S T A T E O F N E W Y O R K
________________________________________________________________________
S. 5380 A. 6884
2017-2018 Regular Sessions
S E N A T E - A S S E M B L Y
March 23, 2017
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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:
Section 1. Subdivision 1 of section 736 of the general business law,
as added by chapter 616 of the laws of 1988, is amended and two new
subdivisions 4 and 5 are added to read as follows:
1. "Automobile broker business" means any person who, for a fee,
commission or other valuable consideration paid by a consumer offers to
provide, provides, or represents that he will provide a service of
purchasing, arranging, assisting, FACILITATING or effecting the purchase
of an automobile as agent, broker, or intermediary for a consumer.
"AUTOMOBILE BROKER BUSINESS" SHALL ALSO INCLUDE ANY PERSON WHO ACTS AS
AN AGENT, BROKER OR INTERMEDIARY IN EFFECTUATING OR FACILITATING THE
LEASE OF AN AUTOMOBILE, REGARDLESS OF WHETHER SUCH PERSON RECEIVES
CONSIDERATION FROM THE CONSUMER. "Automobile broker business" does not
include any person registered as a dealer pursuant to article sixteen of
the vehicle and traffic law, or any person who sells, offers for sale OR
LEASE or acts as agent, broker or intermediary in effecting the purchase
OR LEASE of three or less automobiles in any calendar year.
4. "COMMISSIONER" MEANS THE COMMISSIONER OF THE DEPARTMENT OF MOTOR
VEHICLES.
5. "DIVISION" MEANS THE DIVISION OF CRIMINAL JUSTICE SERVICES.
§ 2. The general business law is amended by adding five new sections
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
§ 736-A. LICENSE AND SURETY BOND REQUIRED. 1. NO PERSON, CORPORATION,
PARTNERSHIP OR FIRM SHALL HEREAFTER CARRY ON THE BUSINESS OF AN AUTOMO-
BILE BROKER, AS DEFINED IN SECTION SEVEN HUNDRED THIRTY-SIX OF THIS
ARTICLE, WITHOUT FIRST HAVING (A) RECEIVED A LICENSE TO ENGAGE IN SUCH
PRACTICE IN THE MANNER PRESCRIBED IN THIS ARTICLE, AND (B) OBTAINED A
SURETY BOND PRESCRIBED IN SECTION SEVEN HUNDRED FORTY-A OF THIS ARTICLE.
2. NO PERSON SHALL OWN, CONTROL OR OPERATE, WHETHER AS A SOLE PROPRIE-
TOR, PARTNER, SHAREHOLDER, OFFICER, INDEPENDENT CONTRACTOR OR OTHER
PERSON, AN AUTOMOBILE BROKER BUSINESS, AS DEFINED IN SECTION SEVEN
HUNDRED THIRTY-SIX OF THIS ARTICLE, WITHOUT FIRST HAVING (A) RECEIVED A
LICENSE TO ENGAGE IN SUCH PRACTICE IN THE MANNER PRESCRIBED IN THIS
ARTICLE, AND (B) OBTAINED A SURETY BOND PRESCRIBED IN SECTION SEVEN
HUNDRED FORTY-A OF THIS ARTICLE.
