Texas 2023 - 88th Regular

Texas House Bill HB4416 Compare Versions

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1	1	H.B. No. 4416
2	2
3	3
4	4	AN ACT
5	5	relating to the regulation of auctioneering by the Texas Department
6	6	of Licensing and Regulation; authorizing an administrative
7	7	penalty.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. Section 1802.001(2), Occupations Code, is
10	10	amended to read as follows:
11	11	(2) "Associate auctioneer" means an individual who,
12	12	for compensation, sells or offers to sell property at an auction [is
13	13	employed by and] under the direct supervision of a licensed
14	14	auctioneer [to sell or offer to sell property at an auction].
15	15	SECTION 2. Subchapter A, Chapter 1802, Occupations Code, is
16	16	amended by adding Section 1802.005 to read as follows:
17	17	Sec. 1802.005. RULES. The commission shall adopt rules
18	18	necessary to administer and enforce this chapter.
19	19	SECTION 3. Sections 1802.051(a) and (c), Occupations Code,
20	20	are amended to read as follows:
21	21	(a) A person may not act as an auctioneer or associate
22	22	auctioneer in this state unless the person holds a license issued by
23	23	the department [executive director] under this chapter.
24	24	(c) Except as provided by Subsection (d), an individual who
25	25	is licensed under this chapter may not act as an auctioneer or
26	26	associate auctioneer for an entity unless the entity:
27	27	(1) is an auction company owned or operated by an
28	28	individual who is licensed under this chapter; or
29	29	(2) is a real estate brokerage firm that is operated by
30	30	a broker licensed by the Texas Real Estate Commission.
31	31	SECTION 4. Section 1802.052, Occupations Code, is amended
32	32	to read as follows:
33	33	Sec. 1802.052. ELIGIBILITY FOR AUCTIONEER'S LICENSE. (a)
34	34	An individual is eligible for an auctioneer's license if the
35	35	individual:
36	36	(1) is at least 18 years of age;
37	37	(2) is a citizen of the United States or a legal alien;
38	38	(3) either:
39	39	(A) passes a written or oral examination
40	40	demonstrating knowledge of the auction business and of the laws of
41	41	this state relating to the auction business; or
42	42	(B) shows proof of employment as a licensed
43	43	associate auctioneer [by a licensed auctioneer] for at least two
44	44	years and participation in at least 10 auctions during that
45	45	employment;
46	46	(4) holds a high school diploma or a high school
47	47	equivalency certificate; and
48	48	(5) has completed at least 80 hours of classroom
49	49	instruction at an auction school with a curriculum approved by the
50	50	department in accordance with the standards and procedures
51	51	established by rule adopted under this chapter.
52	52	(b) The department, as provided by rule, may charge an
53	53	auction school a reasonable fee for approving the curriculum as
54	54	required under Subsection (a)(5) [(a)(6)].
55	55	SECTION 5. Section 1802.053, Occupations Code, is amended
56	56	to read as follows:
57	57	Sec. 1802.053. ELIGIBILITY FOR ASSOCIATE AUCTIONEER
58	58	LICENSE. An individual is eligible for an associate auctioneer
59	59	license if the individual [is]:
60	60	(1) is a citizen of the United States or a legal alien;
61	61	and
62	62	(2) works [employed] under the direct supervision of
63	63	an auctioneer licensed under this chapter.
64	64	SECTION 6. Section 1802.054, Occupations Code, is amended
65	65	to read as follows:
66	66	Sec. 1802.054. APPLICATION FOR LICENSE. (a) An applicant
67	67	for a license must apply to the department [executive director] on a
68	68	form and in a manner prescribed [provided] by the department
69	69	[executive director that establishes the applicant's eligibility
70	70	for the license]. The application must be accompanied by:
71	71	(1) any fee required for the auctioneer education and
72	72	recovery fund authorized under Section 1802.153;
73	73	(2) the required application fee; and
74	74	(3) either:
75	75	(A) the permit number of a sales tax permit
76	76	issued to the applicant by the comptroller under Subchapter F,
77	77	Chapter 151, Tax Code; or
78	78	(B) proof of exemption from the tax permit
79	79	requirement under Chapter 151, Tax Code.
80	80	(b) A nonresident applicant must submit with an application
81	81	for a license under this chapter a written irrevocable consent to
82	82	service of process. The consent must:
83	83	(1) be in the form and supported by additional
84	84	information that the commission by rule requires;
85	85	(2) provide that an action relating to any transaction
86	86	governed by this chapter may be commenced against the license
87	87	holder in the proper court of any county of this state in which the
88	88	cause of action may arise or in which the plaintiff may reside by
89	89	service of process on the executive director as the license
90	90	holder's agent; and
91	91	(3) include a statement stipulating and agreeing that
92	92	service provided by this section is as valid and binding as if
93	93	service had been made on the person according to the laws of this or
94	94	any other state.
