By: Anderson (Senate Sponsor - Carona) H.B. No. 3038
(In the Senate - Received from the House May 9, 2013;
May 10, 2013, read first time and referred to Committee on Business
and Commerce; May 16, 2013, reported favorably by the following
vote: Yeas 7, Nays 0; May 16, 2013, sent to printer.)
A BILL TO BE ENTITLED
AN ACT
relating to licensing and regulation of auctioneers; authorizing a
fee.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 1802.001, Occupations Code, is amended
by amending Subdivisions (3) and (5) and adding Subdivisions (10),
(11), (12), and (13) to read as follows:
(3) "Auction" means the sale of property by
competitive bid using any method, format, or venue.
(5) "Auctioneer" means any person [an individual] who:
(A) sells or offers to sell property at auction,
with or without receiving [valuable] consideration; or
(B) solicits, negotiates, or executes an auction
listing contract [, as a bid caller].
(10) "Personal property" means any property other than
real property, including all tangible and intangible types of
property.
(11) "Real property" means land, including
improvements, fixtures, and other property appurtenant to or used
in connection with the land, and any other estate, interest, or
legal or equitable right in the land, improvement, fixture, or
appurtenant property.
(12) "Recurring basis" means more than once every 24
months.
(13) "Sealed bid auction" means a sealed bidding
procedure that incorporates or allows for the competitive
increasing or decreasing of bids after the opening of sealed bids.
SECTION 2. Sections 1802.002 and 1802.003, Occupations
Code, are amended to read as follows:
Sec. 1802.002. APPLICABILITY. (a) This chapter does not
apply to:
(1) a sale conducted by order of a United States court
under Title 11, United States Code;
(2) a sale conducted by an employee of the United
States, this state, or a political subdivision of this state in the
course and scope of employment;
(3) a sale conducted by a charitable, religious, or
civic organization, including an organization having a tax exempt
status under Section 501(c), Internal Revenue Code of 1986, or
organized as a nonprofit entity, if the person organizing,
arranging, or conducting the auction receives no compensation;
(4) a sale conducted by any person [an individual] of
the person's [individual's] property if the person [individual] is
not engaged in the business of selling property at auction [as an
auctioneer] on a recurring basis;
(5) a foreclosure sale of real property personally
conducted by a trustee under a deed of trust;
(6) a foreclosure sale of personal property personally
conducted by:
(A) a person who holds a security interest in the
property, including a mortgage; or
(B) an employee or agent of a person described by
Paragraph (A) acting in the course and scope of employment, if:
(i) the employee or agent is not otherwise
engaged in the auction business; and
(ii) all property for sale in the auction is
subject to a security agreement;
(7) a sale conducted by sealed bid without the option
of increasing or decreasing the amount of a bid;
(8) an auction conducted only for student training
purposes as part of a course of study approved by the department
[executive director for auctioneers];
(9) an auction conducted by a posted stockyard or
market agency as defined by the federal Packers and Stockyards Act
(7 U.S.C. Section 181 et seq.), as amended;
(10) an auction of livestock conducted by a nonprofit
livestock trade association chartered in this state, if the auction
involves only the sale of livestock owned by members of the trade
association; [or]
(11) an auction conducted by a charitable or nonprofit
organization chartered in this state, if the auction:
(A) is part of a fair that is organized under
state, county, or municipal authority; and
(B) involves only the sale of property owned by
the organization's members; or
(12) a sale or auction conducted outside of this
state.
(b) This chapter applies to a sealed bid auction.
Sec. 1802.003. PREEMPTION. A political subdivision of this
state may not levy on or collect from an auctioneer [or associate
auctioneer] a license tax or fee as a regulatory or revenue measure
or require the licensing of an auctioneer [or associate
auctioneer], if the auctioneer [or associate auctioneer] holds a
license under this chapter and is in compliance with this chapter.
SECTION 3. Sections 1802.051(a) and (c), Occupations Code,
are amended to read as follows:
(a) A person may not act as an auctioneer of real or personal
property [or associate auctioneer in an auction held] in this state
unless the person [is an individual who] holds a license issued by
the executive director under this chapter.
