senate Bill S551A

Specifies auction requirements

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 05 / Jan / 2011
    • REFERRED TO CONSUMER PROTECTION
  • 05 / Apr / 2011
    • NOTICE OF COMMITTEE CONSIDERATION - REQUESTED
  • 21 / Jun / 2011
    • AMEND AND RECOMMIT TO CONSUMER PROTECTION
  • 21 / Jun / 2011
    • PRINT NUMBER 551A
  • 04 / Jan / 2012
    • REFERRED TO CONSUMER PROTECTION

Summary

Specifies requirements for auctions; holds the auctioneer responsible for truth of statements in catalogues, announcements, etc.

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Bill Details

See Assembly Version of this Bill:
A4756A
Versions:
S551
S551A
Legislative Cycle:
2011-2012
Current Committee:
Senate Consumer Protection
Law Section:
General Business Law
Laws Affected:
Add §29, amd §23, Gen Bus L
Versions Introduced in Previous Legislative Cycles:
2009-2010: S4313D
2007-2008: A2442A

Sponsor Memo

BILL NUMBER:S551A

TITLE OF BILL:
An act
to amend the general business law, in relation to auction
requirements

PURPOSE:
To increase transparency and disclosure in the auction process beyond
the borders of New York City.

SUMMARY OF PROVISIONS:
The bill requires that an auctioneer be held responsible -- to the
extent practicable -- for making a good faith effort to ensure the
accuracy of statements contained in any catalogue, as of the date of
the catalogue's initial publication.

* The consignor must show that he or she has complete and lawful
right, title, and interest in property being auctioned.

* It must be disclosed if an auctioneer or auction house has any
interest in an article being auctioned.

* The existence of a "reserve price" must be disclosed to the audience.

* It must be disclosed if an auctioneer extends a loan to a purchaser.

* Detailed information must be provided about any jewelry being sold.

* Each auction sale must be advertised at least once in the seven days
preceding the auction.

* Prospective purchasers must be allowed to inspect articles for sale.

* Checks must be sent to anyone entitled to proceeds of a sale within
14 Days, unless a written agreement stating otherwise has been
established.

* Except to implement the reserve price no auctioneer, consignor etc.
shall make a bid unless their status as someone with inside
information has been disclosed.

* If the reserve price is not bid, the auctioneer may withdraw a lot
from sale.

* An auctioneer may not offer more than one article for sale at any
time unless combining of articles/lots is indicated prior to the
initial bid.

* An auctioneer may not offer an article contained in a carton or
package unless it is announced that the bidder can reject the item
upon opening such package.

The following types of auctions are exempt from the provisions of this
bill: livestock, thoroughbreds, highway equipment, automobiles, and
self-storage spaces.


The provisions of this bill will be enforced by the Attorney General's
office.

EXISTING LAW:
State law does not currently regulate the use of manipulative bids and
practices by auction houses.

JUSTIFICATION:
The genesis of this legislation was an 18-month investigation by
Assembly Member Richard Brodsky into art market practices, followed
by a hearing and many meetings with art market participants.

During the investigation, it came to light that auction houses had
periodically engaged in deceptive practices as a means of obtaining
bids that would meet and/or exceed the reserve price. Witnesses
testified that these practices served to undermine confidence in the
art market, and that such bids should be prohibited. This bill does
exactly that. In addition, testimony suggested that prices were
sometimes artificially inflated, in part due to a lack of
transparency, which served to distort the market and disrupt
operation of a vibrant, healthy and profitable marketplace. This bill
addresses those concerns.

By expanding several aspects of the successful auction regulation
program that exists in New York city to many counties in the rest of
the state, this bill will help ensure that there are no easy
loopholes to avoid the stricter rules that currently apply only in
New York City.

LEGISLATIVE HISTORY:
2009-10: S.4313D (Squadron) - Passed Senate
A.1730D (Brodsky) - Passed Assembly
2007-08: A.2442 - Passed Assembly
2005-06: A.3514
2003-04: A.1254
2001-02: A.1317
1999-00: A.3847
1997-98: A.536
1995-96: A.284
1993-94: A.1249

FISCAL IMPLICATIONS:
None.

