BILL NUMBER: SB 109 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Calderon
JANUARY 28, 2009
An act to amend Sections 1812.601 and 1812.607 of the Civil Code,
relating to auctioneers.
LEGISLATIVE COUNSEL'S DIGEST
SB 109, as introduced, Calderon. Auctioneers: real estate.
(1) Existing law regulates the activities of auctioneers and
auction companies and requires that they maintain a bond issued by a
surety company admitted in this state or an equivalent deposit.
Existing law defines auction in this regard and excepts from this
definition a sale of real estate or a sale of real estate with
personal property or fixtures or both in a unified sale, as
specified. Existing law requires auctioneers and auction companies to
post or distribute to the audience the terms, conditions,
restrictions, and procedures under which goods will be sold at the
auction. A violation of certain of these provisions is punishable by
specified fines, and a violation of these provisions generally is a
misdemeanor.
This bill would remove the exception provided for real estate from
the definition of auction for the purposes described above, thereby
bringing real property auctions within those provisions. The bill
would require an auction company and auctioneer to post or distribute
to the audience a description of all fees, both refundable and
nonrefundable, that will be levied on bidders, as well as any changes
to those fees. With respect to auctions of real property, the bill
would require an auction company and auctioneer to post or distribute
to the audience a description of the reserve bid, or to inform the
audience that there is not a reserve bid, prior to the beginning of
the auction sale. The bill would require an auction company and
auctioneer to return a refundable deposit paid by a bidder at an
auction of real property, if the bidder fails to win the auction for
the property, within 2 working days. By changing the definition of a
crime, the bill would impose a state-mandated local program.
(2) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1812.601 of the Civil Code is amended to read:
1812.601. (a) "Advertisement" means any of the following:
(1) Any written or printed communication for the purpose of
soliciting, describing, or offering to act as an auctioneer or
provide auction company services, including any brochure, pamphlet,
newspaper, periodical, or publication.
(2) A telephone or other directory listing caused or permitted by
an auctioneer or auction company to be published that indicates the
offer to practice auctioneering or auction company services.
(3) A radio, television, or similar airwave transmission that
solicits or offers the practice of auctioneering or auction company
services.
(b) "Auction" means a sale transaction conducted by means of oral
or written exchanges, which include exchanges made in person or
through electronic media, between an auctioneer and the members of
his or her audience, which exchanges consist of a series of
invitations for offers for the purchase of goods made by the
auctioneer and offers to purchase made by members of the audience and
culminate in the acceptance by the auctioneer of the highest or most
favorable offer made by a member of the participating audience.
However, auction does not include either of the following:
(1) A
a wholesale motor vehicle auction subject to
regulation by the Department of Motor Vehicles.
(2) A sale of real estate or a sale in any sequence of real estate
with personal property or fixtures or both in a unified sale
pursuant to subparagraph (B) of paragraph (1) of subdivision (a) of
Section 9604 of the Commercial Code.
(c) "Auction company" means any person who arranges, manages,
sponsors, advertises, accounts for the proceeds of, or carries out
auction sales at locations, including, but not limited to, any fixed
location, including an auction barn, gallery place of business, sale
barn, sale yard, sale pavilion, and the contiguous surroundings of
each.
(d) "Auctioneer" means any individual who is engaged in, or who by
advertising or otherwise holds himself or herself out as being
available to engage in, the calling for, the recognition of, and the
acceptance of, offers for the purchase of goods at an auction.
(e) "Employee" means an individual who works for an employer, is
listed on the employer's payroll records, and is under the employer's
control.
(f) "Employer" means a person who employs an individual for wages
or salary, lists the individual on the person's payroll records, and
withholds legally required deductions and contributions.
(g) "Goods" means any goods, wares, chattels, merchandise, or
other personal property, including domestic animals and farm
products.
(h) "Person" means an individual, corporation, partnership, trust,
including a business trust, firm, association, organization, or any
other form of business enterprise.
SEC. 2. Section 1812.607 of the Civil Code is amended to read:
1812.607. Every auction company and auctioneer shall do all of
the following:
(a) Disclose his or her name, trade or business name, telephone
number, and bond number in all advertising of auctions. A first
violation of this subdivision is an infraction subject to a fine of
fifty dollars ($50); a second violation is subject to a fine of
seventy-five dollars ($75); and a third or subsequent violation is
subject to a fine of one hundred dollars ($100). This section shall
not apply to business cards, business stationery, or to any
advertisement that does not specify an auction date.
(b) Post a sign, the dimensions of which shall be at least 18
inches by 24 inches, at the main entrance to each auction, stating
that the auction is being conducted in compliance with Section 2328
of the Commercial Code, Section 535 of the Penal Code, and the
provisions of the California Civil Code. A first violation of this
subdivision is an infraction subject to a fine of fifty dollars
($50); a second violation is subject to a fine of seventy-five
dollars ($75); and a third or subsequent violation is subject to a
fine of one hundred dollars ($100).
