Senate Bill S565

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                    565
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                              January 5, 2023
                                ___________
 
 Introduced by Sens. KAVANAGH, BORRELLO, BROUK, COONEY, HOYLMAN, JACKSON,
   KRUEGER, PARKER -- read twice and ordered printed, and when printed to
   be committed to the Committee on Consumer Protection
 
 AN  ACT  to  amend  the general business law, in relation to third-party
   food delivery service charges

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The general business law is amended by adding a new section
 391-z to read as follows:
   § 391-Z. THIRD-PARTY FOOD DELIVERY SERVICE CHARGE. 1. FOR THE PURPOSES
 OF THIS SECTION, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS:
   (A)  "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. THE TERM DOES NOT
 INCLUDE ANY OTHER FEE THAT MAY BE CHARGED BY A THIRD-PARTY FOOD DELIVERY
 SERVICE TO A FOOD SERVICE ESTABLISHMENT, SUCH AS  FEES  FOR  LISTING  OR
 ADVERTISING  THE  FOOD  SERVICE  ESTABLISHMENT  ON  THE THIRD-PARTY FOOD
 DELIVERY SERVICE PLATFORM OR  FEES  RELATED  TO  PROCESSING  THE  ONLINE
 ORDER.
   (B)  "FOOD SERVICE ESTABLISHMENT" MEANS A PLACE WHERE FOOD IS PROVIDED
 FOR INDIVIDUAL PORTION SERVICE DIRECTLY TO  THE  CONSUMER  WHETHER  SUCH
 FOOD  IS PROVIDED FREE OF CHARGE OR SOLD, AND WHETHER CONSUMPTION OCCURS
 ON OR OFF THE PREMISES OR IS PROVIDED FROM A PUSHCART, STAND OR VEHICLE.
   (C) "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 A TELEPHONE ORDER.
   (D) "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. SUCH TERM DOES NOT  INCLUDE  TAXES,
 GRATUITIES  AND  ANY  OTHER  FEES THAT MAY MAKE UP THE TOTAL COST TO THE
 CUSTOMER OF AN ONLINE ORDER.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD01701-01-3
              

 S. 565                              2
 
   (E) "THIRD-PARTY FOOD DELIVERY  SERVICE"  MEANS  ANY  WEBSITE,  MOBILE
 APPLICATION  OR  OTHER  INTERNET SERVICE THAT OFFERS OR ARRANGES FOR THE
 SALE OF FOOD AND BEVERAGES PREPARED BY, AND  THE  SAME-DAY  DELIVERY  OR
 SAME-DAY  PICKUP  OF  FOOD AND BEVERAGES FROM, NO FEWER THAN TWENTY FOOD
 SERVICE  ESTABLISHMENTS LOCATED IN THE STATE THAT ARE OWNED AND OPERATED
 BY DIFFERENT PERSONS.
   (F) "TRANSACTION FEE" MEANS A CHARGE FOR THE PROCESSING OF  A  PAYMENT
 FOR AN ONLINE ORDER.
   2. NOTWITHSTANDING ANY OTHER LAW, RULE OR REGULATION:
   (A)  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 EACH ONLINE ORDER;
   (B)  IT  SHALL  BE UNLAWFUL FOR A THIRD-PARTY FOOD DELIVERY SERVICE TO
 CHARGE A FOOD SERVICE ESTABLISHMENT ANY FEE OR FEES, OTHER THAN A DELIV-
 ERY FEE PERMITTED UNDER PARAGRAPH (A) OF THIS SUBDIVISION, FOR  THE  USE
 OF SERVICES PROVIDED BY SUCH THIRD-PARTY DELIVERY SERVICE THAT IS GREAT-
 ER  THAN  FIVE  PERCENT  OF  THE  PURCHASE  PRICE  OF EACH ONLINE ORDER,
 PROVIDED THAT SUCH CAP SHALL NOT APPLY TO A TRANSACTION FEE FOR  USE  OF
 THEIR  SERVICE.  IT  SHALL  FURTHER  BE  UNLAWFUL FOR A THIRD-PARTY FOOD
 DELIVERY SERVICE TO CHARGE A FOOD SERVICE  ESTABLISHMENT  A  TRANSACTION
 FEE  THAT TOTALS   MORE THAN THREE PERCENT OF THE PURCHASE PRICE OF EACH
 ONLINE ORDER, PROVIDED  HOWEVER THAT A THIRD-PARTY FOOD DELIVERY SERVICE
 MAY CHARGE  A FOOD SERVICE ESTABLISHMENT A TRANSACTION FEE OF MORE  THAN
 THREE  PERCENT  OF  THE  PURCHASE  PRICE OF AN ONLINE ORDER IF: (I) SUCH
 TRANSACTION FEE IS CHARGED TO THE FOOD SERVICE ESTABLISHMENT IN THE SAME
 AMOUNT AS THE  CHARGE IMPOSED UPON THE THIRD-PARTY FOOD DELIVERY SERVICE
 FOR SUCH  ONLINE ORDER, AND (II) SUCH THIRD-PARTY FOOD DELIVERY  SERVICE
 CAN  PROVIDE  PROOF  OF SUCH CHARGE IMPOSED UPON IT TO BOTH THE ATTORNEY
 GENERAL AND THE RELEVANT FOOD SERVICE ESTABLISHMENT UPON REQUEST.
   (C) ANY FEE OR OTHER CHARGES FROM A THIRD-PARTY FOOD DELIVERY  SERVICE
 TO A FOOD SERVICE ESTABLISHMENT BEYOND SUCH MAXIMUM FIVE PERCENT FEE PER
 ORDER  AND  A TRANSACTION FEE PURSUANT TO PARAGRAPH (B) OF THIS SUBDIVI-
 SION, AND A DELIVERY FEE COLLECTED PURSUANT TO  PARAGRAPH  (A)  OF  THIS
 SUBDIVISION, SHALL BE UNLAWFUL; AND
   (D)  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 COMPLIANCE WITH THE PROVISIONS OF THIS SECTION.
   3. 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 CONTINUANCE OF SUCH VIOLATION; AND
 IF  IT SHALL APPEAR TO THE SATISFACTION OF 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
 S. 565                              3
 
 AND MAKE A DETERMINATION OF THE RELEVANT FACTS AND TO ISSUE SUBPOENAS IN
 ACCORDANCE WITH THE CIVIL PRACTICE LAW AND RULES.
   4.    THIS  SECTION SHALL NOT ANNUL, ALTER, IMPAIR OR AFFECT THE LAWS,
 ORDINANCES, REGULATIONS OR RULES OF LOCAL GOVERNMENTS THAT HAVE  ADOPTED
 OR AMENDED LOCAL LAWS, ORDINANCES, REGULATIONS OR RULES NOT INCONSISTENT
 WITH THIS SECTION, INCLUDING WITHOUT LIMITATION CITIES WITH A POPULATION
 OF  ONE  MILLION OR MORE, WHILE SUCH LOCAL LAWS, ORDINANCES, REGULATIONS
 OR RULES REMAIN IN EFFECT.
   § 2. This act shall take effect immediately.