OHIO LEGISLATIVE SERVICE COMMISSION Office of Research Legislative Budget www.lsc.ohio.gov and Drafting Office H.B. 321 Final Analysis 134th General Assembly Click here for H.B. 321’s Fiscal Note Primary Sponsors: Reps. Kick and B. Young Effective date: September 13, 2022 Effective Date: Jeff Grim, Research Analyst Nick Thomas, Research Analyst SUMMARY Auction law Elimination of licenses Eliminates the requirement that a person serve as an apprentice auctioneer prior to becoming an auctioneer. As a result of eliminating the apprentice auction program, requires applicants for an auctioneer’s license to successfully complete a course in auctioneering at an institution approved by the Ohio Auctioneers Commission. Eliminates the special auctioneer license and requires a special auctioneer to apply for an auction firm license. Regulatory authority Eliminates the exemption for online auctions from the law governing auctioneers, but retains an exemption for auction mediation companies (companies, such as eBay, that provide a forum through the internet for persons to sell their real or personal property via silent bids using a computer or other electronic device). If a person auctions real or personal property via the internet, requires the person to be licensed as an auctioneer or auction firm, provided the person is not otherwise exempt from licensure. Clarifies that auction firms may provide auction services for online or live auctions. Clarifies that an auction firm license is not required when personal property is taken on consignment for free for sale at auction. August 8, 2022 Office of Research and Drafting LSC Legislative Budget Office Clarifies that a person who takes personal property on consignment for sale at auction is not a consignee if the person does not take the property in the regular course of business. Auctioneer licensure Revises the requirements regarding examinations for auctioneer license applicants, including by: Eliminating the requirement that an applicant pass an oral examination administered by the Ohio Auctioneers Commission; and Increasing the frequency that the Department of Agriculture must hold written examinations to 12 times a year, rather than four times a year. Eliminates the authorization for an Ohio resident to conduct auctions in Ohio under authority of a license issued by another state with a reciprocal agreement with Ohio. Establishes requirements and procedures regarding an incomplete application for an auctioneer license, including a requirement that the Director of Agriculture deny an application if an applicant fails to submit required information within 90 days. Auction firm licensure validity period Extends the term of an auction firm license from one to two years and requires the Director to adopt transition procedures. Continuing education Requires a licensed auctioneer and an auction firm manager of a licensed auction firm, at the time of renewal, to submit an affidavit stating that the auctioneer or manager has completed the required continuing education (C.E.). Establishes general requirements for licensed auctioneers and auction firm managers of licensed auction firms to complete eight hours of C.E. prior to renewing a license. Prescribes the hours of instruction and the subjects for C.E., including contract law, auction ethics, and business math and accounting. Specifies that an auctioneer license or auction firm license is automatically suspended if the Director determines that a licensed auctioneer or the auction firm manager of a licensed auction firm has failed to complete the C.E. requirements. Specifies that a suspended license is automatically revoked if the licensed auctioneer or auction firm manager fails to submit proof of completion of C.E. in 180 days. Grants the Ohio Auctioneers Commission oversight of C.E. courses of study and providers. Miscellaneous Eliminates a required transfer of money from the Auctioneers Fund to the Auction Recovery Fund if the Auctioneers Fund exceeds $300,000. P a g e |2 H.B. 321 Final Analysis Office of Research and Drafting LSC Legislative Budget Office Allows a seller of property to withdraw the property from an absolute auction after the auction is opened and there is public solicitation or calling for bids if no bid is made within a reasonable time. Self-service storage facilities Lien enforcement notices Removes the requirement that lien enforcement notices sent by email also be sent by certified or first-class mail. Allows a lien enforcement notice to be sent by email to an occupant, but to no other parties and only if certain conditions apply. Requires, if successful delivery cannot be established, the owner to resend the notice via certified mail, first-class mail, or private delivery service. Replaces a provision deeming an email notice delivered when it is properly addressed and sent with a provision deeming it delivered when the owner receives a response or return receipt. Towing Grants self-service storage facility owners discretion in deciding whether and when to have motor vehicles, trailers, and watercraft removed from self-service storage spaces when an occupant is in default or when other personal property in the space will be or was sold to collect amounts due. Adds trailers to the property for which a 30-day notice is required prior to towing it due to default. Removes a provision requiring a response to a facility owner’s lien enforcement notice from a person holding a lien on a motor vehicle or watercraft prior to a facility owner towing it. Adds trailers to the property for which a facility owner is not liable for damages following towing. Requires a lien enforcement notice to include the name of the towing service or storage facility. Requires the name and street address of the towing service or storage facility to be made available to the occupant or lienholder upon presentation of proof of an interest in the motor vehicle, trailer, or watercraft. P a g e |3 H.B. 321 Final Analysis Office of Research and Drafting LSC Legislative Budget Office TABLE OF CONTENTS Auction Law – overview .................................................................................................................. 4 Elimination of licenses................................................................................................................. 5 Apprentice auctioneer license................................................................................................ 5 Special auctioneer license ...................................................................................................... 5 Regulatory authority ................................................................................................................... 6 Internet auctions .................................................................................................................... 6 Consignment sales .................................................................................................................. 6 Auctioneer licensure ................................................................................................................... 7 Examinations .......................................................................................................................... 7 Reciprocity .............................................................................................................................. 7 Incomplete application ........................................................................................................... 7 Auction firm licensure validity period ......................................................................................... 