Assembly Bill A8370

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8370
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                               June 12, 2017
                                ___________
 
 Introduced  by  M.  of  A.  SIMANOWITZ  -- read once and referred to the
   Committee on Consumer Affairs and Protection
 
 AN ACT to amend the general business law and  the  vehicle  and  traffic
   law, in relation to requiring the consent of all parties for any tran-
   saction involving a motor vehicle where there are multiple purchasers,
   sellers, or lessees
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Short title. This act shall be known and may  be  cited  as
 the "Safe Vehicle Transfer Act".
   §  2.  Section 396-qq of the general business law, as added by chapter
 553 of the laws of 1996, is amended to read as follows:
   § 396-qq. New and used motor vehicles; sales and  leases.  1.    Defi-
 nitions.  The following terms when used in this section, shall be deemed
 to mean and include:
   a. "Dealer" as defined in section four hundred fifteen of the  vehicle
 and traffic law.
   b.  "Motor  vehicle"  as defined in section one hundred twenty-five of
 the vehicle and traffic law and excluding class A, B and C  limited  use
 motorcycles  as defined in section one hundred twenty-one-b of the vehi-
 cle and traffic law.
   2. Whenever a dealer provides to a purchaser  or  lessee  of  a  motor
 vehicle  the  service  of  securing a registration and/or certificate of
 title for such vehicle from the commissioner of motor  vehicles  or  his
 issuing agent, the dealer shall either calculate the actual registration
 and/or  certificate  of title charges due, or make a good faith estimate
 in each transaction of the amount of such charges on the sales  contract
 or lease agreement.  If such charges are estimated, the dealer shall set
 forth  on  such sales contract or lease agreement or on a separate docu-
 ment to be [initialled] INITIALED by the purchaser or lessee in conspic-
 uous boldface type, the following disclosure: "THE AMOUNT  INDICATED  ON
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD09873-03-7

