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This is my ninth “aberrant auction law” find, and numbered as such. When I find more, I’ll attempt to number sequentially, although I hope my searching is generally unsuccessful.

Aberrant auction law refers to auctioneer licensing law (or other auction related law) that is abnormal, odd, bizarre, or otherwise unusual. The basis for determining if an auction law is aberrant is all the other auction law that is out there, which collectively is widely considered normal.

For decades, the State of Ohio did not exempt charities or other 501(c)(3) organizations from using a licensed auctioneer for their fund raising auctions. Then, Sub HB 48 was signed by Governor Strickland on June 12, 2008 and went into effect on September 12, 2008.

This new law allowed non-licensed individuals to act as auctioneers for certain organizations, so long as several other provisions of the new law were met. The State of Ohio issued this summary of the new law soon after it was signed by Governor Strickland:

Key Provisions of Sub HB 48:

R.C. 4707.02(B)(5)(b):

    ♦ Provides exemption from the license requirement for auctions sponsored by a charitable, religious or civic organization that is tax exempt under 501(c)(3) of the Internal Revenue Code or auctions by a public school, charter nonpublic school, or community school;
    ♦ No person can receive compensation for the organizing, arranging, or conducting of the auction;
    ♦ No consignors of the property consigned to the auction can receive compensation from the proceeds of the auction. This means all of proceeds of the goods sold must go to directly to the charity or nonprofit;
    ♦ Compensation is defined as “money, a thing of value other than participation in a charitable event, or a financial benefit”;
    ♦ This provision exempts the non-profit organization or school from having to be licensed or use a licensed auctioneer.
    ♦ If anyone receives compensation for organizing, arranging or conducting the auction, they must be licensed.

R.C. 4707.02(C):

    ♦ No person shall advertise or hold oneself out as an auction firm, auctioneer, apprentice auctioneer, or special auctioneer without a license under R.C. 4707;
    ♦ This provision does not apply to the individual who is the subject of the ad of an auction conducted under R.C. 4707.02(B)(5)(b). The person who places the ad would be held accountable.

R.C. 4707.20(A)

    ♦ Any licensee who donates his or her time to conduct a charity auction for a 501(c)(3) or for a school is exempt from having to comply with the contract requirements. This only applies when the auctioneer is donating his or her services. If you are receiving compensation, then you must comply with all provisions of the chapter, including the contract requirement.

R.C. 4707.21

    ♦ All organizations who are exempt under R.C. 4707.02(B)(5)(b) are required to maintain the auction records for a period of two years and must make them available to the department upon request.

R.C. 4707.26(A)(2)(d)

    ♦ Exempts auctions conducted under R.C. 4707.02(B)(5)(b) from the auction recovery fund.

In other words, this new law (as of September 12, 2008):

  • Exempts certain organizations from using a licensed auctioneer, but keeps them under the jurisdiction of the State of Ohio in regard to mandatory record-keeping?
  • The exempt organization can only sell items they own in entirety? However, if someone put an item in the auction on consignment, the organization would not be exempt?
  • The “auctioneer” for the exempt auction cannot hold themselves out as an auctioneer, and that auctioneer, or whomever places an advertisement noting such, if other than the “auctioneer,” could be disciplined by the State of Ohio?
  • Nobody can receive any compensation, of any kind, in regard to the auction? So, if the organization desired to pay someone to send out advertisements for the auction, then the auction would not be exempt? If you pay Sally to arrange the auction in some regard, then the organization must use a licensed auctioneer, even when Sally isn’t the auctioneer?

Recently, we wrote about charity auctions, and associated licensing, noting that it may be to the charity’s detriment to use a non-licensed individual: Why not a licensed auctioneer for a charity auction?

We would suggest this is, at best, a poorly written and confusing law which didn’t need to be written at all. We find Ohio’s H.B. 48 and associated changes to R.C. 4707 aberrant.

Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, Keller Williams Auctions and Goodwill Columbus Car Auction. His Facebook page is: www.facebook.com/mbauctioneer. He is Executive Director of The Ohio Auction School.