§ 736-B. APPLICATION FOR LICENSES. 1. APPLICATION FOR A LICENSE
REQUIRED UNDER THIS ARTICLE SHALL BE IN WRITING, UNDER OATH, AND IN THE
FORM PRESCRIBED BY THE COMMISSIONER, AND SHALL CONTAIN THE FOLLOWING:
(A) THE EXACT NAME AND THE ADDRESS OF THE APPLICANT AND ITS DATE OF
INCORPORATION;
(B) THE NAME AND THE BUSINESS AND RESIDENTIAL ADDRESS OF EACH PRINCI-
PAL AND OFFICER OF THE APPLICANT;
(C) IF THE APPLICANT HAS ANY COMMON OWNERSHIP WITH ANY NEW MOTOR VEHI-
CLE DEALER, AS DEFINED IN SECTION FOUR HUNDRED FIFTEEN OF THE VEHICLE
AND TRAFFIC LAW, THE COMPLETE NAME AND ADDRESS OF SUCH DEALERSHIP;
(D) THE COMPLETE ADDRESS WHERE THE BUSINESS OF THE APPLICANT IS TO BE
CONDUCTED, SHOWING THE STREET AND NUMBER, IF ANY, POST OFFICE AND BUILD-
ING AND ROOM NUMBER, IF ANY, THE OFFICE BUILDING AND ROOM NUMBER, IF
ANY, AND THE MUNICIPALITY AND COUNTY;
(E) IF THE APPLICANT HAS ONE OR MORE BRANCHES, SUBSIDIARIES OR AFFIL-
IATES OPERATING IN THE STATE, THE COMPLETE ADDRESS OF EACH SUCH PLACE OF
BUSINESS; AND
(F) A COMPLETE SET OF TWO FINGERPRINT CARDS FOR EACH PRINCIPAL AND
OFFICER OF THE APPLICANT ON A STANDARD FINGERPRINT CARD APPROVED BY THE
DIVISION AND A FEE PURSUANT TO SUBDIVISION EIGHT-A OF SECTION EIGHT
HUNDRED THIRTY-SEVEN OF THE EXECUTIVE LAW, AND AMENDMENTS THERETO, FOR
THE COST OF THE DIVISION'S FULL SEARCH AND RETAIN PROCEDURES, WHICH FEE
SHALL BE REMITTED BY THE COMMISSIONER TO THE DIVISION FOR DEPOSIT BY THE
COMPTROLLER INTO THE GENERAL FUND. BEFORE APPROVING SUCH APPLICATION THE
COMMISSIONER, OR HIS OR HER DESIGNEE, SHALL FORWARD ONE COPY OF SUCH
FINGERPRINT CARD AND THE PROCESSING FEE TO THE DIVISION UPON RECEIPT OF
SUCH FINGERPRINTS. THE DIVISION SHALL FORWARD TO THE COMMISSIONER A
REPORT WITH RESPECT TO THE APPLICANT'S PREVIOUS CRIMINAL HISTORY, IF
ANY, OR A STATEMENT THAT THE APPLICANT HAS NO PREVIOUS CRIMINAL HISTORY
ACCORDING TO ITS FILES. IF ADDITIONAL COPIES OF FINGERPRINTS ARE
REQUIRED, THE APPLICANT SHALL FURNISH THEM UPON REQUEST.
2. UPON ORIGINAL APPLICATION FOR A LICENSE TO OPERATE AN AUTOMOBILE
BROKER BUSINESS, THE APPLICANT SHALL PAY AN APPLICATION FEE, IN SUCH
AMOUNT AS MAY BE DETERMINED BY THE COMMISSIONER, NOT TO EXCEED THREE
HUNDRED DOLLARS. UPON APPLICATION FOR A LICENSE RENEWAL, THE LICENSEE
SHALL PAY A RENEWAL PROCESSING FEE IN SUCH AMOUNT AS SHALL BE DETERMINED
BY THE COMMISSIONER, NOT TO EXCEED THREE HUNDRED DOLLARS.
