S T A T E O F N E W Y O R K
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8066
2015-2016 Regular Sessions
I N A S S E M B L Y
June 5, 2015
___________
Introduced by M. of A. CRESPO -- read once and referred to the Committee
on Transportation
AN ACT to amend the vehicle and traffic law, in relation to surety bond
requirements for car dealers
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Paragraphs a, b and c of subdivision 6-b of section 415 of
the vehicle and traffic law, as amended by chapter 7 of the laws of
2000, paragraph a as further amended by section 104 of part A of chapter
62 of the laws of 2011, are amended to read as follows:
a. As a condition to obtaining a registration certificate pursuant to
this section, every new motor vehicle dealer applicant and every quali-
fied dealer applicant shall obtain and continue in effect a surety bond
in an amount of fifty thousand dollars executed by a surety company
authorized to transact business in the state by the department of finan-
cial services of the state. As a condition to obtaining a registration
certificate pursuant to this section, every dealer applicant [who is
applying for a registration certificate in the first instance or who
sold two hundred motor vehicles or fewer in the previous calendar year
shall obtain and continue in effect a surety bond in an amount of ten
thousand dollars executed by a surety company authorized to transact
business in the state by the department of financial services of the
state. As a condition of obtaining a registration certificate pursuant
to this section, every dealer applicant who sold more than two hundred
motor vehicles in the previous calendar year shall obtain and continue
in effect a surety bond in an amount of twenty-five thousand dollars
executed by a surety company authorized to transact business in the
state by the department of financial services of the state. The bonds
shall be approved as to form by the commissioner and shall be condi-
tioned on the new motor vehicle dealer's, qualified dealer's, and deal-
er's: payment of all valid bank drafts, including checks, drawn by such
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10954-04-5
A. 8066 2
dealer for the purchase of motor vehicles; transfer of good title to
each motor vehicle such dealer sells; safekeeping of all customer depos-
its related to the sale of a motor vehicle between the time of receipt
of such customer deposit and the transfer of good title to the vehicle
to the customer; payment for all fines imposed upon the new motor vehi-
cle dealer, qualified dealer, or dealer by the commissioner pursuant to
the provisions of this chapter; and such dealer's repayment of any over-
charges of a customer by such dealer for the vehicle registration and
titling charges payable to the commissioner for registering and titling
the sold vehicle], WHO IS NOT A NEW MOTOR VEHICLE DEALER OR A QUALIFIED
MOTOR VEHICLE DEALER, WHO IS APPLYING FOR A NEW REGISTRATION CERTIFICATE
SHALL OBTAIN AND CONTINUE IN EFFECT A SURETY BOND IN AN AMOUNT OF (I)
TWENTY THOUSAND DOLLARS, FOR SUCH DEALERS WHO SELL FIFTY OR LESS MOTOR
VEHICLES A YEAR, AND (II) ONE HUNDRED THOUSAND DOLLARS, FOR SUCH DEALERS
WHO SELL MORE THAN FIFTY MOTOR VEHICLES A YEAR EXECUTED BY A SURETY
COMPANY AUTHORIZED TO TRANSACT BUSINESS IN THIS STATE BY THE DEPARTMENT
OF FINANCIAL SERVICES OF THE STATE. ANY SUCH DEALER WHICH IS BONDED
PRIOR TO THE EFFECTIVE DATE OF THE CHAPTER OF THE LAWS OF TWO THOUSAND
FIFTEEN WHICH AMENDED THIS PARAGRAPH, SHALL BE REQUIRED TO COMPLY WITH
THE AMENDMENTS MADE BY SUCH CHAPTER, ON AND AFTER JANUARY FIRST, TWO
THOUSAND SIXTEEN.
b. Recovery against a bond may be made by a person, including the
state, who obtains a judgment against the new motor vehicle dealer,
qualified dealer, or dealer for [an act or omission on which the bond is
conditioned if the act or omission occurred during the term of the bond]
ANY CLAIM RELATED TO THE BUSINESS OF SUCH NEW MOTOR VEHICLE DEALER,
QUALIFIED DEALER OR DEALER, INCLUDING BUT NOT LIMITED TO, CONTRACTUAL
VIOLATIONS, FRAUD, UNFAIR AND DECEPTIVE ACTS AND PRACTICES IN VIOLATION
OF SECTION THREE HUNDRED FORTY-NINE OF THE GENERAL BUSINESS LAW, ACTS
AND OMISSIONS, THE AMOUNT OF THE VALID BANK DRAFTS (INCLUDING CHECKS
DRAWN BY THE MOTOR VEHICLE DEALER), QUALIFIED CHECKS DRAWN BY THE NEW
MOTOR VEHICLE DEALER, QUALIFIED DEALER OR DEALER FOR THE PURCHASE OF
MOTOR VEHICLES OR THE AMOUNT OF OVERCHARGE BY SUCH DEALER FOR REGISTRA-
TION OR TITLE FEES OR THE AMOUNT PAID TO SUCH DEALER OR THE DEPOSIT, AS
THE CASE MAY BE, FOR THE MOTOR VEHICLE FOR WHICH GOOD TITLE WAS NOT
DELIVERED, AND TITLE CLAIMS, IF THE ACT OR OMISSION OCCURRED DURING THE
TERM OF THE BOND. The total liability imposed on the surety under this
section for all [breaches of the bond condition] CLAIMS is limited to
the face amount of the bond. [Such liability may include, but is not
limited to, the amount of the valid bank drafts, including checks, drawn
by the new motor vehicle dealer, qualified dealer, or dealer for the
purchase of motor vehicles or the amount of overcharge by such dealer
for registration or title fees or the amount paid to such dealer or the
deposit, as the case may be, for the motor vehicle for which good title
was not delivered.] In no event shall the surety on a bond be liable for
total claims in excess of the bond amount, regardless of the number or
nature of claims made against the bond or the number of years the bond
remained in force, nor shall any such surety bond provide coverage for
transactions involving sales of any motor vehicles for which a bond is
not required pursuant to the provisions of paragraph d of this subdivi-
sion.
c. Any surety issuing a bond pursuant to this subdivision shall be
required to provide sixty days' notice to the commissioner prior to the
effective date of cancellation OR LAPSE of the bond, AND SHALL PROVIDE
NOTICE TO THE COMMISSIONER UPON THE DATE OF THE CANCELLATION OR LAPSE OF
SUCH BOND. UPON THE CANCELLATION OR LAPSE OF ANY SURETY BOND REQUIRED BY
A. 8066 3
THIS SUBDIVISION, THE COMMISSIONER SHALL WITHIN FIVE DAYS OF SUCH
CANCELLATION OR LAPSE, VERIFY THAT THE DEALER HOLDS A SURETY BOND WHICH
MEETS THE REQUIREMENTS OF THIS SUBDIVISION.
S 2. This act shall take effect on the one hundred eightieth day after
it shall have become a law.