REPRESENTATIVES Core, Barrett

To amend sections 4707.05, 4707.07, 4707.072, 4707.09,

1

and 4707.19, to enact new section 4707.11 and

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sections 4707.25, 4707.26, 4707.261, 4707.262,

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4707.27, 4707.28, 4707.29, 4707.30, and 4707.31,

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and to repeal section 4707.11 of the Revised Code

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and to amend Section 17 of Am. Sub. H.B. 94 of the

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124th General Assembly as amended by Am. Sub. H.B.

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3 of the 124th General Assembly to create the

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Auction Recovery Fund, to establish criteria and

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procedures for using it to reimburse persons who

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have sustained losses involving an auctioneer who

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violated the Auctioneers Law, to delay the

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effective date of specified provisions until July

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1, 2003, and to make an appropriation.

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BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 4707.05, 4707.07, 4707.072, 4707.09,	15
and 4707.19 be amended and new section 4707.11 and sections	16
4707.25, 4707.26, 4707.261, 4707.262, 4707.27, 4707.28, 4707.29,	17
4707.30, and 4707.31 of the Revised Code be enacted to read as	18
follows:	19

Sec. 4707.05. AllExcept as otherwise provided in section	20
4707.25 of the Revised Code, all fees and charges collected by the	21
department of agriculture pursuant to this chapter shall be paid	22
into the state treasury to the credit of the auctioneers fund,	23
which is hereby created. All expenses incurred by the department	24
in administering this chapter shall be paid out of the fund. The	25
total expenses incurred by the department in the administration of	26
this chapter shall not exceed the total fees, charges, fines, and	27
penalties imposed under sections 4707.08, 4707.10, and 4707.99 of	28
the Revised Code and paid to the treasurer of state. The	29
department may conduct education programs for the enlightenment	30
and benefit of all auctioneers who have paid fees pursuant to	31
sections 4707.08 and 4707.10 of the Revised Code.	32

Out of the moneys credited pursuant to this section, the fund	33
shall be assessed a proportionate share of the administrative	34
costs of the department in accordance with procedures prescribed	35
by the director of agriculture and approved by the director of	36
budget and management. The assessment shall be paid from the	37
auctioneers fund to the division of administration fund.	38

At the end of each fiscal year, if the balance of the fund is	39
greater than three hundred thousand dollars, the director of	40
agriculture shall request the director of budget and management	41
to, and the director of budget and management shall, transfer	42
twenty-five per cent of the balance to the auction recovery fund	43
created in section 4707.25 of the Revised Code.	44

Sec. 4707.07.  (A) The department of agriculture may grant	45
auctioneers' licenses to those persons deemed qualified by the	46
department. Each person who applies for an auctioneer's license	47
shall furnish to the department, on forms provided by the	48
department, satisfactory proof that the applicant:	49

(1) Has a good reputation;

50

(2) Is of trustworthy character;

51

(3) Has attained the age of at least eighteen years;

52

(4) Has done one of the following:

53

(a) Met the apprenticeship requirements set forth in section	54
4707.09 of the Revised Code;	55

(b) Met the requirements of section 4707.12 of the Revised	56
Code.	57

(5) Has a general knowledge of the following:

58

(a) The requirements of the Revised Code relative to	59
auctioneers;	60

(b) The auction profession;

61

(c) The principles involved in conducting an auction.

62

(6) Has satisfied the financial responsibility requirements	63
established under section 4707.11 of the Revised Code if	64
applicable.	65

(B) Auctioneers who served apprenticeships and who hold	66
licenses issued before May 1, 1991, and who seek renewal of their	67
licenses, are not subject to the additional apprenticeship	68
requirements imposed by section 4707.08 of the Revised Code.	69

(C) The department may issue an auctioneer's license to a	70
partnership, association, or corporation if all the partners,	71
members, or officers thereof who are authorized to perform the	72
functions of an auctioneer as agents of the applicant are	73
themselves licensed as auctioneers under this chapter.	74

An application for an auctioneer's license filed by a	75
partnership or association shall contain a listing of the names of	76
all of the licensed partners, members, or other persons who are	77
authorized to perform the functions of an auctioneer as agents of	78
the applicant. An application filed by a corporation shall	79
contain the names of its president and of each of its licensed	80
officers and any other person who is authorized to perform the	81
functions of an auctioneer as an agent of the applicant.	82

(D) A licensee may do business under more than one	83
registered name if the names have been approved by the department.	84
The department may reject the application of any person seeking	85
licensure under this chapter if the name or names to be used by	86
the applicant are likely to mislead the public, or if the name or	87
names do not distinguish the applicant from the name or names of	88
any existing person licensed under this chapter. If an applicant	89
applies to the department to do business under more than two	90
names, the department may charge a fee of ten dollars for the	91
third name and each additional name.	92

