S T A T E O F N E W Y O R K
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11128
I N A S S E M B L Y
November 6, 2020
___________
Introduced by COMMITTEE ON RULES -- (at request of M. of A. Rodriguez)
-- read once and referred to the Committee on Consumer Affairs and
Protection
AN ACT to amend the general business law, in relation to third-party
food delivery service charges during COVID-19; and providing for the
repeal of certain provisions upon the expiration thereof
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Legislative findings and intent. The legislature hereby
finds that on March 7, 2020, the governor of New York declared a state
of emergency related to the COVID-19 pandemic; and has issued various
emergency directives related to the COVID-19 pandemic that have
restricted the ability of restaurants and other food providers to fully
operate their businesses.
These social distancing measures required to mitigate the spread of
COVID-19 means that delivery and take-out options from restaurants and
other food establishments are critical to the public's accessibility of
food and addressing any community food insecurity.
Restaurants and other food establishments are restricted in their
ability to fully utilize their dine-in capabilities and the resultant
reliance on take-out and delivery service places a sudden and severe
financial strain on many establishments, particularly those that are
small, independently owned or minority-owned businesses that already
operate on thin margins. Adding to financial pressures in the industry
that predate the current public health crisis, it is in the public
interest to take action to maximize restaurant revenue from delivery and
pick-up orders to enable these businesses to survive the impacts of the
COVID-19 pandemic and continue supporting a diverse workforce and
contributing to the vitality of our community.
Therefore, it is the intent of the legislature to create a statewide
policy and fee structure for third-party food delivery services during
the state declared COVID-19 emergency while food service establishments
have capacity restrictions.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD17385-04-0
A. 11128 2
§ 2. The general business law is amended by adding a new section 391-v
to read as follows:
§ 391-V. THIRD-PARTY FOOD DELIVERY SERVICE CHARGES DURING COVID-19. 1.
DEFINITIONS. FOR PURPOSES OF THIS SECTION, THE FOLLOWING TERMS SHALL
HAVE THE FOLLOWING MEANINGS:
(A) "DECLARED EMERGENCY" MEANS THE PERIOD DURING WHICH A STATE DISAS-
TER EMERGENCY HAS BEEN DECLARED BY THE GOVERNOR THAT RESULTS IN LIMITA-
TIONS ON ON-PREMISES DINING FOR RESTAURANTS AS A RESULT OF THE COVID-19
PANDEMIC.
(B) "DELIVERY FEE" MEANS A FEE CHARGED BY A THIRD-PARTY FOOD DELIVERY
SERVICE FOR PROVIDING A FOOD SERVICE ESTABLISHMENT WITH A SERVICE THAT
DELIVERS FOOD FROM SUCH ESTABLISHMENT TO CUSTOMERS. DELIVERY FEE SHALL
NOT INCLUDE ANY OTHER FEE THAT MAY BE CHARGED BY A THIRD-PARTY FOOD
DELIVERY SERVICE TO A FOOD SERVICE ESTABLISHMENT, INCLUDING BUT NOT
LIMITED TO, FEES FOR LISTING OR ADVERTISING THE FOOD SERVICE ESTABLISH-
MENT ON THE THIRD-PARTY FOOD DELIVERY SERVICE PLATFORM OR FEES RELATED
TO PROCESSING THE ONLINE ORDER.
(C) "FOOD SERVICE ESTABLISHMENT" MEANS A PLACE WHERE FOOD IS PREPARED
AND INTENDED FOR INDIVIDUAL PORTION SERVICE AND INCLUDES THE SITE AT
WHICH SUCH INDIVIDUAL PORTIONS ARE PROVIDED, WHETHER CONSUMPTION OCCURS
ON OR OFF THE PREMISES. FOOD SERVICE ESTABLISHMENT SHALL NOT INCLUDE
FOOD PROCESSING ESTABLISHMENTS, RETAIL FOOD STORES, PRIVATE HOMES WHERE
FOOD IS PREPARED OR SERVED FOR FAMILY CONSUMPTION, AND FOOD SERVICE
OPERATIONS WHERE A DISTINCT GROUP MUTUALLY PROVIDES, PREPARES, SERVES
AND CONSUMES THE FOOD, INCLUDING BUT NOT LIMITED TO, A COVERED-DISH
SUPPER LIMITED TO A CONGREGATION, CLUB OR FRATERNAL ORGANIZATION.
(D) "ONLINE ORDER" MEANS ANY ORDER PLACED BY A CUSTOMER THROUGH, OR
WITH THE ASSISTANCE OF, A PLATFORM PROVIDED BY A THIRD-PARTY FOOD DELIV-
ERY SERVICE, INCLUDING BUT NOT LIMITED TO, A TELEPHONE ORDER.
(E) "PURCHASE PRICE" MEANS THE TOTAL PRICE OF THE ITEMS CONTAINED IN
AN ONLINE ORDER THAT ARE LISTED ON THE MENU OF THE FOOD SERVICE ESTAB-
LISHMENT WHERE SUCH ORDER IS PLACED. PURCHASE PRICE SHALL NOT INCLUDE
TAXES, GRATUITIES AND ANY OTHER FEES THAT MAY MAKE UP THE TOTAL COST TO
THE CUSTOMER OF AN ONLINE ORDER.