LOCAL FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
This bill will take effect on the sixtieth day after it becomes a law.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 551--A

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 5, 2011
                               ___________

Introduced  by  Sens.  SQUADRON,  DILAN,  HASSELL-THOMPSON, OPPENHEIMER,
  PERKINS, STAVISKY -- read twice and ordered printed, and when  printed
  to  be  committed to the Committee on Consumer Protection -- committee
  discharged, bill amended, ordered reprinted as amended and recommitted
  to said committee

AN ACT to amend  the  general  business  law,  in  relation  to  auction
  requirements

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Legislative  intent.  The  legislature  declares  that  the
following  provisions  of law are in addition to other provisions of law
and regulations applicable to auctions.
  S 2. The general business law is amended by adding a new section 29 to
read as follows:
  S 29. REQUIREMENTS FOR AUCTIONS. 1.    THE  AUCTIONEER  WILL  BE  HELD
RESPONSIBLE  FOR  THE TRUTH OF ANY STATEMENT CONTAINED IN ANY CATALOGUE,
ADVERTISEMENT, ANNOUNCEMENT, PRESS RELEASE  OR  OTHER  PUBLIC  STATEMENT
MADE BY THE AUCTIONEER RELATING TO ANY AUCTION.
  2. A. NO PERSONAL PROPERTY MAY BE AUCTIONED EXCEPT PURSUANT TO A WRIT-
TEN  CONTRACT  BETWEEN  THE  CONSIGNOR OR HIS OR HER AGENT OR AUTHORIZED
REPRESENTATIVE AND THE AUCTIONEER, UNLESS AUCTIONED PURSUANT TO AN ORDER
OF A COURT OF COMPETENT JURISDICTION.
  B. EVERY CONTRACT REQUIRED PURSUANT TO PARAGRAPH A OF THIS SUBDIVISION
MUST CONTAIN THE FOLLOWING PROVISIONS:
  (I) ALL FEES, COMMISSIONS AND CHARGES TO BE PAID BY THE  CONSIGNOR  TO
THE AUCTIONEER OR HIS OR HER AGENTS, PRINCIPALS, EMPLOYEES, EMPLOYERS OR
ASSIGNS SHALL:
  (1)  TO THE EXTENT PRACTICABLE, BE ITEMIZED AND SPECIFIED AS TO AMOUNT
(WHICH MAY BE STATED AS A PERCENTAGE OF THE RESERVE PRICE OR  ANY  FINAL
BID), AND