Sec. 4707.072.  The department of agriculture may grant	93
one-auction licenses to any nonresident person deemed qualified by	94
the department. Any person who applies for a one-auction license	95
shall attest, on forms provided by the department, and furnish to	96
the department, satisfactory proof that the license applicant or	97
any auctioneer affiliated with the applicant meets the following	98
requirements:	99

(A) Has a good reputation;

100

(B) Is of trustworthy character;

101

(C) Has attained the age of at least eighteen years;

102

(D) Has a general knowledge of the requirements of the	103
Revised Code relative to auctioneers, the auction profession, and	104
the principles involved in conducting an auction;	105

(E) Has two years of professional auctioneering experience	106
immediately preceding the date of application and the experience	107
includes the personal conduct by the applicant of at least twelve	108
auction sales in any state, or has met the requirements of section	109
4707.12 of the Revised Code;	110

(F) Has paid a fee of one hundred dollars, which shall be	111
credited to the auctioneers fund;	112

(G) Has provided proof of the bondfinancial responsibility	113
as required under section 4707.11 of the Revised Code.	114

Sec. 4707.09.  The department of agriculture may grant	115
apprentice auctioneers' licenses to those persons deemed qualified	116
by the department. Every applicant for an apprentice auctioneer's	117
license mustshall pass an examination relating to the skills,	118
knowledge, and statutes and regulationsrules governing	119
auctioneers. Every applicant for an apprentice auctioneer's	120
license shall furnish to the department, on forms provided by the	121
department, satisfactory proof that the applicant:	122

(A) Has a good reputation;

123

(B) Is of trustworthy character;

124

(C) Has attained the age of at least eighteen years;

125

(D) Has obtained a written promise of a licensed auctioneer	126
to sponsor the applicant during the applicant's apprenticeship;	127

(E) Has satisfied the financial responsibility requirements	128
established under section 4707.11 of the Revised Code if	129
applicable.	130

Before an apprentice may take the auctioneer's license	131
examination, the apprentice shall serve an apprenticeship of at	132
least twelve months, successfully complete a course of study in	133
auctioneering at an institution that is approved every three years	134
by the state auctioneers commission, and conduct, as a bid caller,	135
at least twelve auction sales under the direct supervision of the	136
sponsoring licensed auctioneer, which sales shall be certified by	137
the licensed auctioneer on the apprentice's application for an	138
auctioneer's license.	139

If an auctioneer intends to terminate sponsorship of an	140
apprentice auctioneer, the sponsoring auctioneer shall notify the	141
apprentice auctioneer of the sponsoring auctioneer's intention by	142
certified mail, return receipt requested, at least ten days prior	143
to the effective date of termination and, at the same time, shall	144
deliver or mail by certified mail to the department of	145
agriculture a copy of the termination notice and the license of	146
the apprentice auctioneer. No apprentice auctioneer shall perform	147
any acts under authority of the apprentice's license after the	148
effective date of the termination until the apprentice receives a	149
new license bearing the name and address of the apprentice's new	150
sponsor. No more than one license shall be issued to any	151
apprentice auctioneer for the same period of time.	152

No licensed auctioneer shall have under the licensed	153
auctioneer's sponsorship more than two apprentice auctioneers at	154
one time.	155

An apprentice auctioneer may terminate the apprentice's	156
sponsorship with an auctioneer by notifying the auctioneer of the	157
apprentice's intention by certified mail, return receipt	158
requested, at least ten days prior to the effective date of	159
termination. At the same time, the apprentice shall deliver or	160
mail by certified mail to the department of agriculture a copy of	161
the termination notice. Upon receiving the termination notice,	162
the sponsoring auctioneer shall promptly deliver or mail by	163
certified mail to the department the license of the apprentice	164
auctioneer.	165

The termination of a sponsorship, regardless of who initiates	166
the termination, shall not be cause for an apprentice auctioneer	167
to lose credit for any certified sales the apprentice conducted	168
or apprenticeship time the apprentice served under the direct	169
supervision of the former sponsor.	170

Sec. 4707.11. (A) Except as provided in division (B) of this	171
section, each application for a license issued under this chapter	172
shall be accompanied by proof of financial responsibility in the	173
form of either an irrevocable letter of credit or a cash bond or a	174
surety bond in the amount of twenty-five thousand dollars. If the	175
applicant gives a surety bond, the bond shall be executed by a	176
surety company authorized to do business in this state.	177

A bond shall be made to the department of agriculture and	178
shall be conditioned that the applicant shall comply with this	179
chapter and rules adopted under it, including refraining from	180
conduct described in section 4707.15 of the Revised Code. All	181
bonds shall be on a form approved by the director of agriculture.	182

A licensee shall maintain proof of financial responsibility	183
for three years following the date of initial licensure. After	184
the three-year period, a licensee who has not engaged in conduct	185
described in section 4707.15 of the Revised Code and has not	186
otherwise violated this chapter or rules adopted under it during	187
that period shall no longer be required to maintain proof of	188
financial responsibility except as otherwise provided in this	189
section.	190