 A. 8370                             2
 
 THIS  SALES  CONTRACT OR LEASE AGREEMENT FOR REGISTRATION AND TITLE FEES
 IS AN ESTIMATE. IN SOME INSTANCES, IT MAY EXCEED THE ACTUAL FEES DUE THE
 COMMISSIONER OF MOTOR VEHICLES. THE DEALER WILL AUTOMATICALLY, AND WITH-
 IN SIXTY DAYS OF SECURING SUCH REGISTRATION AND TITLE, REFUND ANY AMOUNT
 OVERPAID  FOR  SUCH  FEES."    If such charges are estimated, the dealer
 shall, within sixty days of securing such registration and title, refund
 to the purchaser or lessee the difference between the  estimated  amount
 collected  from  such  purchaser  or lessee by the dealer and the actual
 fees paid to the commissioner of motor vehicles by the dealer.
   3. A DEALER SHALL NOT COMPLETE A PURCHASE, LEASE, OR SALE OF A NEW  OR
 USED MOTOR VEHICLE IN WHICH THERE IS MORE THAN ONE PURCHASER, SELLER, OR
 LESSEE  WITHOUT  A  NOTARIZED  DOCUMENT INDICATING THE MUTUAL CONSENT OF
 EVERY PARTY TO THE TRANSACTION. SUCH DOCUMENT SHALL NOT BE NOTARIZED  BY
 A DEALER OR EMPLOYEE OTHERWISE DIRECTLY INVOLVED WITH THE TRANSACTION.
   4.  Where a violation of this section is alleged to have occurred, the
 attorney general may apply in the name of the people of the state of New
 York to the supreme court of the state of New York within  the  judicial
 district  in which such violation is alleged to have occurred, on notice
 of five days, for an order enjoining or restraining the  continuance  of
 such  violation.  In  any  such  proceeding the court may impose a civil
 penalty in an amount not to exceed five hundred dollars and order resti-
 tution to aggrieved consumers.
   § 3. The vehicle and traffic law is amended by adding  a  new  section
 417-c to read as follows:
   §  417-C.  PROOF OF CONSENT OF ALL PARTIES PRIOR TO PURCHASE, SALE, OR
 LEASE OF A MOTOR VEHICLE. 1. A DEALER SHALL  NOT  COMPLETE  A  PURCHASE,
 LEASE,  OR  SALE  OF  A NEW OR USED MOTOR VEHICLE IN WHICH THERE IS MORE
 THAN ONE PURCHASER, SELLER, OR LESSEE WITHOUT A NOTARIZED DOCUMENT INDI-
 CATING THE MUTUAL CONSENT OF EVERY PARTY TO THE TRANSACTION. SUCH  DOCU-
 MENT  SHALL  NOT BE NOTARIZED BY A DEALER OR EMPLOYEE OTHERWISE DIRECTLY
 INVOLVED WITH THE TRANSACTION.
   2. A. UPON ANY VIOLATION OF THIS SECTION, AN APPLICATION MAY  BE  MADE
 BY  THE  ATTORNEY  GENERAL IN THE NAME OF THE PEOPLE OF THE STATE OF NEW
 YORK TO A COURT OR JUSTICE HAVING JURISDICTION TO ISSUE  AN  INJUNCTION,
 AND  UPON  NOTICE TO THE DEFENDANT OF NOT LESS THAN FIVE DAYS, TO ENJOIN
 AND RESTRAIN THE CONTINUANCE OF THE VIOLATION. IF IT SHALL APPEAR TO THE
 SATISFACTION OF THE COURT OR JUSTICE THAT  THE  DEFENDANT  HAS  VIOLATED
 THIS  SECTION,  AN  INJUNCTION  MAY  BE  ISSUED BY THE COURT OR JUSTICE,
 ENJOINING AND RESTRAINING ANY FURTHER VIOLATION, WITHOUT REQUIRING PROOF
 THAT ANY PERSON HAS, IN FACT, BEEN INJURED OR DAMAGED  THEREBY.  IN  ANY
 SUCH  PROCEEDING,  THE COURT MAY MAKE ALLOWANCES TO THE ATTORNEY GENERAL
 AS PROVIDED IN PARAGRAPH SIX OF SUBDIVISION (A) OF SECTION  EIGHTY-THREE
 HUNDRED  THREE  OF THE CIVIL PRACTICE LAW AND RULES, AND DIRECT RESTITU-
 TION.
   B. WHENEVER THE COURT SHALL DETERMINE THAT A VIOLATION OF THIS SECTION
 HAS OCCURRED, IT MAY IMPOSE A CIVIL PENALTY OF NOT MORE THAN  ONE  THOU-
 SAND  DOLLARS FOR EACH VIOLATION. IN CONNECTION WITH AN APPLICATION MADE
 UNDER THIS SUBDIVISION, THE ATTORNEY GENERAL IS AUTHORIZED TO TAKE PROOF
 AND TO MAKE A DETERMINATION OF THE RELEVANT FACTS AND TO ISSUE SUBPOENAS
 IN ACCORDANCE WITH THE CIVIL PRACTICE LAW AND RULES.
   § 4. Subdivision (a) of section 2114 of the vehicle and  traffic  law,
 as  amended  by  chapter  521 of the laws of 1972, is amended to read as
 follows:
   (a) If a dealer buys a vehicle and holds it for  resale  and  procures
 the  certificate  of title from the owner within ten days after delivery
 to him of the vehicle, he need not send the certificate to  the  commis-