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD01437-04-1

S. 551--A                           2

  (2)  IF SUCH ITEMIZATION AND SPECIFICATION AS TO AMOUNT IS NOT PRACTI-
CABLE, BE DESCRIBED WITH SUFFICIENT PARTICULARITY TO INFORM THE  CONSIG-
NOR  OF  THE NATURE OF THE SERVICES FOR WHICH SUCH FEES, COMMISSIONS AND
CHARGES WILL BE IMPOSED.
  (II) THAT AS OF THE DATE OF THE AUCTION THE CONSIGNOR WARRANTS THAT HE
OR SHE HAS COMPLETE AND LAWFUL RIGHT, TITLE AND INTEREST IN THE PROPERTY
AUCTIONED, AND THAT THE CONSIGNOR SHALL INDEMNIFY THE AUCTIONEER, HIS OR
HER  AGENTS, PRINCIPALS, EMPLOYEES, EMPLOYERS OR ASSIGNS IN THE EVENT OF
ANY DEFECT IN TITLE, AND THAT AN INTENDED BENEFICIARY OF  THIS  WARRANTY
IS THE ULTIMATE PURCHASER AT AUCTION.
  C.  WHERE  ARTICLES  ARE  REFERRED TO BY CATALOGUE OR ADVERTISEMENT AS
HAVING BEEN OBTAINED FROM ANY SPECIFIC PERSON,  PLACE  OR  SOURCE,  SUCH
ARTICLES MUST BE SEPARATELY ENUMERATED AND IDENTIFIED.
  D. IF AN AUCTIONEER OR AUCTION HOUSE HAS ANY INTEREST, DIRECT OR INDI-
RECT,  IN  AN  ARTICLE,  INCLUDING  A GUARANTEED MINIMUM, OTHER THAN THE
SELLING COMMISSION, THE FACT SUCH INTEREST EXISTS MUST BE  DISCLOSED  IN
CONNECTION  WITH ANY DESCRIPTION OF THE ARTICLE OR ARTICLES IN THE CATA-
LOGUE OR ANY OTHER PRINTED MATERIAL PUBLISHED OR DISTRIBUTED IN RELATION
TO THE SALE. SUCH NOTICE MAY BE DENOTED BY A PROMINENT SYMBOL OR  LETTER
WHICH  WILL  REFER  THE  READER  TO  AN EXPLANATION OF THE NATURE OF THE
INTEREST THE SYMBOL  OR  LETTER  DENOTES.  IN  ADDITION,  PRIOR  TO  THE
COMMENCEMENT  OF  THE AUCTION, THE AUCTIONEER SHALL ORALLY ANNOUNCE THAT
THOSE LOTS IN WHICH THE AUCTIONEER  HAS  AN  INTEREST  COVERED  BY  THIS
SUBDIVISION HAVE BEEN DESIGNATED IN THE AUCTION CATALOGUE AND THE SYMBOL
USED TO DENOTE SUCH INTEREST.
  E.  WHERE A CONSIGNOR IS TO RECEIVE A REBATE COMMISSION IN WHOLE OR IN
PART, OR WHERE HE OR SHE WILL BE PERMITTED TO BID UPON AND TO  BUY  BACK
