00 HOUSE BILL NO. 489                                                                                                      
01 "An Act regulating auctions and auctioneers; and providing for an effective date."                                      
02 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
03    * Section 1.  AS 08 is amended by adding a new chapter to read:                                                      
04 CHAPTER 10.  AUCTIONS; AUCTIONEERS.                                                                                     
05 ARTICLE 1.  BOARD OF AUCTIONEERS.                                                                                       
06  Sec. 08.10.010.  CREATION OF BOARD; MEMBERSHIP.  There is created                                                     
07 the Board of Auctioneers.  It shall consist of five members appointed by the governor                                   
08 and confirmed by the legislature.  Three members shall be auctioneers licensed under                                    
09 this chapter, and two members shall be public members under AS 08.01.025.                                               
10  Sec. 08.10.020.  REMOVAL OF MEMBER.  Notwithstanding AS 08.01.020,                                                    
11 a member of the board may be removed only for cause.  Unexcused absences from                                           
12 three board meetings during a 12-month period may constitute cause.  Valid excuses                                      
13 for absences include                                                                                                    
14   (1)  illness of the board member;                                                                                    
01   (2)  death of the member's spouse, child, mother, father, mother-in-law,                                             
02 father-in-law, grandmother, or grandfather;                                                                             
03   (3)  acts of God, including severe weather, that made attendance                                                     
04 impracticable.                                                                                                          
05  Sec. 08.10.030. MEETINGS.  The board shall meet as necessary to transact its                                          
06 business, but no more than once every three months.                                                                     
07  Sec. 08.10.040.  QUORUM; VOTES.  As provided under AS 08.01.030, a                                                    
08 majority of the membership of the board constitutes a quorum.  However, a majority                                      
09 vote of the full membership of the board is required to transact business that requires                                 
10 a vote, other than convening and adjourning.                                                                            
11  Sec. 08.10.050.  OFFICERS.  The members shall elect from among themselves                                             
12 a chair and a secretary.  A person may not serve more than two consecutive terms as                                     
13 chair.                                                                                                                  
14  Sec. 08.10.060.  REGULATIONS.  The board shall adopt regulations to                                                   
15 implement the licensing requirements of this chapter.                                                                   
16  ARTICLE 2.  LICENSING REQUIREMENTS.                                                                                    
17  Sec. 08.10.100.  LICENSES REQUIRED.  (a)  An individual may not conduct                                               
18 an auction, offer to conduct an auction, or advertise as being available to conduct an                                  
19 auction unless the person is licensed as an auctioneer under this chapter, is exempt                                    
20 from auctioneer licensing under AS 08.10.900, or is an apprentice licensed under this                                   
21 chapter who is participating in an auction under the direct supervision of an auctioneer                                
22 licensed under this chapter.                                                                                            
23  (b)  An individual may not be an apprentice auctioneer unless licensed under                                          
24 this chapter as an apprentice auctioneer.                                                                               
25  (c)  An auction company may not conduct an auction, offer to conduct an                                               
26 auction, or advertise as being available to conduct an auction unless the business is                                   
27 licensed under this chapter as an auction business.                                                                     
28  Sec. 08.10.110.  AUCTIONEER LICENSE.  Upon proper application and                                                     
29 payment of the appropriate fees set under AS 08.01.065, the board shall issue an                                        
30 auctioneer license to an individual who submits proof satisfactory to the board that the                                
31 individual                                                                                                              
01   (1)  is at least 18 years of age;                                                                                    
02   (2)  has not, within the preceding five years, been convicted of a felony;                                           
03   (3)  has not been convicted of an offense under AS 11.46, violation of                                               
04 an ordinance with elements similar to an offense under AS 11.46, or violation of a law                                  
05 or ordinance in another jurisdiction with elements similar to an offense under AS                                       
06 11.46;                                                                                                                  
07   (4)  has not been a partner in a partnership or an officer or controlling                                            
08 stockholder of a corporation, association, or other business entity that has been                                       
09 convicted of an offense described in (3) of this section;                                                               
10   (5)  has not had a license similar to one issued under this chapter                                                  
11 revoked or suspended in another jurisdiction;                                                                           
12   (6)  has been licensed as an apprentice auctioneer under this chapter for                                            
13 at least one year and participated in at least 20 auctions under the direct supervision                                 
14 of an auctioneer licensed under this chapter;                                                                           
15   (7)  has passed a written and oral examination approved by the                                                       
16 department that tests the individual's vocal abilities for auctioneering and the person's                               
17 general knowledge of the laws of this state relating to bulk sales, auctions, brokerage                                 
18 transactions, trade and commerce, and the provisions of this chapter;                                                   
19   (8)  is in compliance with AS 08.10.200 - 08.10.310; and                                                             
20   (9)  has graduated from an auction school approved by the board that                                                 
21 requires for graduation the successful completion of at least 80 hours of instruction                                   
22 approved by the board in the following areas:                                                                           
23   (A)  audience communications;                                                                                       
24   (B)  procurement of merchandise for auction;                                                                        
25   (C)  appraisals;                                                                                                    
26   (D)  auction law;                                                                                                   
27   (E)  preparations for auctions;                                                                                     
28   (F)  advertising auctions; and                                                                                      
29   (G)  conducting auctions.                                                                                           
30  Sec. 08.10.120.  APPRENTICE AUCTIONEER LICENSE.  Upon proper                                                          
31 application and payment of the appropriate fees set under AS 08.01.065, the board                                       