7 Continuing education .................................................................................................................. 8 Requirements for auctioneers and auction firm managers ................................................... 8 Subjects................................................................................................................................... 8 License suspension ................................................................................................................. 8 Continuing education providers ............................................................................................. 9 Auctioneers Fund ........................................................................................................................ 9 Absolute auctions ...................................................................................................................... 10 Self-service storage facilities......................................................................................................... 10 Lien enforcement notices.......................................................................................................... 10 Towing ....................................................................................................................................... 11 DETAILED ANALYSIS Auction Law – overview In Ohio, the Ohio Department of Agriculture regulates auctions and auctioneers. The act modifies the licensure requirements for a person who wishes to act as an auctioneer and a firm that wishes to manage a personal property online or live auction (auction firm). 1 It also eliminates the position of apprentice auctioneer and special auctioneer. Finally, the act revises the Department’s regulatory authority regarding internet auctions and consignment sales; modifies and expands continuing education requirements for auction firm managers and 1 An auction firm also takes and advertises personal property on consignment to be sold at auction by a licensed auctioneer (R.C. 4707.01). P a g e |4 H.B. 321 Final Analysis Office of Research and Drafting LSC Legislative Budget Office licensed auctioneers; and makes changes to the law governing transfers of money from the Auctioneers Fund to the Auction Recovery Fund. Elimination of licenses Apprentice auctioneer license The act eliminates the requirement that a person serve as an apprentice auctioneer prior to becoming a licensed auctioneer. Consequently, it eliminates the annual apprentice auctioneer license. Under former law, in order for a person to become a licensed auctioneer, the person first had to serve as a licensed apprentice auctioneer for at least 12 months. The person also had to participate as a bid caller in at least 12 auctions under the direct supervision of the apprentice’s sponsoring auctioneer. An applicant for an apprentice auctioneer license had to meet certain qualifications, including: 1. Providing proof of financial responsibility in an irrevocable letter of credit or a cash or surety bond of $25,000; 2. Successfully completing a course of study at an institution approved by the State Auctioneers Commission; and 3. Passing oral and written examinations.2 Because it eliminates the apprentice auctioneer program, the act requires all applicants for an auctioneer’s license to successfully complete a course in auctioneering at an institution approved by the Commission prior to licensure.3 Special auctioneer license The act eliminates the special auctioneer license and instead requires any previously licensed special auctioneer to apply for an auction firm license.4 Under former law, the Department issued a special auctioneer’s license to the principal owner of an auction company that had been in operation on or before May 1, 1991. According to an official from the Department, S.B. 146 (enacted in 1990 by the 118 th General Assembly) created the special auctioneer license as a transition from the previously issued auction company license to either an auctioneer or auction firm license, depending on the activity to be licensed.5 2 R.C. 4707.09, repealed. 3 R.C. 4707.07 and Section 5. 4 R.C. 4707.071, repealed. 5 Phone conversation with an official from the Department of Agriculture, August 2019. P a g e |5 H.B. 321 Final Analysis Office of Research and Drafting LSC Legislative Budget Office Regulatory authority Internet auctions The act eliminates a provision of law that exempted certain internet auctions from the auctioneers law, specifically internet auctions that applied to sales of real or personal property conducted over the internet that were not conducted in conjunction with a live auction. However, it retains an exemption for an auction mediation company. An auction mediation company is a company that provides a forum through the internet for a person to sell the person’s real or personal property via submission of silent bids using a computer or other electronic device.6 For example, eBay is an auction mediation company. It also retains an exemption from the auctioneer’s law that applies to the owner of any real or personal property desiring to sell the property at auction, provided the property was not acquired for purpose of resale.7 Thus, if a person qualifies for this exemption, the person may conduct an online auction without obtaining an auctioneer’s license. The act clarifies that a person providing auction services for online or live auctions is considered an auction firm and must obtain an auction firm license. Under prior law, a person that provided auction services for an exempt internet auction (see description above) was not considered an auction firm and, thus, did not require a license. An online auction is an auction or sale at auction of real or personal property that is conducted via a website or similar interactive communication media in which the website or communication media accepts or rejects bids and declares items, parcels, or lots sold. A live auction is an auction that is hosted by an auctioneer in real time.8 Consignment sales The act alters the definition of “consignee.” Generally, a consignee is a person or auction firm that takes personal property on consignment to be sold at an auction by a licensed auctioneer. The act adds that in order to qualify as a consignee, the person must take the personal property in the regular course of business. Further, it clarifies that the definition applies to both online and live auctions. Prior to the act’s enactment, there was an understanding that the amendments to the definition of consignee would operate to exempt from the auctioneer’s law a person who takes (not for a fee or other consideration) the personal property of a parent, neighbor, or friend for sale at an online auction. However, subsequent to enactment, it is not clear that the act achieved this desired result. Thus, follow- up legislation may be necessary to clarify this issue.9 6 R.C. 4707.01 and 4707.02(B). 7 R.C. 4707.02(B)(2). 8 R.C. 4707.01. 9 R.C. 4707.01. P a g e |6 H.B. 321 Final Analysis Office of Research and Drafting LSC Legislative Budget Office Auctioneer licensure Examinations The act revises the requirements regarding oral and written examinations for auctioneer license applicants by: 1. Eliminating the requirement that an applicant pass an oral examination administered by the Commission; 2. Increasing the frequency that the Department must hold written examinations to 12 times a year, rather than four times a year; and 3. Eliminating the requirement that a person retake an examination after the Department suspends their license. A Department official stated that a suspension is not long enough to warrant a reexamination.10