HIS  OR HER OWN ARTICLE AT THE SALE, DISCLOSURE OF SUCH A CONDITION MUST
BE MADE IN CONNECTION WITH ANY DESCRIPTION  OF  THE  ITEM  OR  ITEMS  SO
AFFECTED  IN  THE  CATALOGUE  OR ANY OTHER PRINTED MATERIAL PUBLISHED OR
DISTRIBUTED IN RELATION TO THE SALE. THE EXISTENCE OF SUCH  A  CONDITION
MAY  BE  DENOTED BY A SYMBOL OR LETTER WHICH WILL REFER THE READER TO AN
EXPLANATION OF THE NATURE OF THE INTEREST THE SYMBOL OR LETTER DENOTES.
  F. (I) IF THE CONSIGNOR HAS FIXED A PRICE BELOW WHICH AN ARTICLE  WILL
NOT  BE  SOLD,  THE "RESERVE PRICE", THE FACT THAT THE LOT IS BEING SOLD
SUBJECT TO RESERVE MUST BE DISCLOSED IN CONNECTION WITH THE  DESCRIPTION
OF  ANY  LOT  SO AFFECTED IN THE CATALOGUE OR ANY OTHER PRINTED MATERIAL
PUBLISHED OR DISTRIBUTED IN RELATION TO THE SALE.  THE  EXISTENCE  OF  A
RESERVE  PRICE MAY BE DENOTED BY A SYMBOL OR LETTER WHICH WILL REFER THE
READER TO AN EXPLANATION OF RESERVE PRICE. FOR THE PURPOSE OF THIS PARA-
GRAPH AND PARAGRAPHS D AND E  OF  THIS  SUBDIVISION,  ADVERTISEMENTS  IN
NEWSPAPERS  OR  OTHER PERIODICALS SHALL NOT CONSTITUTE PRINTED MATERIAL.
WHERE NO PRINTED MATERIAL IS PROVIDED IN CONNECTION WITH THE AUCTION  AN
AUCTIONEER  SHALL HAVE AVAILABLE DURING ANY ADVERTISED INSPECTION PERIOD
INFORMATION AS TO WHETHER A PARTICULAR LOT IS  TO  BE  SOLD  SUBJECT  TO
RESERVE  AND  SHALL ANNOUNCE BEFORE HE OR SHE COMMENCES THE AUCTION THAT
SUCH INFORMATION IS AVAILABLE UPON REQUEST.
  (II) WHEN A LOT IS NOT SUBJECT TO  A  RESERVE  PRICE,  THE  AUCTIONEER
SHALL  NOT  INDICATE  IN ANY MANNER THAT THE LOT IS SUBJECT TO A RESERVE
PRICE.
  G. IN THE EVENT AN AUCTIONEER EXTENDS  A  LOAN  TO  A  PURCHASER,  THE
AUCTIONEER  SHALL DISCLOSE IN A GENERAL ANNOUNCEMENT AT THE COMMENCEMENT
OF THE AUCTION THAT BIDDERS MAY BE PARTICIPATING IN THE  SALE  WHO  HAVE
BEEN OFFERED A LOAN BY THE AUCTIONEER. IN ADDITION, THIS DISCLOSURE MUST
ALSO  BE  MADE ON SIGNS PROMINENTLY DISPLAYED IN THE AUCTION ROOM AND AT