(c) Post or distribute to the audience the terms, conditions,
restrictions, and procedures whereby goods will be sold at the
auction, and a description of all fees, both refundable and
nonrefundable, that will be levied on bidders, and announce any
changes to those terms, conditions, restrictions, and
procedures , and fees prior to the
beginning of the auction sale. A first violation of this subdivision
is an infraction subject to a fine of fifty dollars ($50); a second
violation is subject to a fine of one hundred dollars ($100); and a
third or subsequent violation is subject to a fine of two hundred
fifty dollars ($250).
(d) With respect to auctions of real property, post or distribute
to the audience a description of the reserve bid, or inform the
audience that no reserve is to be applied, prior to the beginning of
the auction sale.
(d)
(e) Notify the Secretary of State of any change in
address of record within 30 days of the change. A violation of this
subdivision is an infraction subject to a fine of fifty dollars
($50).
(e)
(f) Notify the Secretary of State of any change in the
officers of a corporate license within 30 days of the change. A
violation of this subdivision is an infraction subject to a fine of
fifty dollars ($50).
(f)
(g) Notify the Secretary of State of any change in the
business or trade name of the auctioneer or auction company within 30
days of the change. A violation of this subdivision is an infraction
subject to a fine of fifty dollars ($50).
(g)
(h) Keep and maintain, at the auctioneer's or auction
company's address of record, complete and correct records and
accounts pertaining to the auctioneer's or auction company's activity
for a period of not less than two years. The records shall include
the name and address of the owner or consignor and of any buyer of
goods at any auction sale engaged in or conducted by the auctioneer
or auction company, a description of the goods, the terms and
conditions of the acceptance and sale of the goods, all written
contracts with owners and consignors, and accounts of all moneys
received and paid out, whether on the auctioneer's or auction company'
s own behalf or as agent, as a result of those activities. A first
violation of this subdivision is a misdemeanor subject to a fine of
five hundred dollars ($500); and a second or subsequent violation is
subject to a fine of one thousand dollars ($1,000).
(h)
(i) Within 30 working days after the sale transaction,
provide, or cause to be provided, an account to the owner or
consignor of all goods that are the subject of an auction engaged in
or conducted by the auctioneer or auction company. A first violation
of this subdivision is a misdemeanor subject to a fine of five
hundred dollars ($500); and a second or subsequent violation is
subject to a fine of one thousand dollars ($1,000).
(i)
(j) Within 30 working days after a sale transaction of
goods, pay or cause to be paid all moneys and proceeds due to the
owner or the consignor of all goods that were the subject of an
auction engaged in or conducted by the auctioneer or auction company,
unless delay is compelled by legal proceedings or the inability of
the auctioneer or auction company, through no fault of his or her
own, to transfer title to the goods or to comply with any provision
of this chapter, the Commercial Code, or the Code of Civil Procedure,
or with any other applicable provision of law. A first violation of
this subdivision is a misdemeanor subject to a fine of one thousand
dollars ($1,000); a second violation is subject to a fine of one
thousand five hundred dollars ($1,500); and a third or subsequent
violation is subject to a fine of two thousand dollars ($2,000).
(j)
(k) Maintain the funds of all owners, consignors,
buyers, and other clients and customers separate from his or her
personal funds and accounts. A violation of this subdivision is an
infraction subject to a fine of two hundred fifty dollars ($250).
(k)
(l) Immediately prior to offering any item for sale,
disclose to the audience the existence and amount of any liens or
other encumbrances on the item, unless the item is sold as free and
clear. For the purposes of this subdivision, an item is "free and
clear" if all liens and encumbrances on the item are to be paid prior
to the transfer of title. A violation of this subdivision is an
infraction subject to a fine of two hundred fifty dollars ($250) in
addition to the requirement that the buyer be refunded, upon demand,
the amount paid for any item that is the subject of the violation.
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(m) Within two working days after an auction
sale, return the blank check or deposit of each buyer who purchased
no goods at the sale , or return a refundable deposit paid by a
bidder at an auction of real property, if the bidder fails to win the
auction for the property . A first violation of this
subdivision is an infraction subject to a fine of one hundred dollars
($100); and a second or subsequent violation is subject to a fine of
two hundred fifty dollars ($250).
(m)
(n) Within 30 working days of any auction sale, refund
that portion of the deposit of each buyer that exceeds the cost of
the goods purchased, unless delay is compelled by legal proceedings
or the inability of the auctioneer or auction company, through no
fault of his or her own, to transfer title to the goods or to comply
with any provision of this chapter, the Commercial Code, or the Code
of Civil Procedure, or with other applicable provisions of law, or
unless the buyer violated the terms of a written agreement that he or
she take possession of purchased goods within a specified period of
time. A first violation of this subdivision is an infraction subject
to a fine of one hundred dollars ($100); and a second or subsequent
violation is subject to a fine of two hundred fifty dollars ($250).
SEC. 3. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.