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H. B. No. 48 As Introduced
As Introduced
127th General Assembly | Regular Session | 2007-2008 |
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Cosponsors: Representatives Fessler, Seitz, McGregor, J., Setzer, Brown, Collier, Wagner, Wagoner, Combs, Aslanides
A BILL
To amend sections 4707.02, 4707.20, 4707.21, and 4707.26 of the Revised Code to exempt certain tax exempt organizations and schools that sell at auction items donated to them from license and contract requirements for such an auction, to require those organizations and schools to maintain records of the auction for two years, and to preclude claims against the Auction Recovery Fund for any loss associated with those types of auctions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 4707.02, 4707.20, 4707.21, and 4707.26 of the Revised Code be amended to read as follows:
Sec. 4707.02. No person shall act as an auction firm, auctioneer,
apprentice auctioneer, or special auctioneer within this state
without a license issued by the department of
agriculture. No
auction shall be conducted in this state except
by an auctioneer
licensed by the department. The department shall not issue or renew a license if the
applicant or licensee has been convicted of a felony or crime
involving fraud or theft in this or another state at any time during the
ten years immediately preceding application or renewal. This section does not apply to any of the following: (A) Sales at auction that either are required by law to be at
auction,
other than sales pursuant to a judicial order or decree, or that are conducted by or under the direction of a public authority; (B) The owner of any real or personal property desiring to
sell the property at auction, provided that the property was not
acquired for the purpose of resale; (C) An auction mediation company;
(D) An auction that is conducted in a course of study for auctioneers that is approved by the state auctioneers commission created under section 4707.03 of the Revised Code for purposes of student training and is supervised by a licensed auctioneer;
(E)(1) An auction that is sponsored by a nonprofit or charitable organization that is registered in this state under Chapter 1702. or Chapter 1716. of the Revised Code, respectively, if the auction only involves the property of the members of the organization and the auction is part of a fair that is organized by an agricultural society under Chapter 1711. of the Revised Code or by the Ohio expositions commission under Chapter 991. of the Revised Code at which an auctioneer who is licensed under this chapter physically conducts the auction;
(2) Sales at an auction sponsored by a charitable, religious, or civic organization that is tax exempt under subsection 501(c)(3) of the Internal Revenue Code, or by a public school, chartered nonpublic school, or community school, if the auction is conducted by a licensed auctioneer, no person is compensated for organizing, arranging, or conducting the auction, and all the items sold at the auction are donated.
(F) A person licensed as a livestock dealer under Chapter 943. of the Revised Code who exclusively sells livestock and uses an auctioneer who is licensed under this chapter to conduct the auction; (G) A person licensed as a motor vehicle auction owner under Chapter 4517. of the Revised Code who exclusively sells motor vehicles and who uses an auctioneer who is licensed under this chapter to conduct the auction; (H) A person who sells real or personal property by means of the internet.
Sec. 4707.20. (A) No Except when conducting an auction under division (E)(2) of section 4707.02 of the Revised Code, no person shall act as an auction firm, auctioneer, or
special auctioneer until the person has
first
entered into a written contract or agreement in duplicate with
the
owner or consignee of any property to be sold, containing the
terms and conditions upon which the licensee receives or accepts
the property for sale at auction. The contracts or agreements
shall, for a period of two years, be kept on file in the office
of
every person so licensed. No apprentice auctioneer shall be
authorized to enter into such a contract or agreement without the
written consent of the apprentice auctioneer's sponsoring
auctioneer, and all contracts or
agreements shall be made in the
name of and on behalf of the
sponsoring auctioneer. In addition, an apprentice auctioneer shall not enter into an auction contract for the sale of real property in the name of the sponsoring auctioneer regardless of whether the apprentice auctioneer is licensed as a real estate broker or salesperson.