S. 551--A                           3

THE ENTRANCE THERETO. SUCH SIGNS SHALL INCLUDE THE FOLLOWING DISCLOSURE,
OR CONVEY SUBSTANTIALLY THE SAME MESSAGE:
  "BIDDERS MAY BE PARTICIPATING IN THE SALE WHO HAVE BEEN OFFERED A LOAN
BY THE AUCTIONEER."
  H. THE AUCTIONEER SHALL:
  (I) PROVIDE INFORMATION AS TO THE NUMBER OF JEWELS, APPROXIMATE NUMBER
OF  CARATS,  NUMBER  OF  POINTS  (DIAMOND), PRINCIPAL METAL CONTENT, AND
MANUFACTURER'S NAME, IF KNOWN, FOR ALL ARTICLES  OF  JEWELRY,  INCLUDING
WATCHES.  THE  INFORMATION  REQUIRED BY THIS PARAGRAPH SHALL BE PROVIDED
EITHER IN THE CATALOGUE DESCRIPTIONS OF SUCH ITEMS OR  BY  ATTACHING  TO
EACH SUCH ITEM A TAG OR MARKING CONTAINING THE INFORMATION.
  (II)  ISSUE  OR  CAUSE TO BE ISSUED TO EACH PURCHASER AN INVOICE WHICH
SHALL CONTAIN ALL THE FOLLOWING INFORMATION:
  (1) THE AUCTIONEER'S NAME, BUSINESS ADDRESS AND LICENSE NUMBER;
  (2) THE NAME AND ADDRESS OF THE AUCTIONEER'S EMPLOYER OR PRINCIPAL;
  (3) THE DATE OF SALE;
  (4) THE LOT NUMBER, DESCRIPTION, QUANTITY AND SELLING  PRICE  OF  EACH
LOT;
  (5)  THE  TOTAL  AMOUNT OF PURCHASE WITH A SEPARATE STATEMENT OF SALES
TAX;
  (6) ALL DEPOSITS MADE AGAINST THE PURCHASE PRICE.
  (III) ADVERTISE EACH AUCTION SALE AT LEAST ONCE IN THE SEVEN DAY PERI-
OD IMMEDIATELY PRECEDING THE AUCTION.
  (IV) NOTIFY THE PERSON WHOSE PROPERTY  IS  BEING  AUCTIONED  (AND  ANY
OTHER  PERSON  ENTITLED TO BE NOTIFIED ACCORDING TO LAW) AS TO THE DATE,
PLACE AND TIME OF SALE.
  (V) PERMIT (PRIOR TO THE START OF THE AUCTION) PROSPECTIVE  PURCHASERS
TO INSPECT EACH AND EVERY ARTICLE TO BE OFFERED FOR SALE.
  (VI)  FURNISH  TO  ANY  BUYER,  CONSIGNOR OR OWNER OF AN ARTICLE, UPON
REQUEST, INFORMATION AS TO THE WHEREABOUTS OF THAT  ARTICLE  THAT  COMES
INTO HIS OR HER POSSESSION OR THAT IS SOLD OR OFFERED FOR SALE BY HIM OR
HER.
  (VII)  SEND CHECKS FOR THE NET AMOUNT RECEIVED ON ALL SALES TO PERSONS
ENTITLED TO THE PROCEEDS THEREOF WITHIN FOURTEEN DAYS OF  DATE  OF  SALE
(EXCEPT  AS  OTHERWISE  AGREED  IN WRITING OR OTHERWISE PROVIDED BY LAW)
TOGETHER WITH A COMPLETE DETAILED STATEMENT INCLUDING LOT NUMBER,  QUAN-
TITY,  DESCRIPTION  AND SELLING PRICE OF EACH LOT; TOTAL AMOUNT RECEIVED
ON SALE; AND DISBURSEMENTS LISTING COMMISSION,  COST  OF  ADVERTISEMENT,
LABOR, CHARGES AND ALLOWANCES, AND SUNDRY EXPENSES.
  (VIII) WHEN AN AUCTIONEER HAS A NUMBER OF THE SAME KIND OF ARTICLES TO
BE  SOLD  AND  INTENDS TO DISPOSE OF EACH OF THEM AT THE AMOUNT AT WHICH
THE FIRST IS SOLD, HE OR SHE SHALL MAKE AN ANNOUNCEMENT TO  THAT  EFFECT
PRIOR TO OPENING THE SALE OF THE FIRST ARTICLE.
  I.  IF  AN  AUCTIONEER  MAKES LOANS OR ADVANCES MONEY TO CONSIGNORS OR
PROSPECTIVE PURCHASERS, THIS FACT MUST BE CONSPICUOUSLY DISCLOSED IN THE
AUCTIONEER'S CATALOGUE OR PRINTED MATERIAL. IF THE AUCTIONEER  DOES  NOT
PROVIDE  ANY SUCH PRINTED MATERIAL, HE OR SHE SHALL MAKE THE DISCLOSURE,
EITHER BY CONSPICUOUSLY POSTING A SIGN, OR IN ANOTHER SIMILARLY CONSPIC-
UOUS MANNER, AT THE TIME OF ANY ADVERTISED INSPECTION PERIODS  PRIOR  TO
THE  AUCTIONS. FOR THE PURPOSE OF THIS PARAGRAPH ADVERTISEMENTS IN NEWS-
PAPERS OR OTHER PERIODICALS SHALL NOT CONSTITUTE PRINTED MATERIAL.
  J. EXCEPT TO IMPLEMENT A RESERVE PRICE, AND SUBJECT  TO  THE  REQUIRE-
MENTS  OF  PARAGRAPH  B OF SUBDIVISION THREE OF THIS SECTION, NO AUCTIO-
NEER, HIS OR HER CONSIGNOR, EMPLOYEE, EMPLOYER, ASSIGNEE  OR  AGENT  FOR
ANY  OF THEM MAY BID FOR HIS OR HER OWN ACCOUNT AT ANY AUCTION IF ANY OF
THEM SHALL HAVE ACCESS TO INFORMATION NOT  OTHERWISE  AVAILABLE  TO  THE