 A. 8370                             3
 
 sioner  but,  upon transferring the vehicle to another person other than
 by the creation of a  security  interest,  shall  promptly  execute  the
 assignment  and  warranty  of  title  by a dealer, showing the names and
 addresses  of  the  transferee  and of any lienholder holding a security
 interest created or reserved at the time of the resale,  in  the  spaces
 provided  therefor on the certificate or as the commissioner prescribes,
 and mail or  deliver  the  certificate  to  the  commissioner  with  the
 transferee's  application  for  a new certificate. THE DEALER SHALL ALSO
 SUBMIT EVIDENCE OF  THE  UNANIMOUS  CONSENT  TO  TRANSFER  THE  VEHICLE,
 INCLUDING  SUBMISSION  OF A NOTARIZED DOCUMENT WITH THE SIGNATURE OF ALL
 TRANSFERORS POSSESSING ANY INTEREST IN THE VEHICLE  WITH  SUCH  APPLICA-
 TION.  The assignment and warranty of title by a dealer required by this
 section shall include a statement, signed by the dealer  stating  either
 (i)  any  facts or information known to him that could reasonably affect
 the validity of the title of the vehicle, or (ii) that no such facts  or
 information are known to him.
   §  5.  Paragraph  2 of subdivision (b) of section 198-a of the general
 business law, as amended by chapter 279 of the laws of 1989, is  amended
 to read as follows:
   (2)  If  a manufacturer's agent or authorized dealer refuses to under-
 take repairs within seven days of receipt of the notice by a consumer of
 a nonconformity, defect or condition pursuant to paragraph one  of  this
 subdivision, the consumer may immediately forward written notice of such
 refusal to the manufacturer by certified mail, return receipt requested.
 The  manufacturer  or  its  authorized agent shall have twenty days from
 receipt of such notice of refusal to commence such  repairs.  If  within
 such  twenty  day period, the manufacturer or its authorized agent fails
 to commence such repairs, the manufacturer, at the option of the consum-
 er, shall replace the motor vehicle with a comparable motor vehicle,  or
 accept return of the vehicle from the consumer and refund to the consum-
 er  the  full  purchase price or, if applicable, the lease price and any
 trade-in allowance plus fees and  charges;  PROVIDED,  HOWEVER,  THAT  A
 REFUND  SHALL  NOT  BE  ISSUED FOR A VEHICLE WITH MULTIPLE OWNERS BEFORE
 NOTARIZED PROOF OF CONSENT IS PROVIDED AS DESCRIBED IN SUBDIVISION THREE
 OF SECTION THREE HUNDRED NINETY-SIX-QQ OF THIS CHAPTER.  Such  fees  and
 charges  shall include but not be limited to all license fees, registra-
 tion fees and any similar governmental charges, less  an  allowance  for
 the consumer's use of the vehicle in excess of the first twelve thousand
 miles  of operation pursuant to the mileage deduction formula defined in
 paragraph four of subdivision (a) of  this  section,  and  a  reasonable
 allowance  for  any  damage  not attributable to normal wear or improve-
 ments.
   § 6. Paragraphs 1 and 2 of subdivision (c) of  section  198-a  of  the
 general  business law, paragraph 1 as amended by chapter 234 of the laws
 of 1990, and paragraph 2 as amended by chapter 29 of the laws  of  1989,
 are amended to read as follows:
   (1)  If,  within  the  period  specified  in  subdivision  (b) of this
 section, the manufacturer or its agents or authorized dealers are unable
 to repair or correct any defect or condition which substantially impairs
 the value of the motor vehicle to the consumer after a reasonable number
 of attempts, the manufacturer, at the  option  of  the  consumer,  shall
 replace  the  motor  vehicle  with a comparable motor vehicle, or accept
 return of the vehicle from the consumer and refund to the  consumer  the
 full  purchase price or, if applicable, the lease price and any trade-in
 allowance plus fees and charges; PROVIDED, HOWEVER, THAT A REFUND  SHALL
 NOT  BE ISSUED FOR A VEHICLE WITH MULTIPLE OWNERS BEFORE NOTARIZED PROOF