§ 736-C. CONDITIONS PRECEDENT TO LICENSING. UPON FILING OF AN APPLICA-
TION FOR A LICENSE, IF THE COMMISSIONER SHALL BE SATISFIED OF THE GOOD
CHARACTER, COMPETENCY AND INTEGRITY OF THE APPLICANT, AND OF THE PRINCI-
PALS AND OFFICERS THEREOF ARE SUCH AS TO COMPLY WITH THE PROVISIONS OF
THIS ARTICLE, HE OR SHE SHALL THEREUPON ISSUE A LICENSE IN DUPLICATE TO
OPERATE AN AUTOMOBILE BROKER BUSINESS IN ACCORDANCE WITH THE PROVISIONS
S. 5380 3 A. 6884
OF THIS ARTICLE. THE COMMISSIONER SHALL TRANSMIT ONE COPY OF SUCH
LICENSE TO THE LICENSEE AND FILE ANOTHER WITH THE COMMISSIONER. SUCH
LICENSE SHALL REMAIN IN FULL FORCE AND EFFECT FOR A PERIOD OF TWO YEARS
UNLESS IT IS SURRENDERED BY THE LICENSEE OR REVOKED OR SUSPENDED AS
HEREINAFTER PROVIDED; IF THE COMMISSIONER SHALL NOT SO FIND, THE COMMIS-
SIONER SHALL NOT ISSUE SUCH LICENSE AND THE COMMISSIONER SHALL NOTIFY
THE APPLICANT OF THE DENIAL IN WRITING. THE COMMISSIONER SHALL APPROVE
OR DENY EVERY APPLICATION FOR LICENSE HEREUNDER WITHIN NINETY DAYS FROM
THE FILING THEREOF.
§ 736-D. LICENSING. 1. EACH LICENSE ISSUED UNDER THIS ARTICLE SHALL
STATE THE ADDRESS OR ADDRESSES AT WHICH THE BUSINESS IS TO BE CONDUCTED
AND SHALL STATE FULLY THE NAME OF THE LICENSEE, AND THE DATE AND PLACE
OF ITS INCORPORATION AND THE EXPIRATION DATE OF THE LICENSE. A COPY OF
SUCH LICENSE SHALL BE PROMINENTLY POSTED IN EACH PLACE OF BUSINESS OF
THE LICENSEE. SUCH LICENSE SHALL NOT BE TRANSFERABLE OR ASSIGNABLE.
2. IN THE EVENT THE LOCATION AT WHICH THE BUSINESS IS TO BE CONDUCTED
SHALL BE CHANGED, THE LICENSEE SHALL FORTHWITH NOTIFY THE COMMISSIONER
IN WRITING, WHO SHALL THEREUPON WITHOUT CHARGE ATTACH TO THE LICENSE A
RIDER SETTING FORTH SUCH CHANGED LOCATION.
3. IN THE EVENT THAT THERE SHALL BE ANY CHANGE AMONG THE PRINCIPALS OR
OFFICERS OF ANY LICENSEE, THE LICENSEE SHALL FORTHWITH NOTIFY THE
COMMISSIONER IN WRITING, OF THE NAME AND ADDRESS OF EACH NEW PRINCIPAL
OR OFFICER, AND SHALL SUBMIT A COMPLETE SET OF TWO FINGERPRINT CARDS FOR
EACH SUCH PRINCIPAL OR OFFICER IN ACCORDANCE WITH THE PROVISIONS OF
PARAGRAPH (F) OF SUBDIVISION ONE OF SECTION SEVEN HUNDRED THIRTY-SIX-B
OF THIS ARTICLE.
4. PRIOR TO OR UPON THE SALE OR TRANSFER OF ALL OR THE MAJORITY OF THE
STOCK OR ASSETS OF ANY AUTOMOBILE BROKER BUSINESS, THE NEW PRINCIPALS OR
OFFICERS SHALL APPLY FOR A NEW LICENSE WITH THE COMMISSIONER IN ACCORD-
ANCE WITH THE PROVISIONS OF SECTION SEVEN HUNDRED THIRTY-SIX-B AND
SECTION SEVEN HUNDRED THIRTY-SIX-C OF THIS ARTICLE. SUCH APPLICATION
SHALL BE MADE WITHIN SIXTY DAYS OF SUCH SALE OR TRANSFER.