S. 551--A                           4

PUBLIC REGARDING RESERVES, VALUE OR OTHER MATERIAL FACTS RELATING TO THE
ARTICLES  WHICH ARE THE SUBJECT OF THE AUCTION, UNLESS THEIR STATUS AS A
PERSON WITH INSIDE INFORMATION AND INTENDED PARTICIPATION  IS  DISCLOSED
IN  THE  AUCTIONEER'S  CATALOGUE  AND  ANY PRINTED MATERIAL AND ON SIGNS
POSTED AT THE AUCTION.
  K. WHEREVER AN ESTIMATE OR ESTIMATED  VALUE  OF  AN  ITEM  OR  LOT  IS
PUBLISHED  IN  A  CATALOGUE  OR  ANY OTHER PRINTED MATERIAL PUBLISHED OR
DISTRIBUTED IN RELATION TO AN AUCTION SALE, A GENERAL DESCRIPTION OF THE
ESTIMATE AND ITS MEANING AND FUNCTION MUST BE INCLUDED IN  SUCH  PRINTED
MATERIAL.  FOR  THE PURPOSE OF THIS PARAGRAPH, ADVERTISEMENTS IN NEWSPA-
PERS OR OTHER PERIODICALS SHALL NOT CONSTITUTE PRINTED  MATERIAL.  WHERE
NO  PRINTED  MATERIAL IS PROVIDED, AND AN ESTIMATE OR ESTIMATED VALUE IS
ANNOUNCED OR DISSEMINATED IN ANY MANNER, A GENERAL  DESCRIPTION  OF  THE
ESTIMATE AND ITS MEANING AND FUNCTION MUST BE AVAILABLE FOR DISTRIBUTION
AND  ITS  AVAILABILITY  MUST  BE  ANNOUNCED  AT  THE COMMENCEMENT OF THE
AUCTION.
  L. IN ANY ADVERTISEMENT INDICATING AN AUCTION SALE DUE TO A  BUSINESS'
LOSS  OF  LEASE  OR LIQUIDATION, THE AUCTIONEER MUST INCLUDE THE NAME OF
THE CONSIGNOR OR BUSINESS AUTHORIZING THE AUCTION. IN  ANY  SALE  ADVER-
TISED  AS PURSUANT TO A SECURITY AGREEMENT, THE NAME OF THE DEBTOR SHALL
BE INDICATED CONSPICUOUSLY.
  3. A. IF THE RESERVE PRICE IS NOT BID, THE AUCTIONEER MAY  WITHDRAW  A
LOT  FROM  SALE.  AT  THE TIME OF SUCH WITHDRAWAL, AND BEFORE BIDDING ON
ANOTHER LOT BEGINS, THE AUCTIONEER SHALL ANNOUNCE THAT THE WITHDRAWN LOT
HAS BEEN "PASSED", "WITHDRAWN", "RETURNED TO OWNER" OR "BOUGHT-IN".
  B. BEFORE BIDDING ON ANY LOT HAS REACHED ITS RESERVE PRICE NO  AUCTIO-
NEER  MAY MAKE OR PLACE CONSECUTIVE OR SUCCESSIVE BIDS, OR PLACE BIDS IN
RESPONSE TO BIDS FROM OTHERS, ON BEHALF OF  THE  CONSIGNOR,  UNLESS  THE
FACT THAT THE AUCTIONEER WILL OR MAY BID IN SUCH A MANNER IS CLEARLY AND
CONSPICUOUSLY  DISCLOSED IN ANY CATALOGUE AND ANY OTHER PRINTED MATERIAL
PUBLISHED OR DISTRIBUTED IN CONNECTION WITH THE SALE. FOR  THE  PURPOSES
OF  THIS  PARAGRAPH  ADVERTISEMENTS  IN  NEWSPAPERS OR OTHER PERIODICALS
SHALL NOT CONSTITUTE PRINTED MATERIAL. THIS DISCLOSURE MUST ALSO BE MADE
ON SIGNS PROMINENTLY DISPLAYED IN THE AUCTION ROOM AND AT  THE  ENTRANCE
THERETO,  AND  MUST  BE ANNOUNCED BY THE AUCTIONEER IMMEDIATELY PRIOR TO
THE COMMENCEMENT OF ANY AUCTION.
  THE SIGN REQUIRED BY THIS PARAGRAPH MUST BE AT LEAST TWELVE INCHES  BY
EIGHTEEN  INCHES  IN  DIMENSION WITH LETTERS AT LEAST ONE INCH HIGH, AND
MUST READ AS FOLLOWS, OR CONVEY A SUBSTANTIALLY SIMILAR DISCLOSURE:
  THE AUCTIONEER MAY OPEN BIDDING ON ANY LOT BY PLACING A BID ON  BEHALF
OF  THE  SELLER. THE AUCTIONEER MAY FURTHER BID ON BEHALF OF THE SELLER,
UP TO THE AMOUNT OF THE RESERVE, BY PLACING  SUCCESSIVE  OR  CONSECUTIVE
BIDS FOR A LOT, OR BY PLACING BIDS IN RESPONSE TO OTHER BIDDERS.
  C. AFTER BIDDING HAS REACHED THE RESERVE PRICE OF A LOT:
  (I)  THE  AUCTIONEER  MAY  NOT  BID  ON BEHALF OF THE CONSIGNOR OR THE
AUCTION HOUSE; AND
  (II) THE AUCTIONEER MAY ONLY ACCEPT BIDS FROM PERSONS OTHER  THAN  THE
CONSIGNOR OR THE AUCTION HOUSE EXCEPT ABSENTEE TELEPHONE, ORDER OR OTHER
AGENT'S BIDS;
  (III) THIS PARAGRAPH SHALL NOT APPLY TO AUCTION SALES CONDUCTED PURSU-
ANT TO AN ORDER OF A COURT OF COMPETENT JURISDICTION, INCLUDING AN ORDER
OF A BANKRUPTCY JUDGE OR TRUSTEE, OR A SALE OF SECURED PROPERTY PURSUANT
TO THE UNIFORM COMMERCIAL CODE, OR THE SALE OF PROPERTY WHICH IS SUBJECT
TO A LIEN OR ASSIGNMENT PURSUANT TO THE LAWS OF THE STATE OF NEW YORK.