 A. 8370                             4
 
 OF CONSENT IS PROVIDED AS DESCRIBED  IN  SUBDIVISION  THREE  OF  SECTION
 THREE HUNDRED NINETY-SIX-QQ OF THIS CHAPTER. Any return of a motor vehi-
 cle  may,  at the option of the consumer, be made to the dealer or other
 authorized  agent  of  the  manufacturer  who  sold  such vehicle to the
 consumer or to the dealer or other authorized  agent  who  attempted  to
 repair  or correct the defect or condition which necessitated the return
 and shall not be subject to any further shipping charges. Such fees  and
 charges  shall include but not be limited to all license fees, registra-
 tion fees and any similar governmental charges, less  an  allowance  for
 the consumer's use of the vehicle in excess of the first twelve thousand
 miles  of operation pursuant to the mileage deduction formula defined in
 paragraph four of subdivision (a) of  this  section,  and  a  reasonable
 allowance  for  any  damage  not attributable to normal wear or improve-
 ments.
   (2) A manufacturer which accepts return of the motor  vehicle  because
 the  motor  vehicle  does  not  conform to its warranty shall notify the
 commissioner of the department of motor vehicles that the motor  vehicle
 was  returned  to the manufacturer for nonconformity to its warranty and
 shall disclose, in  accordance  with  the  provisions  of  section  four
 hundred  seventeen-a  of  the  vehicle  and  traffic law prior to resale
 either at wholesale or retail, that it was previously  returned  to  the
 manufacturer for nonconformity to its warranty. Refunds shall be made to
 the  consumer  and  lienholder, if any, as their interests may appear on
 the records of ownership kept  by  the  department  of  motor  vehicles;
 PROVIDED,  HOWEVER, THAT A REFUND SHALL NOT BE ISSUED FOR A VEHICLE WITH
 MULTIPLE OWNERS OR LESSEES BEFORE NOTARIZED PROOF OF CONSENT IS PROVIDED
 AS DESCRIBED IN SUBDIVISION THREE OF SECTION THREE HUNDRED NINETY-SIX-QQ
 OF THIS CHAPTER. Refunds shall be accompanied by the proper  application
 for  credit or refund of state and local sales taxes as published by the
 department of taxation and finance and by a notice that  the  sales  tax
 paid  on  the  purchase  price,  lease  price  or  portion thereof being
 refunded is refundable by the commissioner of taxation  and  finance  in
 accordance  with  the  provisions  of  subdivision (f) of section eleven
 hundred thirty-nine of the tax law. If applicable, refunds shall be made
 to the lessor and lessee as their interests may appear on the records of
 ownership kept by the department of  motor  vehicles,  as  follows:  the
 lessee  shall  receive the capitalized cost and the lessor shall receive
 the lease price less the aggregate deposit and rental payments previous-
 ly paid to the lessor for the leased vehicle. The  terms  of  the  lease
 shall  be  deemed  terminated  contemporaneously  with  the  date of the
 arbitrator's decision and award and no  penalty  for  early  termination
 shall  be  assessed as a result thereof. Refunds shall be accompanied by
 the proper application form for credit or  refund  of  state  and  local
 sales  tax  as published by the department of taxation and finance and a
 notice that the sales tax paid on the lease  price  or  portion  thereof
 being refunded is refundable by the commissioner of taxation and finance
 in  accordance  with the provisions of subdivision (f) of section eleven
 hundred thirty-nine of the tax law.
   § 7. Subdivision (k) of section 198-a of the general business law,  as
 amended  by  chapter  611  of  the  laws  of 2005, is amended to read as
 follows:
   (k) Each consumer shall have the  option  of  submitting  any  dispute
 arising  under  this section upon the payment of a prescribed filing fee
 to an alternate arbitration  mechanism  established  pursuant  to  regu-
 lations  promulgated  hereunder  by the New York state attorney general.
 Upon application of the consumer and payment  of  the  filing  fee,  all