(F) "THIRD-PARTY FOOD DELIVERY SERVICE" MEANS ANY WEBSITE, MOBILE
APPLICATION OR OTHER INTERNET SERVICE THAT OFFERS OR ARRANGES FOR THE
SALE AND SAME-DAY DELIVERY OR SAME-DAY PICKUP OF FOOD AND BEVERAGES
PREPARED BY NO FEWER THAN TWENTY FOOD SERVICE ESTABLISHMENTS LOCATED IN
THE STATE THAT ARE OWNED AND OPERATED BY DIFFERENT PERSONS.
2. FEE LIMITS DURING DECLARED EMERGENCIES. (A) NO THIRD-PARTY FOOD
DELIVERY SERVICE SHALL CHARGE A FOOD SERVICE ESTABLISHMENT ANY COMBINA-
TION OF FEES, COMMISSIONS OR COSTS, INCLUDING A DELIVERY FEE, FOR SUCH
THIRD-PARTY FOOD DELIVERY SERVICE'S SERVICES THAT TOTAL MORE THAN TWENTY
PERCENT OF THE PURCHASE PRICE OF AN ONLINE ORDER PLUS CREDIT CARD PROC-
ESSING FEES.
(B) NO THIRD-PARTY FOOD DELIVERY SERVICE SHALL CHARGE A FOOD SERVICE
ESTABLISHMENT A DELIVERY FEE THAT TOTALS MORE THAN FIFTEEN PERCENT OF
THE PURCHASE PRICE OF AN ONLINE ORDER.
(C) NO THIRD-PARTY FOOD DELIVERY SERVICE SHALL REDUCE THE COMPEN-
SATION, INCLUDING BUT NOT LIMITED TO, ANY TIP OR GRATUITY, PAID TO ANY
WORKER AS A RESULT OF FEES CHARGED DURING THE DECLARED EMERGENCY.
3. PENALTIES AND ENFORCEMENT. WHENEVER THERE SHALL BE A 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 TO ENJOIN AND RESTRAIN THE CONTIN-
UANCE OF SUCH VIOLATION; AND IF IT SHALL APPEAR TO THE SATISFACTION OF
A. 11128 3
THE COURT OR JUSTICE THAT THE DEFENDANT HAS, IN FACT, VIOLATED THIS
SECTION, AN INJUNCTION MAY BE ISSUED BY SUCH 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 AND
DIRECT RESTITUTION OF AN AMOUNT NOT TO EXCEED THE AMOUNT OF FEES
COLLECTED IN VIOLATION OF THIS SECTION BY A THIRD-PARTY FOOD DELIVERY
SERVICE, ATTORNEYS' FEES, AND SUCH OTHER REMEDIES AS THE COURT MAY DEEM
APPROPRIATE. WHENEVER THE COURT SHALL DETERMINE THAT A VIOLATION OF THIS
SECTION HAS OCCURRED, THE COURT MAY IMPOSE A CIVIL PENALTY OF NOT MORE
THAN ONE THOUSAND DOLLARS FOR EACH VIOLATION. EACH DAY A VIOLATION OF
THIS SECTION IS CONTINUED AND EACH FOOD SERVICE ESTABLISHMENT CHARGED A
FEE IN VIOLATION OF THIS SECTION SHALL CONSTITUTE A SEPARATE VIOLATION.
IN CONNECTION WITH ANY SUCH PROPOSED APPLICATION THE ATTORNEY GENERAL IS
AUTHORIZED TO TAKE PROOF AND MAKE A DETERMINATION OF THE RELEVANT FACTS
AND TO ISSUE SUBPOENAS IN ACCORDANCE WITH THE CIVIL PRACTICE LAW AND
RULES.
4. PREEMPTION. AT ALL TIMES, WHETHER OR NOT A DECLARED EMERGENCY IS
IN EFFECT, THE PROVISIONS OF THIS SECTION SHALL SUPERSEDE AND PREEMPT
ANY COUNTY OR MUNICIPAL OR OTHER LOCAL LAW, ORDINANCE, RESOLUTION, OR
REGULATION CONCERNING THE RELATIONSHIP BETWEEN A THIRD-PARTY FOOD DELIV-
ERY SERVICE AND ANY FOOD SERVICE ESTABLISHMENT UTILIZING ITS SERVICES.
§ 3. This act shall take effect seven days after it shall have become
a law provided that section one of this act and subdivisions 1, 2 and 3
of section 391-v of the general business law as added by section two of
this act shall expire and be deemed repealed upon the expiration of the
declared state of emergency relating to the novel coronavirus (COVID-
19); and provided, further, that the superintendent of financial
services shall notify the legislative bill drafting commission upon
occurrence of the expiration of the state disaster emergency declared by
executive order number 202 and any further amendments or modifications,
and as may be further extended pursuant to section 28 of the executive
law, in order that the commission may maintain an accurate and timely
effective data base of the official text of the laws of the state of New
York in furtherance of effectuating the provisions of section 44 of the
legislative law and section 70-b of the public officers law.