WOOSTER, Ohio — Auctioneers across the state are concerned about a law they believe could strip them of the right to sell certain types of construction equipment and large farm vehicles.
But a section also spelled out new licensing requirements for auctioneers wanting to sell equipment having a gross vehicle weight rating of more than 10,000 pounds, including road rollers, traction engines, power shovels, power cranes, commercial cars and trucks, or farm trucks, and other similar vehicles obtained primarily from the construction, mining, transportation or farming industries.
According to the new law, an auctioneer would need a construction equipment license to sell such things. The problem is, only one auction business in the state is believed to qualify: Ritchie Bros. Auctioneers.
The company bills itself as the world’s largest auction for industrial equipment and has an Ohio location between Columbus and Springfield.
The bill was signed by Ohio Gov. John Kasich in March, and set to become effective by the end of June.
Getting a license
To get a license, an auction company would need to maintain a permanent auction site in Ohio of at least 90 acres and also maintain more than 60,000 square feet of facility; be engaged primarily in the business of selling large construction and transportation equipment; receive more than $1 million in gross annual sales in Ohio; and derive not more than 10 percent of gross annual sales revenue in Ohio from the sale of motor vehicles having a gross vehicle weight rating of 10,000 pounds or less.
The Ohio Auctioneers Association called the bill “discriminatory” and likely unconstitutional under the state’s uniformity clause.
“Very few auctioneers (indeed, perhaps as few as one) meet this new and incredibly high licensing standard,” the association wrote in a letter it asked its members to send to their representatives.
McGregor said the parameters for licenses “were developed with people who are engaged in this business,” Ritchie Bros. being one of those.
McGregor said there was a “misunderstanding,” and that the bill actually was meant for those who sell construction equipment “and” automobiles.”
He said a more recent amendment sponsored by Senate Agriculture Committee Chairman Cliff Hite addresses the confusion, and allows licensed auctioneers in Ohio to continue selling construction equipment without needing an additional license.
According to Hite, the previous language literally could have put all the auctioneers in Ohio out of business, except for Ritchie Bros.
“Technically it could have put about 3,000 auctioneers out of business,” he said. “This was pretty much what we would call ‘corrective language.'”
Hite’s amendment specifies the new license requirement applies only when a person sells “both” construction equipment and incidentally, motor vehicles.
And, the amendment states the new license “does not in any way affect the conduct of auctions by any person holding an auction-related license issued by the Department of Agriculture who is acting in compliance with licensing requirements.”
Hite said legislators met with concerned auctioneers across the state, and understood why they were upset.
“That wasn’t fair,” he said. “We can’t do legislation that gives one entity a monopoly.”
Auctioneers feared they would lose sales, and buyers wold lose opportunities.
“If it were up to me, I would walk into a joint session of the House and Senate and I would raise holy heck,” said Jeff Bub, an auctioneer from Brunswick who sells industrial equipment.
Bub said the law as approved would hurt auctioneers, buyers and sellers and local communities — who would be forced to sell their construction equipment at licensed facilities — exclusively at Ritchie Brothers.
Public records show Ritchie Bros. has made financial contributions to McGregor’s campaign. A company official said he made the donations because he feels McGregor does a good job.
Gary Caufield, senior director of legal affairs for Ritchie Bros., said the original legislation was designed to satisfy concerns over the company selling automobiles — which is only an occasional and minor part of sales.
“It wasn’t Ritchie Brothers that set the restrictions at all,” he said. “What this legislation allowed Ritchie Bros. to do was sell motor vehicles …. along with the heavy equipment.”
Gene Pierce, public relations consultant for Ritchie Bros., said the company has a 20-plus year history in Ohio and is confident the amendment will resolve the confusion.
“This was an issue that was raised, so the legislation was drafted to fix it,” he said.
He said it was never the company’s intention to exclude other companies from selling construction equipment.