S. 551--A                           5

  D.  IN NO EVENT SHALL THE RESERVE PRICE FOR ANY LOT EXCEED THE MINIMUM
ESTIMATED VALUE OF THE LOT AS PUBLISHED IN ANY CATALOGUE OR OTHER PRINT-
ED MATERIAL DISTRIBUTED BY THE AUCTIONEER.
  4.  A.  AN  AUCTIONEER  MAY NOT DISCLAIM WARRANTY OF TITLE OF ANY ITEM
SOLD AT AUCTION. THE AUCTIONEER SHALL  REIMBURSE  ANY  PURCHASER  IN  AN
AMOUNT  EQUAL  TO THE SUCCESSFUL BID AT AUCTION PLUS ANY BUYER'S COMMIS-
SION PAID IN THE EVENT IT IS  DETERMINED  THAT  THE  PURCHASER  HAS  NOT
ACQUIRED TRANSFERABLE TITLE TO THE ITEM.
  B.  AT  THE AUCTION SALE PREMISES ONLY EXTERIOR SIGNS MAY BE DISPLAYED
ADVERTISING THE AUCTION SALE BUT THE SAME  SHALL  NOT  BE  EXCESSIVE  IN
SIZE.
  C. AN AUCTIONEER MAY NOT:
  (I)  OFFER  MORE  THAN ONE ARTICLE FOR SALE AT ANY ONE TIME UNLESS THE
COMBINING OF ARTICLES OR LOTS IS SO INDICATED PRIOR TO THE INITIAL BID.
  (II) REPRESENT AN ARTICLE TO BE GUARANTEED BY THE MANUFACTURER OR  THE
OWNER UNLESS A MANUFACTURER'S OR OWNER'S GUARANTEE ACCOMPANIES THE ARTI-
CLE.
  (III)  OFFER  AN  ARTICLE  CONTAINED  IN  A  CARTON,  PACKAGE OR OTHER
CONTAINER COMMONLY KNOWN AS A BLIND ARTICLE UNLESS PRIOR TO THE OFFER IT
IS ANNOUNCED THAT THE HIGHEST BIDDER  MAY  REJECT  THE  ARTICLE  IF  NOT
SATISFACTORY  TO HIM OR HER. THIS PROVISION DOES NOT REFER TO AN AUCTION
OF ARTICLES IN BULK WHERE A SAMPLE IS DISPLAYED AND BALANCE OF  ARTICLES
ARE REPRESENTED TO CONFORM TO THE SAMPLE.
  (IV) ACCEPT AS PAYMENT OR EXCHANGE ANY ARTICLE PREVIOUSLY KNOCKED DOWN
OR SOLD TO A SUCCESSFUL BIDDER. THE ARTICLE KNOCKED DOWN OR SOLD MUST BE
DELIVERED  TO  THE  BIDDER  OR,  IF THE AUCTIONEER IS WILLING AND AT THE
BIDDER'S ELECTION, THE PURCHASE PRICE REFUNDED IN FULL. NO OTHER ARTICLE
MAY BE OFFERED TO SAID BIDDER  AS  A  SUBSTITUTE  OR  REPLACEMENT.  SUCH
REFUND  SHALL  TAKE  PLACE WITHIN A REASONABLE TIME OR MAY BE APPLIED AS
PART PAYMENT OR PAYMENT FOR ANY OTHER ARTICLE PURCHASED  AT  AUCTION  BY
THE SAME BIDDER.
  5.  A.  UPON ANY VIOLATION OF THIS SECTION, AN APPLICATION MAY BE MADE
BY THE ATTORNEY GENERAL IN THE NAME OF THE PEOPLE OF THE  STATE  OF  NEW
YORK  TO  A COURT OR JUSTICE HAVING JURISDICTION TO ISSUE AN INJUNCTION,
AND UPON NOTICE TO THE DEFENDANT OF NOT LESS THAN FIVE DAYS,  TO  ENJOIN
AND RESTRAIN THE CONTINUANCE OF THE VIOLATION. IF IT SHALL APPEAR TO THE
SATISFACTION  OF  THE  COURT  OR JUSTICE THAT THE DEFENDANT HAS VIOLATED
THIS SECTION, AN INJUNCTION MAY BE  ISSUED  BY  THE  COURT  OR  JUSTICE,
ENJOINING AND RESTRAINING ANY FURTHER VIOLATION, WITHOUT REQUIRING PROOF
THAT  ANY  PERSON  HAS, IN FACT, BEEN INJURED OR DAMAGED THEREBY. IN ANY
SUCH PROCEEDING, THE COURT MAY MAKE ALLOWANCES TO THE  ATTORNEY  GENERAL
AS  PROVIDED IN PARAGRAPH SIX OF SUBDIVISION (A) OF SECTION EIGHTY-THREE
HUNDRED THREE OF THE CIVIL PRACTICE LAW AND RULES, AND  DIRECT  RESTITU-
TION.
  B.  WHENEVER  THE  COURT  SHALL  DETERMINE  THAT  A  VIOLATION  OF THE
PROVISIONS OF THIS SECTION HAS OCCURRED, IT MAY IMPOSE A  CIVIL  PENALTY
OF  NOT MORE THAN ONE THOUSAND DOLLARS FOR EACH VIOLATION. IN CONNECTION
WITH AN APPLICATION MADE UNDER THIS SUBDIVISION, THE ATTORNEY GENERAL IS
AUTHORIZED TO TAKE PROOF AND TO MAKE A  DETERMINATION  OF  THE  RELEVANT
FACTS  AND  TO ISSUE SUBPOENAS IN ACCORDANCE WITH THE CIVIL PRACTICE LAW
AND RULES.
  C. IN ADDITION TO THE RIGHT OF ACTION GRANTED TO THE ATTORNEY  GENERAL
PURSUANT  TO  PARAGRAPH  (A) OF THIS SUBDIVISION, ANY BUYER INJURED BY A
VIOLATION OF THE PROVISIONS OF THIS SECTION MAY BRING AN ACTION  IN  HIS
OWN  NAME  TO  ENJOIN  SUCH  UNLAWFUL PRACTICE, AN ACTION TO RECOVER HIS
ACTUAL DAMAGES OR FIVE HUNDRED DOLLARS, WHICHEVER IS  GREATER,  OR  BOTH