95	95	SECTION 7. Section 1802.055, Occupations Code, is amended
96	96	to read as follows:
97	97	Sec. 1802.055. APPLICATION FOR EXAMINATION. An individual
98	98	who meets the requirements [establishes that the individual is
99	99	eligible] for an auctioneer's license may apply to the department
100	100	[executive director] to take the license examination. The
101	101	application must be accompanied by the application fee.
102	102	SECTION 8. Section 1802.056(a), Occupations Code, is
103	103	amended to read as follows:
104	104	(a) The department shall prepare, recognize, administer, or
105	105	arrange for the administration of a license examination [must be]
106	106	designed to establish:
107	107	(1) an applicant's general knowledge of the auction
108	108	business;
109	109	(2) the principles of conducting an auction; and
110	110	(3) the laws of this state relating to auctioneers.
111	111	SECTION 9. Section 1802.102(b), Occupations Code, is
112	112	amended to read as follows:
113	113	(b) In appointing advisory board members [under Subsection
114	114	(a)(1)], the presiding officer of the commission shall consider the
115	115	geographical diversity of the members.
116	116	SECTION 10. Section 1802.103(a), Occupations Code, is
117	117	amended to read as follows:
118	118	(a) Advisory board [The] members [appointed under Section
119	119	1802.102(a)(1)] serve six-year [two-year] terms that expire on
120	120	September 1 of each odd-numbered year. Members [and] may not serve
121	121	more than two consecutive terms. If a vacancy occurs during the
122	122	term of such a member, the presiding officer of the commission, with
123	123	the commission's approval, shall appoint a replacement to serve for
124	124	the remainder of the term.
125	125	SECTION 11. Section 1802.106, Occupations Code, is amended
126	126	to read as follows:
127	127	Sec. 1802.106. COMPENSATION. A member of the advisory
128	128	board [appointed under Section 1802.102(a)(1)] may not receive
129	129	compensation from the department for serving on the advisory board.
130	130	SECTION 12. Chapter 1802, Occupations Code, is amended by
131	131	adding Subchapter C-1 to read as follows:
132	132	SUBCHAPTER C-1. PRACTICE STANDARDS
133	133	Sec. 1802.121. WRITTEN CONTRACTS. (a) An auctioneer who
134	134	agrees to provide services to a person shall provide to the person a
135	135	written contract with the terms of the agreement.
136	136	(b) Each contract for the services of an auctioneer must
137	137	include information required by the commission by rule.
138	138	(c) Before any auction, the auctioneer and client must
139	139	agree in writing to an itemized inventory of property to be sold or
140	140	offered for sale by the auctioneer at auction. An amendment to the
141	141	inventory must be in writing and signed by both parties.
142	142	Sec. 1802.122. STANDARDS OF PRACTICE. The commission by
143	143	rule shall adopt standards for the practice of auctioneers and
144	144	associate auctioneers, including standards for:
145	145	(1) the maintenance and use of a trust or escrow
146	146	account for funds belonging or owed to another; and
147	147	(2) required consumer notices.
148	148	SECTION 13. Section 1802.152(a), Occupations Code, is
149	149	amended to read as follows:
150	150	(a) The department is the manager of the fund and shall[:
151	151	[(1) administer the fund without appropriation;
152	152	[(2)] maintain books and records of the fund [as
153	153	required by the executive director;
154	154	[(3) appear at hearings or judicial proceedings; and
155	155	[(4) invest and reinvest the fund's assets as
156	156	instructed by the executive director].
157	157	SECTION 14. Sections 1802.153(a) and (b), Occupations Code,
158	158	are amended to read as follows:
159	159	(a) In addition to any other fees required by this chapter,
160	160	an applicant entitled to receive a license under this chapter must
161	161	pay a fee before the department [executive director] issues the
162	162	license.
163	163	(b) If the balance in the fund on August [December] 31 of a
164	164	year is less than $350,000, each license holder at the next license
165	165	renewal shall pay, in addition to the renewal fee, a fee that is
166	166	equal to the greater of $50 or a pro rata share of the amount
167	167	necessary to obtain a balance in the fund of $350,000.