(c) An individual [A person] who is licensed under this
chapter may not act as an auctioneer for an entity unless the
entity:
(1) is an auction company owned or operated by an
individual [a person] who is licensed under this chapter; [or]
(2) holds a dealer general distinguishing number
issued under Subchapter B, Chapter 503, Transportation Code, and
the auction is for the purpose of auctioning vehicles as defined by
Section 503.001, Transportation Code; or
(3) is a real estate brokerage firm that is operated by
a broker licensed by the Texas Real Estate Commission.
SECTION 4. Section 1802.052(a), Occupations Code, is
amended to read as follows:
(a) An individual is eligible for an auctioneer's license if
the individual:
(1) is at least 18 years of age;
(2) is a citizen of the United States or a legal alien;
(3) [either:
[(A)] passes a written or oral examination
demonstrating knowledge of the auction business and of the laws of
this state relating to the auction business[; or
[(B) shows proof of employment by a licensed
auctioneer for at least two years during which the applicant
participated in at least 10 auctions];
(4) holds a high school diploma or a high school
equivalency certificate;
(5) has not been convicted of a felony during the five
years preceding the date of application; and
(6) has completed at least 80 hours of classroom
instruction at an auction school with a curriculum approved by the
department in accordance with the standards and procedures
established by rule adopted under this chapter.
SECTION 5. Section 1802.054, Occupations Code, is amended
to read as follows:
Sec. 1802.054. APPLICATION FOR LICENSE. An applicant for a
license must apply to the executive director on a form provided by
the executive director that establishes the applicant's
eligibility for the license. The application must be accompanied
by:
(1) any fee required for the auctioneer education and
recovery fund authorized under Section 1802.153 [the required
bond];
(2) the required license fee; and
(3) either:
(A) the permit number of a sales tax permit
issued to the applicant by the comptroller under Subchapter F,
Chapter 151, Tax Code; or
(B) proof of exemption from the tax permit
requirement under Chapter 151, Tax Code.
SECTION 6. Section 1802.101, Occupations Code, is amended
to read as follows:
Sec. 1802.101. AUCTIONEER EDUCATION ADVISORY BOARD. The
advisory board shall advise the commission on educational matters,
operational matters, and common practices within the auction
industry.
SECTION 7. Sections 1802.102(a) and (b), Occupations Code,
are amended to read as follows:
(a) The advisory board consists of seven [six] members
appointed as follows:
(1) four [three] members who are licensed auctioneers
appointed by the presiding officer of the commission, with the
commission's approval;
(2) the administrative head, or the administrative
head's designee, of any state agency or office that is selected by
the commission [executive director of the Texas Economic
Development and Tourism Office or the director's designee]; and
(3) two public members.
(b) In appointing advisory board members under Subsection
(a)(1), the presiding officer of the commission shall consider the
geographical diversity of the members [may not appoint members who
reside in contiguous senatorial districts].
SECTION 8. Section 1802.103(a), Occupations Code, is
amended to read as follows:
(a) The members appointed under Section 1802.102(a)(1)
serve two-year terms that expire on September 1 and may not serve
more than two consecutive terms. If a vacancy occurs during the
term of such a member, the presiding officer of the commission, with
the commission's approval, shall appoint a replacement to serve for
the remainder of the term.
SECTION 9. Section 1802.104, Occupations Code, is amended
to read as follows:
Sec. 1802.104. PRESIDING OFFICER. The presiding officer of
the commission, with the commission's approval, shall appoint a
member of the advisory board to serve as presiding officer of the
board. The presiding officer serves for two years and may not serve
more than two consecutive terms.
SECTION 10. Section 1802.107(b), Occupations Code, is
amended to read as follows:
(b) The advisory board may meet at other times at the call of
the presiding officer of the commission or the executive director.