S. 551--A                           6

SUCH  ACTIONS.  THE  COURT  IN  ITS DISCRETION MAY INCREASE THE AWARD OF
DAMAGES TO AN AMOUNT NOT TO EXCEED THREE TIMES THE ACTUAL  DAMAGES.  THE
COURT  MAY  AWARD  COSTS  AND  REASONABLE ATTORNEYS FEES TO A PREVAILING
PLAINTIFF.
  6.  THE PROVISIONS OF THIS SECTION SHALL NOT BE APPLICABLE TO AUCTIONS
HELD AS PART OF A FUNDRAISING EVENT BY AN ENTITY CREATED FOR  CHARITABLE
PURPOSES  WITHIN  THE  MEANING  OF  PARAGRAPH FOUR OF SUBDIVISION (A) OF
SECTION ELEVEN HUNDRED SIXTEEN OF THE TAX LAW WHERE THE PROCEEDS OF SUCH
FUNDRAISING EVENT BENEFIT SUCH ORGANIZATION.
  7. NOTWITHSTANDING THE FOREGOING, AND  UNLESS  OTHERWISE  REQUIRED  BY
LAW,  IN ANY COUNTY WITH A POPULATION OF FORTY-FIVE THOUSAND OR LESS, NO
WRITTEN CONTRACT SHALL BE REQUIRED WHERE THE REASONABLY ESTIMATED  VALUE
OF  THE  PROPERTY  TO  BE  AUCTIONED  IS  LESS THAN ONE HUNDRED THOUSAND
DOLLARS.
  8. THE PROVISIONS OF THIS SECTION SHALL NOT BE APPLICABLE TO:
  A. MOTOR VEHICLE AUCTIONS CONDUCTED UNDER SECTION TWENTY-THREE OF THIS
ARTICLE AND THE VEHICLE AND TRAFFIC LAW;
  B. AUCTIONS OF POULTRY AND LIVESTOCK;
  C. AUCTIONS OF FARM SUPPLIES, FARM EQUIPMENT, AND FARM REAL ESTATE; OR
  D. AUCTION SALES CONDUCTED PURSUANT TO AN ORDER OF A COURT  OF  COMPE-
TENT  JURISDICTION, INCLUDING AN ORDER OF A BANKRUPTCY JUDGE OR TRUSTEE,
OR A SALE OF SECURED PROPERTY PURSUANT TO THE UNIFORM  COMMERCIAL  CODE,
OR  THE SALE OF PROPERTY WHICH IS SUBJECT TO A LIEN OR ASSIGNMENT PURSU-
ANT TO THE LAWS OF THE STATE OF NEW YORK.
  E. THE PROVISIONS OF SUBDIVISION ONE OF  THIS  SECTION,  SUBPARAGRAPHS
(I)  AND  (II)  OF PARAGRAPH F OF SUBDIVISION TWO OF THIS SECTION AND OF
PARAGRAPH A OF SUBDIVISION THREE OF THIS  SECTION  SHALL  NOT  APPLY  TO
AUCTIONS  OF  THOROUGHBRED  HORSES,  PROVIDED  THAT  THE RESULTS OF SUCH
AUCTION, INCLUDING WHETHER OR NOT A RESERVE PRICE WAS MET, ARE PUBLISHED
WITHIN TWENTY-FOUR HOURS.
  F. THE PROVISIONS OF THIS SECTION SHALL NOT APPLY TO AUCTIONS OF VEHI-
CLES OR HIGHWAY TOOLS, MACHINERY OR EQUIPMENT CONDUCTED BY OR ON  BEHALF
OF  THE FEDERAL GOVERNMENT, OR THE STATE, ITS AGENCIES, BUREAUS, BOARDS,
COMMISSIONS AND AUTHORITIES, OR ANY POLITICAL SUBDIVISION OF THE  STATE,
OR THE AGENCIES AND AUTHORITIES OF ANY SUCH SUBDIVISION.
  S  3.  Subdivision  3  of  section  23  of the general business law is
amended by adding a new paragraph f to read as follows:
  F. IN THE EVENT AN AUCTIONEER, AUCTION OR AFFILIATE OFFERS FLOOR  PLAN
FINANCING  OR  EXTENDS  A  LOAN  TO  A  PURCHASER,  THE AUCTIONEER SHALL
DISCLOSE IN A GENERAL ANNOUNCEMENT AT THE COMMENCEMENT  OF  THE  AUCTION
THAT  BIDDERS  MAY  BE  PARTICIPATING  IN THE SALE WHO HAVE BEEN OFFERED
FLOOR PLAN FINANCING OR A LOAN BY THE AUCTIONEER, AUCTION  OR  AFFILIATE
OR WORDS THAT CONVEY SUBSTANTIALLY THE SAME MESSAGE.
  S  4.  This  act  shall take effect on the sixtieth day after it shall
have become a law.

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