A licensee whose license expires without being renewed under	191
section 4707.10 of the Revised Code or is suspended under section	192
4707.30 of the Revised Code shall give proof of financial	193
responsibility in accordance with this section in order to obtain	194
reinstatement or reactivation of the license.	195

(B) Division (A) of this section does not apply to either of	196
the following:	197

(1) A licensee whose license was issued prior to July 1,	198
2003, provided that the license continues to be renewed under	199
section 4707.10 of the Revised Code and is not suspended under	200
section 4707.15 or 4707.30 of the Revised Code;	201

(2) An apprentice auctioneer licensee whose license was	202
issued under section 4707.09 of the Revised Code prior to July 1,	203
2003, and who applies for an auctioneer's license under section	204
4707.07 of the Revised Code on or after July 1, 2003, provided	205
that the apprentice auctioneer's license is not suspended under	206
section 4707.15 or 4707.30 of the Revised Code, and, if necessary,	207
continues to be renewed under section 4707.10 of the Revised Code,	208
prior to the issuance of the auctioneer's license to the	209
applicant.	210

Sec. 4707.19.  The departmentdirector of agriculture may	211
makeadopt reasonable rules necessary for the implementation of	212
the provisions of this chapter pursuant toin accordance with	213
Chapter 119. of the Revised Code. In addition, the director shall	214
adopt rules in accordance with Chapter 119. of the Revised Code	215
that establish the portion of license fees collected under this	216
chapter that are to be deposited into the auction recovery fund	217
under section 4707.25 of the Revised Code. The department of	218
agriculture may hear testimony in matters relating to the duties	219
imposed on it, and any person authorized by the director of	220
agriculture may administer oaths. The department may require	221
other proof of the honesty, truthfulness, and good reputation of	222
any person named in the application for an auctioneer's,	223
apprentice auctioneer's, or special auctioneer's license before	224
admitting the applicant to an examination or issuing a license.	225

Sec. 4707.25. (A) The auction recovery fund is hereby	226
created in the state treasury. The fund shall be administered by	227
the director of agriculture. The treasurer of state shall credit	228
all of the following to the fund: any moneys transferred to it	229
from the auctioneers fund created under section 4707.05 of the	230
Revised Code; except as otherwise provided in this section, a	231
portion, in an amount specified in rules adopted under section	232
4707.19 of the Revised Code, of license fees collected under this	233
chapter; any assessments levied under this section; repayments	234
made to the auction recovery fund under section 4707.30 of the	235
Revised Code by persons licensed under this chapter; and interest	236
earned on the assets of the fund.	237

Moneys credited to the fund shall be used to make payments to	238
persons in accordance with sections 4707.26 and 4707.31 of the	239
Revised Code and to persons who obtain a final judgment in	240
accordance with section 4707.261 and sections 4707.27 to 4707.30	241
of the Revised Code in a court of competent jurisdiction against a	242
person licensed under this chapter on the grounds of conduct by	243
the licensee that is described in section 4707.15 of the Revised	244
Code or that otherwise violates this chapter or rules adopted	245
under it and that is associated with an act or transaction that	246
only a licensee lawfully may perform. In the case of a final	247
judgment, the amount of the payments shall be limited to any	248
portion of the final judgment that remains unpaid. In all cases,	249
the amount of the payments is subject to the dollar limitations	250
established in section 4707.29 of the Revised Code.	251

(B) The director shall ascertain the balance of the fund on	252
the first day of July each year. If the balance of the fund is	253
greater than two million dollars, the director may utilize, during	254
the fiscal year beginning on that first day of July, the portion	255
of the fund that is greater than two million dollars to sponsor	256
educational programs or to underwrite research that is beneficial	257
to persons licensed under this chapter and to the public. If the	258
balance of the fund is at least four million dollars, the portion	259
of license fees collected under this chapter that otherwise would	260
be credited to the fund under this section shall be credited to	261
the auctioneers fund during the fiscal year beginning on that	262
first day of July.	263

If the balance of the fund is less than four hundred thousand	264
dollars, the director shall levy an assessment against each person	265
who holds a valid license issued under this chapter. The amount	266
of the assessment shall be determined by subtracting the balance	267
of the fund from five hundred thousand dollars and dividing the	268
resulting total by the number of persons recorded under section	269
4707.06 of the Revised Code as holding a valid license issued	270
under this chapter. All assessments that are collected shall be	271
credited to the fund.	272

(C) The director shall collect from the fund a service fee	273
in an amount equal to the interest rate specified in division (A)	274
of section 1343.03 of the Revised Code multiplied by the annual	275
interest earned on the assets of the fund to defray the expenses	276
incurred by the department of agriculture in the administration of	277
the fund.	278