(B) On all contracts or agreements between an auction firm, auctioneer,
or
special auctioneer and the owner or consignee, there shall
appear
a prominent statement indicating that the auction firm, auctioneer, or
special
auctioneer is licensed by the
department of
agriculture,
and either that the licensee is
bonded in favor of the state or that an aggrieved person may initiate a claim against the auction recovery fund created in section 4707.25 of the Revised Code as a result of the licensee's actions, whichever is applicable. (C) The auction firm, auctioneer, or special auctioneer who contracts
with
the owner is liable for the settlement of all money
received,
including the payment of all expenses incurred only by
the
licensee and the distribution of all funds, in connection
with an
auction. (D) For purposes of this section, a contract or agreement shall specify all of the following:
(1) The owner of the property to be sold or the owner's agent or the consignee;
(2) The date of the auction or a termination date of the contract or agreement;
(3) The location of the auction;
(4) The terms and conditions of the auction;
(5) All of the fees to be charged by the auctioneer or the auction firm, which shall include commissions, rentals, advertising, and labor;
(6) An explanation of the settlement of the auction that includes the disbursement of interest money, if applicable;
(7) A statement establishing the responsibility for bad checks, debts, and unpaid auction items;
(8) A statement indicating whether the auction is a reserve auction or an absolute auction. In addition, the statement shall include the definition of reserve auction or absolute auction from section 4707.01 of the Revised Code, as applicable.
(9) A statement of the auctioneer's or auction firm's policy regarding absentee bidding;
(10) A brief description of the real or personal property to be sold; (11) If the sale is of real or personal property at absolute auction, a statement affirming that the seller of the real or personal property has a bona fide intention to transfer ownership of the property to the highest bidder.
Sec. 4707.21. No auction firm, auctioneer, apprentice auctioneer, or
special
auctioneer
shall willfully neglect or refuse to furnish
the department of
agriculture
statistics or other
information in
the auction firm's, auctioneer's, apprentice
auctioneer's, or
special auctioneer's
possession or under
the auction firm's, auctioneer's,
apprentice auctioneer's, or
special auctioneer's
control that
the auction firm, auctioneer, apprentice
auctioneer, or special auctioneer
is
authorized to collect; nor
shall
the auction firm, auctioneer, apprentice
auctioneer, or special
auctioneer neglect or refuse, for
more than
thirty days, to answer
questions submitted on circulars; nor
shall
the auction firm, auctioneer,
apprentice auctioneer, or special
auctioneer
knowingly
answer any
such questions falsely; and nor shall
the
auction firm, auctioneer,
apprentice
auctioneer, or special auctioneer refuse to
obey
subpoenas and
give testimony. Licensees, as well as charitable, religious, or civic organizations and schools that sponsor an auction under division (E)(2) of section 4707.02 of the Revised Code, shall keep records
relative to any
auction sale for
at least two years from the its date
of auction. These
records shall
include
settlement sheets, written
contracts, and
copies of any advertising that lists
the items for
auction, as applicable.
Sec. 4707.26. (A)(1) A person who asserts that the person has
been aggrieved by the actions of a person licensed under this
chapter that resulted in actual and direct losses to the aggrieved
person may initiate a claim against the auction recovery fund
either under this section or section 4707.261 of the Revised Code.
If an aggrieved person who wishes to seek recovery from the
auction recovery fund has obtained a final judgment in a court of
competent jurisdiction against the licensee, the aggrieved person
shall initiate the claim in accordance with section 4707.261 of
the Revised Code. If an aggrieved person who wishes to seek
recovery from the auction recovery fund has not obtained a final
judgment in a court of competent jurisdiction against the
licensee, the aggrieved person shall initiate the claim in
accordance with this section. (2) An aggrieved person may initiate a claim against the
auction recovery fund under this section
if all of the following
apply: (a) The loss was associated with an act or transaction that
only a person licensed under this chapter lawfully may perform. (b) The licensee's actions are described in section 4707.15
of the Revised Code or otherwise violate this chapter or rules
adopted under it. (c) The licensee is not an auction firm.
