompa- 15 nying the automobile is the same warranty as that furnished to purchas- 16 ers of that make automobile from an authorized dealer located in the 17 United States. 18 (e) A statement that the broker shall only accept payment for their 19 services from either the dealer selling or leasing the automobile or the 20 buyer or lessee of the automobile, but may not accept payment from both. 21 (f) A statement that the consumer has the option to take delivery of a 22 motor vehicle at the selling or leasing dealership. 23 (g) A description of any other services and an itemization of the 24 charges for each. Such description shall include disclosure of the auto- 25 mobile dealer from which the automobile was purchased or leased, as well 26 as all fees, commissions or other valuable considerations paid by an 27 automobile dealer to the automobile broker business for selling, arrang- 28 ing, assisting or effecting the sale or lease of an automobile as agent, 29 broker, or intermediary between the consumer and the automobile dealer. 30 [(f)] (h) If a consumer elects to cancel the contract pursuant to 31 paragraph (b) or (c) of this subdivision, he or she shall notify in 32 writing the automobile broker business at the address specified in the 33 contract. The automobile broker business shall make a full refund to the 34 consumer within ten business days following receipt of the request for a 35 refund. The contract shall contain a statement, setting forth the 36 consumer's right to cancel the contract under paragraphs (b) and (c) of 37 this subdivision and the refund obligations of the automobile broker 38 business. 39 [(g)] (i) The statements required by paragraphs (a), (b), (c), [and] 40 (e), (f), (g) and (h) of this subdivision shall be printed in at least 41 [ten] twelve point bold type. 42 The contract shall be accompanied by a completed form in duplicate, 43 captioned "Notice of Cancellation" which shall be attached to the 44 contract and easily detachable, and which shall contain in at least 45 [ten] twelve point type the following: 46 § 5. Section 741-a of the general business law, as amended by chapter 47 477 of the laws of 2017, is amended to read as follows: 48 § 741-a. Advertising. 1. Automobile broker businesses shall clearly 49 and conspicuously disclose the following in all advertisements in any 50 medium, and in any print advertisement such disclosures shall not appear 51 in any footnotes and shall be situated in the top half of any such 52 advertisement in an easily readable typeface: 53 (a) That the automobile broker business is not a registered new motor 54 vehicle dealer but is a registered automobile broker business as defined 55 in section four hundred fifteen of the vehicle and traffic law;A. 3499--B 4 1 (b) The registration number issued to the automobile broker business 2 pursuant to section four hundred fifteen of the vehicle and traffic law; 3 (c) Whether any fees may be imposed by the automobile broker business 4 for services rendered. Details of such compensation shall be provided by 5 the automobile broker business upon request by the consumer; [and] 6 (d) That no warranty repair services will be provided by the automo- 7 bile broker business; and 8 (e) That the automobile broker business is not affiliated with any 9 manufacturer, dealership, or dealership group. 10 2. The official business certificate of registration shall be clearly 11 and conspicuously displayed at the place of business of an automobile 12 broker business. 13 § 6. The general business law is amended by adding a new section 741-c 14 to read as follows: 15 § 741-c. Private information security. In addition to the requirements 16 of subdivision twenty-one of section four hundred fifteen of the vehicle 17 and traffic law, an automobile broker business shall: 18 1. keep and maintain all consumer records containing private informa- 19 tion in a safe place that is not accessible to persons not employed by 20 the automobile broker business, including by keeping and maintaining a 21 clear and permanent physical barrier from other businesses that share or 22 neighbor its place of business; 23 2. have a separate mailbox at such place of business for the automo- 24 bile broker business; and 25 3. have a method of securing personal information, including but not 26 limited to in a locking cabinet or safe. 27 § 7. Section 415 of the vehicle and traffic law is amended by adding 28 four new subdivisions 22, 23, 24 and 25 to read as follows: 29 22. Compliance. All dealers and automobile broker businesses regis- 30 tered under subdivisions three and three-a of this section shall certify 31 and attest to compliance with sections three hundred ninety-nine-cc, as 32 added by chapter 655 of the laws of 2005, three hundred ninety-nine-dd, 33 as added by chapter 487 of the laws of 2006, three hundred ninety-nine- 34 ddd, three hundred ninety-nine-h, three hundred ninety-nine-oo, three 35 hundred ninety-nine-p, three hundred ninety-nine-pp, eight hundred nine- 36 ty-nine-bb of the general business law, and part three hundred fourteen 37 of title sixteen of the code of federal regulations as applicable. 