Sec. 4707.26. (A)(1) A person who asserts that they have	279
been aggrieved by the actions of a person licensed under this	280
chapter that resulted in actual and direct losses to the aggrieved	281
person may initiate a claim against the auction recovery fund	282
either under this section or section 4707.261 of the Revised Code.	283
If an aggrieved person who wishes to seek recovery from the	284
auction recovery fund has obtained a final judgment in a court of	285
competent jurisdiction against the licensee, the aggrieved person	286
shall initiate the claim in accordance with section 4707.261 of	287
the Revised Code. If an aggrieved person who wishes to seek	288
recovery from the auction recovery fund has not obtained a final	289
judgment in a court of competent jurisdiction against the	290
licensee, the aggrieved person shall initiate the claim in	291
accordance with this section.	292

(2) An aggrieved person may initiate a claim against the	293
auction recovery fund under this section if both of the following	294
apply:	295

(a) The loss was associated with an act or transaction that	296
only a person licensed under this chapter lawfully may perform.	297

(b) The licensee's actions are described in section 4707.15	298
of the Revised Code or otherwise violate this chapter or rules	299
adopted under it.	300

To initiate a claim against the fund, an aggrieved person	301
shall file a verified complaint with the department of agriculture	302
in accordance with section 4707.16 of the Revised Code. The	303
verified complaint shall include an application to the department	304
that requests recovery of the applicant's actual and direct losses	305
and that is made on forms that the department provides. The	306
application for recovery shall specify the nature of the act or	307
transaction on which the applicant's claim is based, the actual	308
and direct losses sustained by the applicant, and any activities	309
that the applicant has pursued as a remedy for the losses.	310

(B) Upon receipt of a verified compliant and application,	311
the department shall conduct an investigation in accordance with	312
section 4707.16 of the Revised Code. After the investigation, if	313
the department determines that the licensee has engaged in conduct	314
described in section 4707.15 of the Revised Code or otherwise has	315
violated this chapter or rules adopted under it, the department	316
shall propose to take action to suspend or revoke the licensee's	317
license under section 4707.15 of the Revised Code or to initiate a	318
criminal action against the licensee under section 4707.99 of the	319
Revised Code, or both. The department shall issue a letter to the	320
applicant indicating the department's proposed action and the date	321
of any hearing that the department has scheduled regarding the	322
matter.	323

(C) Upon exhaustion of administrative remedies or	324
criminal proceedings that results in a finding that the licensee	325
has engaged in conduct described in section 4707.15 of the Revised	326
Code or otherwise has violated this chapter or rules adopted under	327
it, the department shall issue a notice in accordance with Chapter	328
119. of the Revised Code via certified mail to the applicant	329
indicating that the applicant may request a hearing for relief	330
from the auction recovery fund. An applicant who seeks recovery	331
from the fund of any actual and direct losses suffered as a result	332
of a licensee's conduct shall submit, not later than thirty days	333
following receipt of the notice, a request for a hearing to the	334
department.	335

Upon the timely receipt of a request for a hearing, the	336
department shall provide the applicant with the opportunity to	337
appear at an adjudication hearing to offer proof and evidence of	338
the actual and direct losses. Whenever possible, the department	339
shall require all applicants whose claims to the fund arose from	340
an underlying transaction involving the same licensee to be joined	341
in one adjudication under this section so that the rights of all	342
applicants may be equitably adjudicated and settled. On behalf of	343
the fund, the department may defend claims against the fund and	344
shall have recourse to all appropriate means of defense and	345
review, including examination of witnesses, and verification of	346
actual losses.	347

(D) Upon the conclusion of the adjudication hearing, the	348
hearing officer shall issue a report and recommendation in favor	349
of making payment to an applicant from the fund if, during the	350
course of the adjudication hearing, all of the following have been	351
shown:	352

(1) The licensee has engaged in conduct described in section	353
4707.15 of the Revised Code or otherwise has violated this chapter	354
or rules adopted under it.	355

(2) The licensee's conduct or violation is associated with	356
an act that only a person licensed under this chapter lawfully may	357
perform and the act resulted in direct and actual losses to the	358
applicant.	359

(3) The applicant filed a verified complaint and application	360
with the department as required by this section.	361

(4) The applicant is not the spouse of the licensee nor the	362
personal representative of the licensee's spouse.	363

(5) If the licensee either provided an irrevocable letter	364
of credit or gave bond in accordance with section 4707.11 of the	365
Revised Code, the applicant first sought recovery under the	366
irrevocable letter of credit or bond before applying for payment	367
from the fund.	368

The amount of any payment from the fund to the applicant	369
shall consist of an amount that is equal to the portion of the	370
actual and direct losses incurred by the applicant that remain	371
unpaid. The amount of the payment is subject to the dollar	372
limitation established in section 4707.29 of the Revised Code.	373