 A. 8370                             5
 
 manufacturers  shall  submit  to  such  alternate arbitration; PROVIDED,
 HOWEVER, THE CONSENT OF ALL CONSUMERS IS NEEDED PRIOR TO  SUBMISSION  OF
 AN APPLICATION FOR A VEHICLE INVOLVING MULTIPLE CONSUMERS.
   Such  alternate arbitration shall be conducted by a professional arbi-
 trator or arbitration firm appointed by  and  under  regulations  estab-
 lished  by  the  New  York  state attorney general. Such mechanism shall
 insure the personal objectivity of its arbitrators and the right of each
 party to present its case, to be in attendance during  any  presentation
 made by the other party and to rebut or refute such presentation. In all
 other  respects,  such alternate arbitration mechanism shall be governed
 by article seventy-five of the civil practice law and  rules;  provided,
 however,  that  notwithstanding  paragraph  (i)  of  subdivision  (a) of
 section seventy-five hundred two of the civil practice  law  and  rules,
 special  proceedings  brought  before  a  court pursuant to such article
 seventy-five in relation to an arbitration hereunder  shall  be  brought
 only  in  the county where the consumer resides or where the arbitration
 was held or is pending.
   § 8. Subparagraphs (iii) and (iv) of paragraph 3 of subdivision (m) of
 section 198-a of the general business law, as added by  chapter  799  of
 the laws of 1986, is amended and a new subparagraph (v) is added to read
 as follows:
   (iii)  the number and total dollar amount of awards where some form of
 reimbursement for expenses or compensation for losses was the most prom-
 inent remedy, the amount or value of each award and the number  of  such
 awards that were complied with in a timely manner; [and]
   (iv)  the average number of days from the date of a consumer's initial
 request to arbitrate until the date of the final  arbitrator's  decision
 and  the  average number of days from the date of the final arbitrator's
 decision to the date on which  performance  was  satisfactorily  carried
 out; AND
   (V)  THE  NOTARIZED  PROOF OF CONSENT FORM AS DESCRIBED IN SUBDIVISION
 THREE OF SECTION THREE HUNDRED NINETY-SIX-QQ  OF  THIS  CHAPTER  IF  THE
 MOTOR VEHICLE HAS MULTIPLE CONSUMERS.
   §  9.  Paragraph  1  of  subdivision c of section 198-b of the general
 business law, as amended by chapter 444 of the laws of 1989, is  amended
 to read as follows:
   1. If the dealer or his agent fails to correct a malfunction or defect
 as required by the warranty specified in this section which substantial-
 ly  impairs  the value of the used motor vehicle to the consumer after a
 reasonable period of time, the dealer shall accept return  of  the  used
 motor  vehicle  from  the  consumer  and refund to the consumer the full
 purchase price, or in the case of a lease  contract  all  payments  made
 under  the  contract,  including  sales  or compensating use tax, less a
 reasonable allowance for any damage not attributable to normal  wear  or
 usage,  and  adjustment  for  any modifications which either increase or
 decrease the market value of the vehicle or of the lease  contract,  and
 in  the  case of a lease contract, shall cancel all further payments due
 from the consumer under the lease contract.  A DEALER SHALL  NOT  REFUND
 THE  PURCHASE  PRICE  OR  CANCEL THE LEASE FOR A MOTOR VEHICLE INVOLVING
 MULTIPLE CONSUMERS BEFORE THE DEALER IS IN  POSSESSION  OF  A  NOTARIZED
 PROOF OF CONSENT FORM AS DESCRIBED IN SUBDIVISION THREE OF SECTION THREE
 HUNDRED NINETY-SIX-QQ OF THIS CHAPTER. In determining the purchase price
 to  be  refunded  or  in  determining  all  payments  made under a lease
 contract to be refunded, the purchase price, or all payments made  under
 a  lease  contract,  shall be deemed equal to the sum of the actual cash
 difference paid for the used motor vehicle, or for the  lease  contract,