5. A LICENSE GRANTED UNDER THE PROVISIONS OF THIS ARTICLE MAY BE
RENEWED BY THE COMMISSIONER UPON APPLICATION THEREFOR BY THE LICENSEE,
IN SUCH FORM AS THE COMMISSIONER MAY PRESCRIBE, ACCOMPANIED BY THE NON-
REFUNDABLE RENEWAL PROCESSING FEE PURSUANT TO SUBDIVISION TWO OF SECTION
SEVEN HUNDRED THIRTY-SIX-B OF THIS ARTICLE. IN NO EVENT WILL RENEWAL BE
GRANTED MORE THAN SIX MONTHS AFTER THE DATE OF EXPIRATION OF A LICENSE.
NO PERSON, FIRM, COMPANY, PARTNERSHIP OR CORPORATION SHALL CARRY ON ANY
BUSINESS SUBJECT TO THIS ARTICLE DURING ANY PERIOD WHICH MAY EXIST
BETWEEN THE DATE OF EXPIRATION OF A LICENSE AND THE RENEWAL THEREOF.
§ 736-E. SCOPE AND DUTIES UNDER AUTOMOBILE BROKER LICENSE. 1. THE
AUTOMOBILE BROKER LICENSE SHALL PERMIT A DULY LICENSED AUTOMOBILE BROKER
UNDER THIS SECTION TO ENGAGE IN THE AUTOMOBILE BROKER BUSINESS AS
DEFINED IN SECTION SEVEN HUNDRED THIRTY-SIX OF THIS ARTICLE. A DULY
LICENSED AUTOMOBILE BROKER MAY NOT:
(A) DELIVER A VEHICLE TO A CONSUMER AT ANY LOCATION OTHER THAN THE
DULY LICENSED NEW OR USED DEALERSHIP THAT THE BROKER ARRANGED THE SALE
THROUGH;
(B) TRANSMIT, HANDLE OR STORE ANY DOCUMENTS OR MATERIALS WITH
PERSONALLY IDENTIFYING INFORMATION, OR FINANCIAL INFORMATION OF THE
CONSUMER; OR
(C) DISPLAY FOR SALE OR LEASE ANY NEW OR USED MOTOR VEHICLES WITHOUT A
VALID NEW OR USED CAR DEALERSHIP LICENSE.
2. A DULY LICENSED BROKER UNDER THIS SECTION MUST DISCLOSE TO THE
CONSUMER ANY RELATIONSHIP WITH ANY DEALERSHIP, AND THE AMOUNT OF COMPEN-
S. 5380 4 A. 6884
SATION PAID TO THE BROKER FOR ARRANGING THE SALE OF THE VEHICLE FOR THE
DEALER.
§ 3. Section 744 of the general business law is renumbered section 745
and a new section 744 is added to read as follows:
§ 744. INVESTIGATION BY THE ATTORNEY GENERAL. THE ATTORNEY GENERAL
SHALL INVESTIGATE NON-LICENSED AUTOMOBILE BROKER BUSINESSES ENGAGED IN
THE LEASING OF MOTOR VEHICLES AND SHALL MAKE RECOMMENDATIONS TO THE
LEGISLATURE CONCERNING LEGISLATIVE PROPOSALS TO EFFECTUATE THE PURPOSES
OF THIS ARTICLE.
§ 4. Subdivision 1 of section 740-a of the general business law, as
added by chapter 579 of the laws of 2011, is amended to read as follows:
1. Automobile broker businesses shall obtain and continue in effect a
surety bond in an amount of [seventy-five] ONE HUNDRED TWENTY-FIVE thou-
sand dollars executed by a surety company authorized to transact busi-
ness in the state by the [insurance] department OF FINANCIAL SERVICES of
the state or its successor. The bonds shall be approved as to form by
the secretary of state and shall be conditioned on the automobile broker
business' payment of all valid bank drafts, including checks, drawn for
the purchase of motor vehicles and safekeeping of all customer deposits
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.
§ 5. This act shall take effect on the ninetieth day after it shall
have become a law; provided, however, that the commissioner of the
department of motor vehicles shall take actions necessary to provide for
the issuance of licenses pursuant to section 736-d of the general busi-
ness law, as added by section two of this act, prior to such date.