If the hearing officer determines that not all of the items	374
described in divisions (D)(1) to (5) of this section have been	375
shown during the course of the adjudication hearing, the hearing	376
officer shall issue a report and recommendation against making	377
payment from the fund to the applicant.	378

(E) Pursuant to section 119.09 of the Revised Code, a	379
hearing officer or the hearing officer's representative shall	380
forward by certified mail a copy of the hearing officer's written	381
report and recommendation to the applicant or the applicant's	382
attorney or other representative not later than five days after	383
the date on which the report and recommendation are filed.	384

Not later than ten days after receiving such a copy, the	385
applicant may file with the department written objections to the	386
report and recommendation. The department may grant extensions of	387
time to the applicant within which to file objections.	388

The objections shall be considered by the department	389
before it approves, modifies, or disapproves the recommendation.	390
The department may order additional testimony to be taken or	391
permit the introduction of further documentary evidence.	392

The recommendation of the hearing officer may be approved,	393
modified, or disapproved by order of the director of agriculture.	394
The order shall not be issued until more than ten days have	395
elapsed following the applicant's receipt of the report and	396
recommendation as provided by this section. The director's	397
approval, modification, or disapproval of the hearing officer's	398
recommendation shall have the same effect as if the hearing had	399
been conducted by the director.	400

No recommendation shall be final until approved, modified,	401
or disapproved by the director as indicated by the order entered	402
on the record of proceedings of the department. If the director	403
modifies or disapproves the recommendations of the hearing	404
officer, the director shall include in the record of the	405
proceedings the reasons for the modification or disapproval.	406

After an order is entered on its journal, the department	407
shall make payment, if applicable, to the applicant from the	408
auction recovery fund in accordance with the order and shall	409
provide to the applicant by certified mail, return receipt	410
requested, a copy of the order and a statement of the time and	411
method by which an appeal may be perfected. In addition, the	412
department shall mail a copy of the order to the attorney or other	413
representative of the applicant.	414

(F) An order of the director issued under this section	415
constitutes a final determination of the director for purposes of	416
appeal. An applicant who is denied compensation from the auction	417
recovery fund or who receives an award less than the award	418
requested may appeal the order of the director. Notices of appeal	419
shall be filed in the manner provided in section 119.12 of the	420
Revised Code.	421

Sec. 4707.261.  A person who obtains a final judgment in a	422
court of competent jurisdiction against a person licensed under	423
this chapter, on the grounds of conduct by the licensee that is	424
described in section 4707.15 of the Revised Code or that otherwise	425
violates this chapter or rules adopted under it and that is	426
associated with an act or transaction that only a licensee	427
lawfully may perform, may file a verified application in a court	428
of common pleas for an order directing payment from the auction	429
recovery fund. The application shall be accompanied by the	430
judgment entry and may seek payment in an amount that is equal to	431
the portion of the judgment that remains unpaid.	432

The application shall specify the nature of the act or	433
transaction on which the underlying judgment was based, the	434
activities of the applicant in pursuit of remedies available under	435
the law for the collection of judgments, and the actual and direct	436
losses sustained by the applicant. The applicant shall attach to	437
the application a copy of each pleading and order in the	438
underlying court action. In addition, the application shall	439
include proof of the applicant's actual and direct loss.	440

Whenever possible, the court shall require all applicants and	441
prospective applicants whose claims to the fund arose from an	442
underlying judgment against the same licensee to be joined in one	443
action under this section so that the rights of all applicants may	444
be equitably adjudicated and settled.	445

Sec. 4707.262. A person who has sustained actual and direct	446
losses in the course of a real estate auction transaction and who	447
believes that they may qualify to seek recovery for the losses	448
from the real estate recovery fund in accordance with section	449
4735.12 of the Revised Code or from the auction recovery fund	450
shall apply to a court of competent jurisdiction for a	451
determination of the fund from which the person should seek	452
recovery if either or both of the following apply:	453

(A) The transaction involves both of the following:

454

(1) A violation of Chapter 4735. of the Revised Code;

455

(2) A violation of this chapter or rules adopted under it or	456
conduct that is described in section 4707.15 of the Revised Code.	457

(B) The person is unclear as to the fund from which	458
recovery should be sought.	459

Upon receipt of an application under this section, the court	460
shall determine whether it appears that conduct or a violation	461
described in division (A) of this section occurred and also shall	462
determine, in its discretion, the appropriate fund from which the	463
person should seek recovery and notify the person of the	464
determination.	465

In the event that the court determines the person is able to	466
recover from both the real estate recovery fund and the auction	467
recovery fund, the total aggregate amount that is paid to the	468
person from both the funds shall not exceed the actual and direct	469
losses sustained by the person. In addition, the total aggregate	470
amount that is paid to the person from both the funds shall not	471
exceed the dollar limitations established in section 4707.29 of	472
the Revised Code, and the portion of that total aggregate amount	473
that is paid from the real estate recovery fund shall not exceed	474
the dollar limitations established in division (D) of section	475
4735.12 of the Revised Code.	476