168	168	SECTION 15. Section 1802.155(b), Occupations Code, is
169	169	amended to read as follows:
170	170	(b) If the fund contains insufficient assets to pay the
171	171	consumer:
172	172	(1) the department shall record the time and date an
173	173	order for payment to a consumer was received; and
174	174	(2) the department [executive director] shall pay
175	175	consumers for whom an order is recorded under Subdivision (1) as
176	176	funds become available in the order of the recorded time and date of
177	177	the order.
178	178	SECTION 16. Section 1802.202(b), Occupations Code, is
179	179	amended to read as follows:
180	180	(b) The department [executive director] may not pay a claim
181	181	against an auctioneer who was not licensed at the time of the
182	182	transaction on which the claim is based.
183	183	SECTION 17. Section 1802.203, Occupations Code, as amended
184	184	by Chapters 816 (S.B. 279) and 1215 (S.B. 1147), Acts of the 78th
185	185	Legislature, Regular Session, 2003, is reenacted and amended to
186	186	read as follows:
187	187	Sec. 1802.203. HEARING. If the amount determined by the
188	188	department under Section 1802.202 is disputed by the auctioneer [or
189	189	the aggrieved party], the department shall refer the matter to the
190	190	State Office of Administrative Hearings for a hearing on the
191	191	disputed claim.
192	192	SECTION 18. Sections 1802.205(a) and (b), Occupations Code,
193	193	are amended to read as follows:
194	194	(a) If the department's determination under Section
195	195	1802.202 is not disputed by the auctioneer [or the aggrieved
196	196	party], the department [executive director] shall pay the claim
197	197	from the fund, subject to Section 1802.206.
198	198	(b) If a hearing is held on the department's determination,
199	199	the department [executive director] shall pay to the aggrieved
200	200	party the amount of actual damages as determined by an
201	201	administrative law judge with the State Office of Administrative
202	202	Hearings who presided over the hearing, subject to Section 1802.206
203	203	[executive director].
204	204	SECTION 19. Sections 1802.206(a) and (c), Occupations Code,
205	205	are amended to read as follows:
206	206	(a) The department [executive director] may not pay a single
207	207	aggrieved party more than $15,000 for all claims arising from a
208	208	single auction.
209	209	(c) The total payment of claims against a single auctioneer
210	210	arising from a single auction may not exceed $100,000 [$30,000].
211	211	SECTION 20. Section 1802.207, Occupations Code, is amended
212	212	to read as follows:
213	213	Sec. 1802.207. REIMBURSEMENT; INTEREST. (a) If the
214	214	department [executive director] pays a claim against an auctioneer,
215	215	the auctioneer shall:
216	216	(1) reimburse the fund immediately or agree in writing
217	217	to reimburse the fund on a schedule to be determined by rule of the
218	218	commission; and
219	219	(2) immediately pay the aggrieved party any amount due
220	220	to that party or agree in writing to pay the party on a schedule to
221	221	be determined by rule of the commission.
222	222	(b) Payments made by an auctioneer to the fund or to an
223	223	aggrieved party under this section include interest accruing at the
224	224	rate of eight percent a year beginning on the date the department
225	225	[executive director] pays the claim.
226	226	SECTION 21. Section 1802.208, Occupations Code, is amended
227	227	to read as follows:
228	228	Sec. 1802.208. SUBROGATION. If the department [executive
229	229	director] pays a claim against an auctioneer, the department is
230	230	subrogated to all rights of the aggrieved party against the
231	231	auctioneer to the extent of the amount paid to the aggrieved party.
232	232	SECTION 22. Section 1802.251, Occupations Code, is amended
233	233	to read as follows:
234	234	Sec. 1802.251. DISCIPLINARY ACTION; ADMINISTRATIVE PENALTY
235	235	[DENIAL OF APPLICATION; SUSPENSION OR REVOCATION OF LICENSE]. The
236	236	commission or executive director may take any action or impose a
237	237	penalty under Subchapter F or G, Chapter 51, against an [deny an
238	238	application for a license or suspend or revoke the license of any]
239	239	auctioneer or associate auctioneer for:
240	240	(1) violating this chapter or a rule adopted under
241	241	this chapter;
242	242	(2) obtaining a license through false or fraudulent
243	243	representation;
244	244	(3) making a substantial misrepresentation in an
245	245	application for an auctioneer's license;
246	246	(4) engaging in a continued and flagrant course of
247	247	misrepresentation or making false promises through an agent,
248	248	advertising, or otherwise;
249	249	(5) failing to account for or remit, within a
250	250	reasonable time, money or property belonging to another that is in
251	251	the auctioneer's possession or [and] commingling funds of another
252	252	with the auctioneer's funds or failing to keep the funds of another
253	253	in an escrow or trust account; [or]
254	254	(6) violating a provision of the Business & Commerce
255	255	Code in conducting an auction; or
256	256	(7) violating a rule or order of the commission or
257	257	executive director.