SECTION 11. Section 1802.153(b), Occupations Code, is
amended to read as follows:
(b) If the balance in the fund on December 31 of a year is
less than $350,000 [$300,000], each license holder at the next
license renewal shall pay, in addition to the renewal fee, a fee
that is equal to the greater of $50 or a pro rata share of the amount
necessary to obtain a balance in the fund of $350,000 [$300,000].
SECTION 12. Section 1802.156, Occupations Code, is amended
to read as follows:
Sec. 1802.156. EDUCATION EXPENDITURES PERMITTED. The
executive director may use amounts in excess of $300,000 [$250,000]
in the fund to:
(1) advance education and research in the
auctioneering profession for the benefit of license holders and to
improve and increase the efficiency of the industry;
(2) underwrite educational seminars, training
centers, and other educational projects for the use and benefit of
license holders;
(3) sponsor, contract, and underwrite other
educational and research projects that advance the auctioneering
profession in this state; and
(4) cooperate with associations of auctioneers and
other groups for the education and advancement of the auctioneering
profession in this state.
SECTION 13. Section 1802.206, Occupations Code, is amended
to read as follows:
Sec. 1802.206. PAYMENT LIMITS. (a) The executive director
may not pay a single aggrieved party more than $15,000 [$10,000].
(b) The total payment of all claims by more than one
aggrieved party arising from one auction at one location,
regardless of the length of the auction, may not exceed $30,000
[$20,000].
(c) The total payment of claims against a single auctioneer
may not exceed $30,000 [$20,000].
SECTION 14. Section 1802.209(a), Occupations Code, is
amended to read as follows:
(a) This subchapter and Section 1802.252 do not limit the
commission's or executive director's authority to take disciplinary
action against a license holder for a violation of this chapter or a
rule adopted under this chapter.
SECTION 15. Section 1802.251, Occupations Code, is amended
to read as follows:
Sec. 1802.251. DENIAL OF APPLICATION; SUSPENSION OR
REVOCATION OF LICENSE. The commission or executive director may
deny an application for a license or suspend or revoke the license
of any auctioneer for:
(1) violating this chapter or a rule adopted under
this chapter;
(2) obtaining a license through false or fraudulent
representation;
(3) making a substantial misrepresentation in an
application for an auctioneer's license;
(4) engaging in a continued and flagrant course of
misrepresentation or making false promises through an agent,
advertising, or otherwise;
(5) failing to account for or remit, within a
reasonable time, money belonging to another that is in the
auctioneer's possession and commingling funds of another with the
auctioneer's funds or failing to keep the funds of another in an
escrow or trust account; or
(6) violating a provision of the Business & Commerce
Code in conducting an auction.
SECTION 16. Section 1802.253(a), Occupations Code, is
amended to read as follows:
(a) Before denying an application for a license, the
commission or executive director shall:
(1) set the matter for a hearing to be conducted by the
State Office of Administrative Hearings; and
(2) before the hearing date, notify the applicant in
writing of:
(A) the charges alleged or the question to be
determined at the hearing; and
(B) the date and location of the hearing.
SECTION 17. Sections 1802.001(2), 1802.053, 1802.062,
1802.105, and 1802.253(d), Occupations Code, are repealed.
SECTION 18. (a) The presiding officer of the Texas
Commission of Licensing and Regulation shall appoint an additional
member to the auctioneer education advisory board as required by
Section 1802.102, Occupations Code, as amended by this Act, not
later than September 1, 2013, for a term expiring September 1, 2015.
(b) Section 1802.103, Occupations Code, as amended by this
Act, applies only to the appointment of a member of the auctioneer
education advisory board on or after the effective date of this Act
and does not affect the entitlement of a member serving on the board
immediately before the effective date of this Act to continue to
serve for the remainder of the member's term.
SECTION 19. Section 1802.206, Occupations Code, as amended
by this Act, applies only to a claim filed under Section 1802.202,
Occupations Code, on or after the effective date of this Act. A
claim filed before that date is governed by the law in effect on the
date the claim was filed, and the former law is continued in effect
for that purpose.
SECTION 20. This Act takes effect immediately if it
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for immediate
effect, this Act takes effect September 1, 2013.
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