For purposes of division (B)(4)(d) of section 4735.12 of the	477
Revised Code, with respect to recovery from the real estate	478
recovery fund, a person shall not be required first to seek	479
recovery from the auction recovery fund in order to be considered	480
to have diligently pursued the person's remedies.	481

Sec. 4707.27. A person who applies to a court of common pleas	482
for an order directing payment from the auction recovery fund	483
under section 4707.261 of the Revised Code shall file notice of	484
the application with the director of agriculture. The director	485
may defend any such action on behalf of the fund and shall have	486
recourse to all appropriate means of defense and review, including	487
examination of witnesses, verification of actual and direct	488
losses, and challenges to the underlying judgment obtained from a	489
court of competent jurisdiction to determine whether the	490
underlying judgment is based on activity that only a person	491
holding a valid license issued under this chapter is authorized to	492
perform. The director may move the court of common pleas at any	493
time to dismiss the application when it appears that there are no	494
triable issues and the application is without merit, provided that	495
the director shall give written notice to the applicant not fewer	496
than ten days before the motion is made. The motion may be	497
supported by affidavit of any person having knowledge of the facts	498
and may be made on the basis that the application, including the	499
underlying judgment referred to in it, does not form the basis for	500
a meritorious recovery claim. Subject to court approval, the	501
director may compromise a claim based on the application of the	502
aggrieved party. The director shall not be bound by any prior	503
compromise or stipulation of the licensee who is the judgment	504
debtor.	505

Sec. 4707.28. (A) After receipt of an application that is	506
filed under section 4707.261 of the Revised Code and that	507
satisfies the requirements established under that section, a court	508
of common pleas shall issue an order directing the director of	509
agriculture to make payment from the auction recovery fund to an	510
applicant who satisfies the criteria established under this	511
section. The payment shall consist of an amount that is equal to	512
the portion of the final judgment that was obtained by the	513
applicant against a person licensed under this chapter and that	514
remains unpaid. The amount of the payment is subject to the	515
dollar limitations established in section 4707.29 of the Revised	516
Code.	517

The court shall issue an order directing payment to the	518
applicant from the fund when the applicant has shown all of the	519
following:	520

(1) The applicant has obtained a judgment in a court of	521
competent jurisdiction against a person licensed under this	522
chapter on the grounds of conduct that is described in section	523
4707.15 of the Revised Code or that otherwise violates this	524
chapter or rules adopted under it and that is associated with an	525
act or transaction that only a licensee lawfully may perform.	526

(2) All appeals from the judgment have been exhausted, and	527
the applicant has filed notice with the director in accordance	528
with section 4707.27 of the Revised Code and has otherwise	529
complied with that section.	530

(3) The applicant is not either the spouse of the licensee	531
who is the judgment debtor or the personal representative of the	532
spouse.	533

(4) The applicant has diligently pursued the applicant's	534
remedies against all judgment debtors and all other persons who	535
are liable to the applicant in the underlying auction transaction	536
for which the applicant seeks recovery from the fund.	537

(5) The applicant filed the application not later than six	538
months following the termination of all proceedings, including	539
appeals, in connection with the judgment.	540

(6) If the judgment debtor either provided an irrevocable	541
letter of credit or gave bond in accordance with section 4707.11	542
of the Revised Code, the applicant first sought recovery under the	543
irrevocable letter of credit or the bond before applying for	544
payment from the fund.	545

(B) All of the following are prohibited from receiving	546
payment under section 4707.26 or 4707.261 of the Revised Code from	547
the auction recovery fund:	548

(1) A bonding company that was not a party in the underlying	549
auction transaction;	550

(2) A person holding a valid license issued under either	551
this chapter or Chapter 4735. of the Revised Code;	552

(3) A person who, under division (B)(5) of section 4735.12	553
of the Revised Code, would be ineligible to receive payment from	554
the real estate recovery fund;	555

(4) A person who obtained a final judgment that arose from	556
an act or transaction that only a licensed real estate broker or	557
real estate salesperson is authorized to perform under Chapter	558
4735. of the Revised Code and that did not involve a violation of	559
this chapter or rules adopted under it.	560

(C) Punitive damages, attorney's fees, court costs, and	561
interest on a judgment are not recoverable from the auction	562
recovery fund.	563

Sec. 4707.29. The liability of the auction recovery fund	564
shall not exceed fifty thousand dollars for losses involving	565
violations committed by any one licensee, except that with respect	566
to any one licensee who provides either an irrevocable letter of	567
credit or a bond in order to maintain proof of financial	568
responsibility under section 4707.11 of the Revised Code, the	569
liability of the fund shall not exceed twenty-five thousand	570
dollars for losses involving violations committed by the licensee.	571
If a licensee's license is reactivated as provided in section	572
4707.30 of the Revised Code, the liability of the fund for the	573
licensee shall again be fifty thousand dollars, or twenty-five	574
thousand dollars if applicable, but only for transactions that	575
occur subsequent to the time of reactivation.	576

