July 1, 2010, Introduced by Senator ALLEN and referred to the Committee on Commerce and Tourism.
A bill to amend 1980 PA 299, entitled
"Occupational code,"
by amending sections 2909, 2911, and 2913 (MCL 339.2909, 339.2911,
and 339.2913), as added by 2006 PA 489.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 2909. (1) Notwithstanding section 2907, the department
shall register as an auctioneer, after verification of the
experience requirements imposed in this section, an individual who
applies
not more than 2 years after the effective date of this
article
and submits to the department a completed application and
an affidavit attesting to having had experience in the conduct of
auctions
for not less than 3 years before the effective date of
this
article October 1, 2007.
(2) The department shall issue a registration under this
section only if the applicant's experience includes conducting 12
or more auctions.
Sec. 2911. (1) Money paid by any person to a registrant in
connection with an auction under this article is considered to be
held in trust for the benefit of the person making the payment and
the registrant is considered the trustee for the money.
(2) A registrant shall provide to a client a full accounting
upon the closing or termination of any transaction, including any
money given to the registrant for presale auction services.
Sec. 2913. (1) A registered auctioneer shall maintain a
regular place of business in this state. If more than 1 place of
business is maintained, the department shall issue a duplicate
registration at no additional cost. A regular place of business
does not include a location used only as a warehouse. Records
required to be kept under this article shall be kept at that
regular place of business.
(2) A registered auctioneer shall not conduct an auction
unless a written contract is executed between the person desiring
auction services and the registered auctioneer. A registrant shall
provide a copy of the contract to the client, keep a copy of the
contract as part of his or her records, and, upon request, make
them available to the department for inspection or audit, or both,
during normal business hours.
(3) A registrant under this article shall conspicuously post
at the regular place of business a copy of the registration issued
under this article.
(4) A registrant under this article shall establish a trust
account, or other segregated type of account, in the manner
described in this section. The registrant shall deposit into the
trust account all checks, drafts, negotiable instruments, and cash
tendered by 1 or more buyers for the payment of an item sold by
auction. The registrant shall make a disbursement relative to a
sale by auction through that trust account in the time period and
manner described in this section.
(5)
A registrant shall not permit an advance payment of money
by a customer to be deposited in the registrant's business or
personal account or to be commingled in any way with funds
belonging to the registrant, except as provided in this section.
The
registrant shall deposit customer money into a the trust
account until the transaction involved is consummated or
terminated, within 2 banking days after the auction transaction but
not
later than 5 days after its receipt of the money.
(6) Money given to an auctioneer by a client or other person
for presale auction services is not required to be placed in the
trust account. However, an auctioneer shall provide a complete
accounting of all auction service expenses to the client or other
person at the closing or termination of the transaction.
(7) (6)
The trust account is subject to the
following
requirements:
(a) May be an interest bearing account maintained in a
depository recognized by the department. Interest accrued shall be
allocated as provided for in the contract between the parties.
(b) Shall designate the registrant as the trustee or
custodian.
(c) Shall provide for withdrawal of money without previous
notice and shall not be encumbered in any manner.
(d) Shall not contain any money of the registrant except for
an amount sufficient to pay service charges on the account or to
maintain the account when customer money is not on deposit, that
amount not to exceed $500.00.
(8) (7)
Disbursements from the trust
account shall be made
only for the following purposes:
(a) Payment as a result of the sale of an item by the
registrant pursuant to the contract.
(b) Refund of an amount to the customer upon termination of
the transaction.
(c) Payment to the registrant of a commission and documented
and approved expenses following the consummation of a transaction
upon which a commission is payable to the registrant.
(9) (8)
The registrant shall keep records
of money deposited
in the trust account. The records shall show all of the following:
(a) The date of the receipt of money from a customer, the
amount received, and the name of the customer on whose behalf the
money was paid.
(b) The purpose for which the money was paid.
(c) The date the money was deposited in the trust account.
(d) The date of disbursement of the money, the purpose of the
withdrawal, and the name of the person to whom the money was paid
upon disbursement.
(e) Any other pertinent information regarding the transaction.
(10) (9)
The department and the board may,
upon notice given
to a registrant, inspect or audit, or both, the records or other
relevant documents required to be kept pursuant to this section.
(11) (10)
A registrant shall create,
electronically or
otherwise, a cash receipts and disbursements journal and ledgers.
The ledgers are to be maintained separately for each transaction
and shall contain the following:
(a) Names of both parties.
(b) Postings of all transactions.
(c) Date of each transaction, in chronological sequence.
(d) Amount received or disbursed, or both; name of party
giving money; name of principal or payee; and purpose of
disbursements.
(e) Check numbers of disbursements.
(f) A running balance after each receipt and disbursement.
(g) Description of property being sold.
(12) (11)
A registrant shall create,
electronically or
otherwise, and maintain a personal money ledger to account for
personal money maintained in the trust account. The personal money
ledger shall include the following:
(a) Chronological sequence of funds received and disbursed.
(b) Running balance after each receipt and disbursement.
(c) Receipt postings to include date of receipt, date of
deposit, name of party giving money, name of principal, and amount
received.
(d) Disbursement postings to include the date; check number,
if applicable; payee; amount; purpose; and a running balance after
each receipt and disbursement.
(13) (12)
The ledgers and journals, as well
as trust account
bank statements, deposit tickets, and copies of deposit receipts,
canceled checks, and voided checks shall be maintained for not less
than 3 years from the date of inception of the records or not less
than 3 years from the consummation or termination of the
transaction, whichever is later.
(14) (13)
A registrant under this article
shall maintain
written records of each auction sale, including presale auction
services, for a period of not less than 3 years from the date of
the auction sale or not less than 3 years from consummation or
termination of the transaction, whichever is later. The records
shall include, but not be limited to, all of the following:
(a) Consignment receipts.
(b) Bidder registrations.
(c) Documents relating to presale auction services.
(d) (c)
Documents relating to final
settlements with
consignors.