38 23. Automobile broker record requirements. (a) For each completed 39 transaction and within three business days of consummation thereof, 40 automobile brokers shall maintain a permanent paper file record that 41 clearly evidences and records the make, model, year, color and vehicle 42 identification number of all previously unregistered motor vehicles for 43 which such broker has provided a service of purchasing, arranging, 44 assisting, facilitating or effecting the purchase or lease of such motor 45 vehicle. Such records shall be maintained for a six-year period after 46 consummation of the transaction. Such records shall also include the 47 name and address of the purchaser or lessee of such motor vehicle, the 48 date of sale or commencement of lease with respect to such motor vehicle 49 and the name and address of the dealer from which the motor vehicle was 50 purchased or leased. 51 (b) The records maintained by the automobile broker businesses shall 52 include a copy of the dealer rate sheets received by the automobile 53 broker from the dealers that were relied upon by the automobile broker 54 in connection with such transaction. 55 (c) Such records shall be open for inspection by the commissioner, or 56 his or her agent, during reasonable business hours.A. 3499--B 5 1 (d) As an alternative to paper file records, an automobile broker may 2 use a computer and appropriate software to maintain the records required 3 to be kept by this section, provided all information required by para- 4 graphs (a) and (b) of this subdivision are duly recorded and maintained 5 in accordance with this subdivision. 6 24. Maintenance records. For each sale or lease of a motor vehicle 7 that involves an automobile broker business, the dealer must obtain 8 evidence of the automobile broker business' registration and the 9 broker's registration number and maintain such records in the deal jack- 10 et for each transaction which also shall contain the purchase order, 11 copies of the title and registration documents, the bill of sale and the 12 retail installment sale contract required under article ten of the 13 personal property law or the retail lease agreement required under arti- 14 cle nine-A of the personal property law. 15 25. Broker compensation. No dealer may offer or pay an automobile 16 broker business any fee, or commission, other than compensation 17 disclosed pursuant to section seven hundred thirty-eight or seven 18 hundred forty-one-b of the general business law or section three hundred 19 two or three hundred thirty-seven of the personal property law; 20 provided, however, that the automobile broker business may not accept 21 any such fee or commission from the dealer if the broker has or will 22 accept payment from the buyer or lessee of the automobile. 23 § 8. The general business law is amended by adding a new section 745 24 to read as follows: 25 § 745. Preemption. The provisions of this article and section four 26 hundred fifteen of the vehicle and traffic law shall govern the require- 27 ments and obligations with respect to the automobile broker business 28 notwithstanding any other law to the contrary. No local or municipal law 29 shall be enacted which shall impose any different or other obligations 30 on the automobile broker business including a requirement of any fee or 31 license for the automobile broker business. 32 § 9. Section 741-b of the general business law, as added by chapter 28 33 of the laws of 2018, is amended to read as follows: 34 § 741-b. Disclosure. An automobile broker business shall provide a 35 disclosure at the time such automobile broker business takes an order to 36 search for a leased or purchased vehicle meeting the prospective 37 lessee's specifications. Such disclosure shall provide the amount of any 38 fees, commissions or other valuable consideration the automobile broker 39 business expects to receive, if known, from a dealer, lessor or any 40 other person or entity for any assistance the automobile broker business 41 provides in effecting the lease or purchase transaction. If the amount 42 of any such fees, commissions