If fifty thousand dollars, or twenty-five thousand dollars if	577
applicable, are insufficient to pay the valid claims of all	578
persons who have applied for payment from the fund with respect to	579
losses involving violations committed by the same licensee, the	580
money shall be distributed among the persons in the ratio that	581
their respective claims bear to the aggregate of valid claims or	582
in another manner that the court or, if all the claims involve	583
applications filed under section 4707.26 or 4707.31 of the Revised	584
Code, the director of agriculture determines to be equitable.	585
Distribution of the money shall be among the persons entitled to	586
share in it without regard to the order of priority in which their	587
respective claims may have been decided or their applications for	588
payment from the fund may have been filed.	589

Sec. 4707.30. (A) As used in this section:

590

(1) "Aggrieved party" means a person who has sustained	591
actual and direct losses in an auction transaction involving a	592
person licensed under this chapter due to conduct by the licensee	593
that is described in section 4707.15 of the Revised Code or that	594
otherwise violates this chapter or rules adopted under it and that	595
is associated with an act or transaction that only a licensee	596
lawfully may perform.	597

(2) "Offending licensee" means a person licensed under this	598
chapter who fits either of the following descriptions:	599

(a) Against whom an aggrieved party has obtained a final	600
judgment in a court of competent jurisdiction and whose failure to	601
pay all or a portion of the judgment results in a payment to the	602
aggrieved party from the auction recovery fund;	603

(b) Whose conduct has resulted in a payment from the auction	604
recovery fund to an aggrieved party under section 4707.26 or	605
4707.31 of the Revised Code.	606

(B) If the director of agriculture makes a payment from the	607
auction recovery fund to an aggrieved party and the license of the	608
offending licensee has not been suspended or revoked under section	609
4707.15 of the Revised Code, the license automatically is	610
suspended on the date on which the payment is made. The director	611
shall provide the offending licensee an opportunity for an	612
administrative hearing on the suspension in accordance with	613
Chapter 119. of the Revised Code. The director shall not	614
reactivate the suspended license until the offending licensee has	615
repaid in full, plus interest per annum at the rate specified in	616
division (A) of section 1343.01 of the Revised Code, the amount	617
paid from the fund to the aggrieved party. A discharge in	618
bankruptcy does not relieve an offending licensee from the	619
suspension provisions and requirements for reactivation of a	620
license that are established in this section.	621

When the director has paid from the fund any sum to an	622
aggrieved party, the director shall be subrogated to all of the	623
rights of the aggrieved party to the extent of the amount of the	624
payment that the aggrieved party received from the fund. If the	625
aggrieved party obtained a final judgment against the offending	626
licensee in a court of competent jurisdiction, the aggrieved party	627
shall assign all of the aggrieved party's right, title, and	628
interest in the judgment to the director to the extent of the	629
amount of the payment that the aggrieved party received from the	630
fund. The director shall deposit into the fund any amount and	631
interest recovered by the director from the offending licensee.	632

With respect to the amount of a payment that the director has	633
paid to an aggrieved party from the fund and has not recovered,	634
the director shall have a priority lien in front of all other	635
interested creditors against the assets of an offending licensee	636
who files bankruptcy. The lien shall be deemed to have taken	637
effect on the date that the offending licensee entered into a	638
contract in accordance with section 4707.20 of the Revised Code	639
with respect to the auction transaction out of which the payment	640
from the fund arose.	641

Disciplinary action taken under this section against an	642
offending licensee and the recovery of moneys from an offending	643
licensee for deposit into the fund shall not excuse the offending	644
licensee from any other disciplinary action to which the offending	645
licensee may be subject under this chapter or any other provision	646
of the Revised Code or rules adopted under it.	647

Sec. 4707.31. Notwithstanding any other provision of this	648
chapter to the contrary, the director of agriculture may, within	649
the director's discretion, make a payment out of the auction	650
recovery fund to a person without first requiring the person to	651
obtain a prior order issued by the director or by a court of	652
competent jurisdiction if all of the following apply:	653

(A) The person claims to have sustained total actual and	654
direct losses in the amount of one thousand dollars or less.	655

(B) The losses are associated with an act or transaction	656
that only a person licensed under this chapter lawfully may	657
perform.	658

(C) The licensee allegedly has engaged in actions that are	659
described in section 4707.15 of the Revised Code or that otherwise	660
violate this chapter or rules adopted under it.	661

(D) The amount of the alleged loss is readily ascertainable	662
rather than speculative in nature.	663

(E) The claimant filed a properly notarized complaint with	664
supporting documentation to the department not later than one year	665
following the date of the alleged wrongful actions of the	666
licensee.	667