258	258	SECTION 23. Sections 1802.252(a) and (c), Occupations Code,
259	259	are amended to read as follows:
260	260	(a) The commission may revoke a license issued under this
261	261	chapter if the department [executive director] makes a payment from
262	262	the fund as the result of an action of the license holder.
263	263	(c) An auctioneer or associate auctioneer is not eligible
264	264	for a new license until the auctioneer or associate auctioneer has
265	265	repaid in full the amount paid from the fund on the auctioneer's
266	266	account, including interest[, unless:
267	267	[(1) a hearing is held; and
268	268	[(2) the executive director issues a new probated
269	269	license].
270	270	SECTION 24. Section 1802.253, Occupations Code, is amended
271	271	by amending Subsection (a) and adding Subsection (d) to read as
272	272	follows:
273	273	(a) If the department proposes to deny [Before denying] an
274	274	application for a license or take a disciplinary action or impose an
275	275	administrative penalty against a license holder, the applicant or
276	276	license holder is entitled to [, the commission or executive
277	277	director shall:
278	278	[(1) set the matter for] a hearing [to be conducted by
279	279	the State Office of Administrative Hearings; and
280	280	[(2) before the hearing date, notify the applicant in
281	281	writing of:
282	282	[(A) the charges alleged or the question to be
283	283	determined at the hearing; and
284	284	[(B) the date and location of the hearing].
285	285	(d) A proceeding relating to a license denial or
286	286	disciplinary action by the department under this chapter is a
287	287	contested case under Chapter 2001, Government Code.
288	288	SECTION 25. Section 1802.301(a), Occupations Code, is
289	289	amended to read as follows:
290	290	(a) A person commits an offense if the person acts as an
291	291	auctioneer or an associate auctioneer without a license.
292	292	SECTION 26. The following provisions of the Occupations
293	293	Code are repealed:
294	294	(1) Sections 1802.056(b) and (c);
295	295	(2) Section 1802.059;
296	296	(3) Section 1802.060;
297	297	(4) Section 1802.103(b);
298	298	(5) Section 1802.109;
299	299	(6) Section 1802.154;
300	300	(7) Section 1802.156;
301	301	(8) Section 1802.201;
302	302	(9) Section 1802.206(b); and
303	303	(10) Section 1802.303.
304	304	SECTION 27. The changes in law made by this Act to Section
305	305	1802.103, Occupations Code, apply only to the term of a member of
306	306	the Auctioneer Advisory Board appointed to the board on or after the
307	307	effective date of this Act.
308	308	SECTION 28. The changes in law made by this Act to Chapter
309	309	1802, Occupations Code, do not affect the validity of a proceeding
310	310	pending before a court or other governmental entity on the
311	311	effective date of this Act.
312	312	SECTION 29. The repeal by this Act of Section 1802.303,
313	313	Occupations Code, does not apply to an offense committed under that
314	314	section before the effective date of this Act. An offense committed
315	315	before the effective date of this Act is governed by the law in
316	316	effect on the date the offense was committed, and the former law is
317	317	continued in effect for that purpose. For purposes of this section,
318	318	an offense was committed before the effective date of this Act if
319	319	any element of the offense was committed before that date.
320	320	SECTION 30. The changes in law made by this Act apply only
321	321	to conduct constituting a violation of Chapter 1802, Occupations
322	322	Code, that occurs on or after the effective date of this
323	323	Act. Conduct constituting a violation of Chapter 1802,
324	324	Occupations Code, that occurs before that date is governed by the
325	325	law in effect on the date the conduct occurred, and the former law
326	326	is continued in effect for that purpose.
327	327	SECTION 31. This Act takes effect September 1, 2023.
328	328	______________________________ ______________________________
329	329	President of the Senate Speaker of the House
330	330	I certify that H.B. No. 4416 was passed by the House on May 6,
331	331	2023, by the following vote: Yeas 137, Nays 1, 1 present, not
332	332	voting.
333	333	______________________________
334	334	Chief Clerk of the House
335	335	I certify that H.B. No. 4416 was passed by the Senate on May
336	336	21, 2023, by the following vote: Yeas 29, Nays 2.
337	337	______________________________
338	338	Secretary of the Senate
339	339	APPROVED: _____________________
340	340	Date
341	341	_____________________
342	342	Governor