(d) The loss was not associated with an auction conducted under division (E)(2) of section 4707.02 of the Revised Code. To initiate a claim against the fund, an aggrieved person
shall file a verified complaint with the department of agriculture
in accordance with section 4707.16 of the Revised Code. The
verified complaint shall include an application to the department
that requests recovery of the applicant's actual and direct losses
and that is made on forms that the department provides. The
application for recovery shall specify the nature of the act or
transaction on which the applicant's claim is based, the actual
and direct losses sustained by the applicant, and any activities
that the applicant has pursued as a remedy for the losses. (B) Upon receipt of a verified complaint and application,
the department shall conduct an investigation in accordance with
section 4707.16 of the Revised Code. After the investigation, if
the department determines that the licensee has engaged in conduct
described in section 4707.15 of the Revised Code or otherwise has
violated this chapter or rules adopted under it, the department
shall propose to take action to suspend or revoke the licensee's
license under section 4707.15 of the Revised Code or to initiate a
criminal action against the licensee under section 4707.99 of the
Revised Code, or both. The department shall issue a letter to the
applicant indicating the department's proposed action and the date
of any hearing that the department has scheduled regarding the
matter. (C) Upon exhaustion of administrative remedies or
criminal proceedings that results in a finding that the licensee
has engaged in conduct described in section 4707.15 of the Revised
Code or otherwise has violated this chapter or rules adopted under
it, the department shall issue a notice in accordance with Chapter
119. of the Revised Code via certified mail to the applicant
indicating that the applicant may request a hearing for relief
from the auction recovery fund. An applicant who seeks recovery
from the fund of any actual and direct losses suffered as a result
of a licensee's conduct shall submit, not later than thirty days
following receipt of the notice, a request for a hearing to the
department. Upon the timely receipt of a request for a hearing, the
department shall provide the applicant with the opportunity to
appear at an adjudication hearing to offer proof and evidence of
the actual and direct losses. Whenever possible, the department
shall require all applicants whose claims to the fund arose from
an underlying transaction involving the same licensee to be joined
in one adjudication under this section so that the rights of all
applicants may be equitably adjudicated and settled. On behalf of
the fund, the department may defend claims against the fund and
shall have recourse to all appropriate means of defense and
review, including examination of witnesses, and verification of
actual losses. (D) Upon the conclusion of the adjudication hearing, the
hearing officer shall issue a report and recommendation in favor
of making payment to an applicant from the fund if, during the
course of the adjudication hearing, all of the following have been
shown: (1) The licensee has engaged in conduct described in section
4707.15 of the Revised Code or otherwise has violated this chapter
or rules adopted under it. (2) The licensee's conduct or violation is associated with
an act that only a person licensed under this chapter lawfully may
perform and the act resulted in direct and actual losses to the
applicant. (3) The applicant filed a verified complaint and application
with the department as required by this section. (4) The applicant is not the spouse of the licensee nor or the
personal representative of the licensee's spouse. (5) If the licensee either provided an irrevocable letter
of credit or gave bond in accordance with section 4707.11 of the
Revised Code, the applicant first sought recovery under the
irrevocable letter of credit or bond before applying for payment
from the fund. The amount of any payment from the fund to the applicant
shall consist of an amount that is equal to the portion of the
actual and direct losses incurred by the applicant that remain
unpaid. The amount of the payment is subject to the dollar
limitation established in section 4707.29 of the Revised Code. If the hearing officer determines that not all of the items
described in divisions (D)(1) to (5) of this section have been
shown during the course of the adjudication hearing, the hearing
officer shall issue a report and recommendation against making
payment from the fund to the applicant. (E) Pursuant to section 119.09 of the Revised Code, a
hearing officer or the hearing officer's representative shall
forward by certified mail a copy of the hearing officer's written
report and recommendation to the applicant or the applicant's
attorney or other representative not later than five days after
the date on which the report and recommendation are filed. Not later than ten days after receiving such a copy, the
applicant may file with the department written objections to the
report and recommendation. The department may grant extensions of
time to the applicant within which to file objections. The objections shall be considered by the department
before it approves, modifies, or disapproves the recommendation.
The department may order additional testimony to be taken or
permit the introduction of further documentary evidence. The recommendation of the hearing officer may be approved,
modified, or disapproved by order of the director of agriculture.
The order shall not be issued until more than ten days have
elapsed following the applicant's receipt of the report and
recommendation as provided by this section. The director's
approval, modification, or disapproval of the hearing officer's
recommendation shall have the same effect as if the hearing had
been conducted by the director. No recommendation shall be final until approved, modified,
or disapproved by the director as indicated by the order entered
on the record of proceedings of the department. If the director
modifies or disapproves the recommendations of the hearing
officer, the director shall include in the record of the
proceedings the reasons for the modification or disapproval. After an order is entered on its journal, the department
shall make payment, if applicable, to the applicant from the
auction recovery fund in accordance with the order and shall
provide to the applicant by certified mail, return receipt
requested, a copy of the order and a statement of the time and
method by which an appeal may be perfected. In addition, the
department shall mail a copy of the order to the attorney or other
representative of the applicant. (F) An order of the director issued under this section
constitutes a final determination of the director for purposes of
appeal. An applicant who is denied compensation from the auction
recovery fund or who receives an award less than the award
requested may appeal the order of the director. Notices of appeal
shall be filed in the manner provided in section 119.12 of the
Revised Code.
Section 2. That existing sections 4707.02, 4707.20, 4707.21, and 4707.26 of the Revised Code are hereby repealed.
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