 A. 8370                             6
 
 plus,  if  the dealer elects to not return any vehicles traded-in by the
 consumer, the wholesale value of any such traded-in vehicles  as  listed
 in  the  National Auto Dealers Association Used Car Guide, or such other
 guide as may be specified in regulations promulgated by the commissioner
 of  motor vehicles, as adjusted for mileage, improvements, and any major
 physical or mechanical defects in the traded-in vehicle at the  time  of
 trade-in.  The  dealer  selling  or leasing the used motor vehicle shall
 deliver to the consumer a written notice including conspicuous  language
 indicating  that if the consumer should be entitled to a refund pursuant
 to this section, the value of any vehicle traded-in by the consumer,  if
 the  dealer  elects  to  not  return it to the consumer, for purposes of
 determining the amount of such refund will be determined by reference to
 the National Auto Dealers Association Used Car Guide wholesale value, or
 such other guide as may be approved by the commissioner of  motor  vehi-
 cles,  as  adjusted for mileage, improvements, and any major physical or
 mechanical defects, rather than the value listed in the sales  contract.
 Refunds  shall  be made to the consumer and lienholder, if any, as their
 interests may appear on the records of ownership kept by the  department
 of  motor  vehicles. If the amount to be refunded to the lienholder will
 be insufficient to discharge the  lien,  the  dealer  shall  notify  the
 consumer  in  writing  by registered or certified mail that the consumer
 has thirty days to pay the lienholder the amount  which,  together  with
 the amount to be refunded by the dealer, will be sufficient to discharge
 the  lien. The notice to the consumer shall contain conspicuous language
 warning the consumer that failure to pay such funds  to  the  lienholder
 within  thirty  days will terminate the dealer's obligation to provide a
 refund. If the consumer fails to make such payment within  thirty  days,
 the  dealer  shall  have  no  further responsibility to provide a refund
 under this section.  Alternatively, the dealer may  elect  to  offer  to
 replace  the  used  motor vehicle with a comparably priced vehicle, with
 such adjustment in price as the parties may agree to. The consumer shall
 not be obligated to accept a replacement vehicle, but may instead  elect
 to receive the refund provided under this section. It shall be an affir-
 mative defense to any claim under this section that:
   (a)  The  malfunction  or  defect  does  not substantially impair such
 value; or
   (b) The malfunction or defect is  the  result  of  abuse,  neglect  or
 unreasonable modifications or alterations of the used motor vehicle.
   §  10. Subparagraph 5 of paragraph 1 of subdivision f of section 198-b
 of the general business law, as separately amended by chapters  444  and
 609 of the laws of 1989, is amended to read as follows:
   5.  If  the  same  problem  cannot  be  repaired  after  three or more
 attempts, you are entitled to return the car and  receive  a  refund  of
 your  purchase  price or of all payments made under your lease contract,
 and of sales tax and fees, minus a reasonable allowance for  any  damage
 not  attributable  to  normal usage or wear, and, in the case of a lease
 contract, a cancellation of  all  further  payments  you  are  otherwise
 required  to make under the lease contract.  IF THERE ARE MULTIPLE INDI-
 VIDUALS WHO SIGNED FOR THE CAR,  ALL  INDIVIDUALS  MUST  INDICATE  THEIR
 CONSENT  BEFORE  YOU MAY RECEIVE A REFUND FOR THE CAR OR HAVE YOUR LEASE
 CANCELLED.
   § 11. Paragraph 3 of subdivision (b) and subdivision  (c)  of  section
 198-c  of  the general business law, as added by chapter 254 of the laws
 of 2010, are amended to read as follows:
   (3) The time period specified in paragraph one or two of this subdivi-
 sion may be shortened if the dealer and consumer agree, in writing, to a

 A. 8370                             7
 
 shorter time period; PROVIDED, HOWEVER, WHEN THERE ARE MULTIPLE  CONSUM-
 ERS  TO  THE  TRANSACTION THE DEALER SHALL BE IN POSSESSION OF THE NOTA-
 RIZED PROOF OF CONSENT FORM AS DESCRIBED IN SUBDIVISION THREE OF SECTION
 THREE  HUNDRED  NINETY-SIX-QQ  OF  THIS CHAPTER BEFORE SUCH AGREEMENT IS
 EXECUTED.
   (c) If the agreement gives either  party  the  right  to  rescind  the
 entire  agreement  within  a  reasonable  time period, rescission of the
 entire agreement shall effectively rescind the obligations  pursuant  to
 this  section  without  violating  this section; PROVIDED, HOWEVER, WHEN
 THERE ARE MULTIPLE CONSUMERS TO THE TRANSACTION THE DEALER SHALL  BE  IN
 POSSESSION OF THE NOTARIZED PROOF OF CONSENT FORM AS DESCRIBED IN SUBDI-
 VISION  THREE  OF  SECTION  THREE  HUNDRED NINETY-SIX-QQ OF THIS CHAPTER
 BEFORE SUCH AGREEMENT IS EXECUTED IN ORDER FOR  SUCH  RESCISSION  TO  BE
 VALID.
   §  12.  This  act  shall  take effect on the one hundred eightieth day
 after it shall have become a  law;  provided,  however,  that  effective
 immediately,  the addition, amendment and/or repeal of any rule or regu-
 lation necessary for the implementation of this  act  on  its  effective
 date  are  authorized and directed to be made and completed on or before
 such effective date.