(F) The department, within its discretion, determines that,	668
based upon the evidence presented, justice would be better served	669
by allowing compensation to be paid without first requiring the	670
aggrieved party to obtain a judgment from a court of competent	671
jurisdiction or an order of the department.	672

Section 2. That existing sections 4707.05, 4707.07, 4707.072,	673
4707.09, and 4707.19 of the Revised Code are hereby repealed.	674

Section 3. That section 4707.11 of the Revised Code is hereby	675
repealed, effective July 1, 2003.	676

Section 4. Sections 4707.07, 4707.072, 4707.09, 4707.11,	677
4707.26, 4707.261, 4707.262, 4707.27, 4707.28, 4707.29, 4707.30,	678
and 4707.31 of the Revised Code, as amended or enacted by this	679
act, shall take effect on July 1, 2003.	680

Section 5. That Section 17 of Am. Sub. H.B. 94 of the 124th	681
General Assembly, as amended by Am. Sub. H.B. 3 of the 124th	682
General Assembly, be amended to read as follows:	683

"       Sec. 17.  AGR DEPARTMENT OF AGRICULTURE

684

General Revenue Fund

685

Federal Special Revenue Fund Group

707

State Special Revenue Fund Group

715

ANIMAL DISEASE CONTROL

742

The funds in appropriation item 700-401, Animal Disease	743
Control, may be used for the detection, prevention, and emergency	744
management of, and the education of the public regarding, Foot and	745
Mouth disease, Mad Cow disease, and West Nile virus.	746

REIMBURSEMENT TO THE GENERAL REVENUE FUND

747

(A) On or before June 30, 2003, the Director of	748
Budget and Management shall determine the following:	749

(1) The total amount disbursed from the foregoing	750
appropriation item, 700-409, Farmland Preservation, in the	751
2002-2003 biennium; and	752

(2) The amount of interest earnings that have been	753
credited to the Clean Ohio Conservation Fund (Fund 056) that are	754
in excess of what is needed for other purposes.	755

(B) If the Director determines under division (A)(2) of	756
this section that there are excess interest earnings, the Director	757
shall, on or before June 30, 2003, transfer them in an amount not	758
to exceed $60,000 less than the amount of disbursements determined	759
under division (A)(1) of this section from the Clean Ohio	760
Conservation Fund to the General Revenue Fund.	761

THE AUCTION FUND

762

On October 1, 2001, the Auction Education Fund (Fund 4D2) and	763
the Auction Licensing Fund (Fund 5B8) shall be transferred from	764
the Department of Commerce to the Department of Agriculture. At	765
the request of the Director of Commerce, the Director of Budget	766
and Management may cancel encumbrances in these funds from the	767
Department of Commerce's appropriation item 800-605, Auctioneer	768
Education, and appropriation item 800-628, Auctioneers, and	769
reestablish such encumbrances or parts of encumbrances in fiscal	770
year 2002 for the same purpose and to the same vendor in the	771
Department of Agriculture's appropriation item 700-609, Auction	772
Education, and appropriation item 700-628, Auctioneers. The	773
Director of Budget and Management shall reduce the appropriation	774
balances in fiscal year 2001 by the amount of the encumbrances	775
canceled in the funds. As determined by the Director of Budget	776
and Management, the appropriation authority necessary to	777
reestablish such encumbrances or parts of encumbrances in fiscal	778
year 2002 for the Department of Agriculture is hereby	779
appropriated.	780

THE DAIRY INDUSTRY FUND

781

On July 1, 2001, or as soon thereafter as possible, the	782
Director of Budget and Management shall transfer the cash balance	783
in the License Fees (Fund 4V0) to the Dairy Inspection Fund (Fund	784
4R2). The director shall cancel any existing encumbrances against	785
appropriation item 700-602, License Fees (Fund 4V0), and	786
reestablish them against appropriation item 700-637, Dairy	787
Inspection (Fund 4R2). The amounts of the reestablished	788
encumbrances are appropriated."	789

Section 6. That existing Section 17 of Am. Sub. H.B. 94 of	790
the 124th General Assembly, as amended by Am. Sub. H.B. 3 of the	791
124th General Assembly, is hereby repealed.	792

Section 7. As soon as possible prior to June 30, 2003, the	793
Director of Budget and Management shall make a one-time cash	794
transfer of $500,000 from Fund 5B8, Auctioneers, to Fund 5U1,	795
Auction Recovery Fund. The Auction Recovery Fund is to be	796
administered by the Department of Agriculture under sections	797
4707.25 to 4707.30 of the Revised Code as enacted by this act.	798

Section 8. Sections 5 to 8 of this act are not subject to the	799
referendum. Therefore, under the Ohio Constitution, Article II,	800
Section 1d and section 1.471 of the Revised Code, Sections 5 to 8	801
of this act go into immediate effect when this act becomes law.	802