or other valuable consideration the auto- 43 mobile broker business expects to receive is unknown at the time of the 44 required disclosure, the automobile broker business shall disclose: (a) 45 whether it has a contract with any dealer, lessor or any other person or 46 entity for the provision of assistance in effecting a lease or purchase 47 transaction; [and] (b) [whether] that the automobile broker business 48 [may] shall be compensated by the dealer, lessor or any other person or 49 entity for any assistance in effecting such lease transaction; and (c) 50 that the amount of any such fees, commissions or other valuable consid- 51 eration the automobile broker business receives, whether from the dealer 52 or the buyer of the automobile, shall be disclosed on the executed lease 53 or purchase contract or finance agreement pursuant to section three 54 hundred two or three hundred thirty-seven of the personal property law. 55 § 10. The general business law is amended by adding a new section 56 741-d to read as follows:A. 3499--B 6 1 § 741-d. Prohibited acts. An automobile broker business is prohibited 2 from: 3 1. advertising that such automobile broker business has any new auto- 4 mobile in stock; 5 2. advertising any price figure in an advertisement unless such figure 6 represents the actual price of the advertised automobile, exclusive of 7 registration and titles, fees and taxes; 8 3. starting, completing, or answering any portion of a financing or 9 credit application or the lease or purchase agreement of an automobile, 10 on behalf of a consumer or dealer, without including on or affixing to 11 such application or agreement, the name and registration number of the 12 automobile broker business; and 13 4. accepting any payment other than that disclosed under section seven 14 hundred thirty-eight or seven hundred forty-one-b of this article, 15 whether from the dealer or buyer of the automobile. 16 § 11. Section 743 of the general business law, as amended by chapter 17 372 of the laws of 2016, is amended to read as follows: 18 § 743. Enforcement by attorney general. 1. In addition to the other 19 remedies provided, whenever there shall be a violation of this article, 20 application may be made by the attorney general in the name of the 21 people of the state of New York to a court or justice having jurisdic- 22 tion by a special proceeding to issue an injunction, and upon notice to 23 the defendant of not less than five days, to enjoin and restrain the 24 continuance of such violations; and if it shall appear to the satisfac- 25 tion of the court or justice that the defendant has, in fact, violated 26 this article, an injunction may be issued by such court or justice, 27 enjoining and restraining any further violation, without requiring proof 28 that any person has, in fact, been injured or damaged thereby. In any 29 such proceeding, the court may make allowances to the attorney general 30 as provided in paragraph six of subdivision (a) of section eighty-three 31 hundred three of the civil practice law and rules, and direct restitu- 32 tion. Whenever the court shall determine that a violation of this arti- 33 cle has occurred, the court shall impose a civil penalty of not less 34 than one thousand dollars and not more than three thousand dollars for 35 each violation. In connection with any such proposed application, the 36 attorney general is authorized to take proof and make a determination of 37 the relevant facts and to issue subpoenas in accordance with the civil 38 practice law and rules. 39 2. The provisions of this article may be enforced concurrently by a 40 municipal consumer affairs office. 41 § 12. Severability. If any clause, sentence, paragraph, subdivision, 42 section or part of this act shall be adjudged by any court of competent 43 jurisdiction to be invalid, such judgment shall not affect, impair, or 44 invalidate the remainder thereof, but shall be confined in its operation 45 to the clause, sentence, paragraph, subdivision, section or part thereof 46 directly involved in the controversy in which such judgment shall have 47 been rendered. It is hereby declared to be the intent of the legislature 48 that this act would have been enacted even if such invalid provisions 49 had not been included herein. 50 § 13. This act shall take effect on the one hundred eightieth day 51 after it shall have become a law. Effective immediately, the addition, 52 amendment and/or repeal of any rule or regulation necessary for the 53 implementation of this act on its effective date are authorized to be 54 made and completed on or before such effective date.