01 shall issue an apprentice auctioneer license to an individual who submits proof                                         
02 satisfactory to the board that the individual                                                                           
03   (1)  is sponsored by an auctioneer licensed under this chapter;                                                      
04   (2)  has not, within the preceding five years, been convicted of a felony;                                           
05   (3)  has not been convicted of an offense under AS 11.46, violation of                                               
06 an ordinance with elements similar to an offense under AS 11.46, or violation of a law                                  
07 or ordinance in another jurisdiction with elements similar to an offense under AS                                       
08 11.46;                                                                                                                  
09   (4)  has not been a partner in a partnership or an officer or controlling                                            
10 stockholder of a corporation, association, or other business entity that has been                                       
11 convicted of an offense described in (3) of this section; and                                                           
12   (5)  has not had a license similar to one issued under this chapter                                                  
13 revoked or suspended in another jurisdiction.                                                                           
14  Sec. 08.10.130.  AUCTION BUSINESS LICENSE.  (a)  Upon proper                                                          
15 application and payment of the appropriate fees set under AS 08.01.065, the board                                       
16 shall issue an auction business license to an auction company that submits proof                                        
17 satisfactory to the board that the auction company                                                                      
18   (1)  employs a person licensed under this chapter as an auctioneer; if                                               
19 the licensed auctioneer leaves the company, the company may not conduct an auction                                      
20 until employing another licensed auctioneer;                                                                            
21   (2)  has not, within the preceding five years, been convicted of a felony;                                           
22   (3)  has not been convicted of an offense under AS 11.46, violation of                                               
23 an ordinance with elements similar to an offense under AS 11.46, or violation of a law                                  
24 or ordinance in another jurisdiction with elements similar to an offense under AS                                       
25 11.46;                                                                                                                  
26   (4)  is in compliance with AS 08.10.200 - 08.10.310; and                                                             
27   (5)  has not had a license similar to one issued under this chapter                                                  
28 revoked or suspended in another jurisdiction.                                                                           
29  (b)  An application for an auction business license must include                                                      
30   (1)  the name of the auction company;                                                                                
31   (2)  the names of the owners of the auction company;                                                                 
01   (3)  the auction company's mailing address;                                                                          
02   (4)  the location where the records of the auction company are kept; and                                             
03   (5)  other information the board may require.                                                                        
04  (c)  Within 30 days after a change in the information required under (b) of this                                      
05 section, a licensed auction business shall report the change to the board.                                              
06  (d)  A licensed auction business may not operate indoors at a fixed location                                          
07 without                                                                                                                 
08   (1)  adequate ventilation for removal of tobacco smoke;                                                              
09   (2)  separate restrooms for male and female customers;                                                               
10   (3)  adequate unlocked lighted fire escapes; and                                                                     
11   (4)  automatic emergency lighting that operates during general power                                                 
12 failures.                                                                                                               
13  Sec. 08.10.140.  LICENSES NONTRANSFERABLE.  A license issued under                                                    
14 this chapter is not transferable.                                                                                       
15 ARTICLE 3.  BONDING REQUIREMENTS.                                                                                       
16  Sec. 08.10.200.  AMOUNT OF BOND; SCOPE.  A licensed auctioneer and a                                                  
17 licensed auction business shall maintain a $100,000 surety bond issued by an entity                                     
18 authorized to do bonding business in the state.  The bond must be in a form approved                                    
19 by the board and run in favor of the state for the use and benefit of persons who do                                    
20 business with the auctioneer or auction business who are damaged by the auctioneer's                                    
21 or auction business's violation of this chapter or by the auctioneer's or auction                                       
22 business's breach of a contract with the person.  In addition to damages, the bond must                                 
23 cover reasonable costs and attorney fees for prevailing plaintiffs under this section.                                  
24  Sec. 08.10.210.  PERSONS COVERED UNDER BOND.  (a)  A bond                                                             
25 maintained under AS 08.10.200 for a licensed auctioneer must include coverage of                                        
26 licensed apprentice auctioneers that are supervised by the auctioneer except that the                                   
27 auctioneer's bond need not include coverage of an apprentice auctioneer if the                                          
28 apprentice auctioneer is covered under the bond maintained by a licensed auction                                        
29 business and the apprentice works exclusively for the auction business.                                                 
30  (b)  The bond maintained under AS 08.10.200 by a licensed auction business                                            
31 may include coverage of auctioneers and apprentice auctioneers who work exclusively                                     
01 for the auction business.  The bond's coverage of an auctioneer or apprentice                                           
02 auctioneer expires when the auctioneer or apprentice auctioneer leaves the employment                                   
03 of the auction business.                                                                                                
04  Sec. 08.10.220.  BONDING OPTION FOR CERTAIN AUCTIONEERS.  A                                                           
05 licensed auctioneer who is the sole proprietor of an auction company is required to                                     
06 maintain a bond under AS 08.10.200 only as either                                                                       
07   (1)  an auctioneer; or                                                                                               
08   (2)  a covered person under the bond maintained by a licensed auction                                                
09 business if the auctioneer conducts auctions exclusively for the auction business.                                      
10  Sec. 08.10.230.  POSTING OF BOND.  A bond required under AS 08.10.200                                                 
11 need not be posted until the applicant for a license under this chapter is notified by the                              
12 board that the applicant meets all other requirements for licensure under this chapter.                                 
13 However, a license may not be issued to an applicant until the required bond is posted                                  
14 with the department.                                                                                                    
15 ARTICLE 4.  INSURANCE REQUIREMENTS.                                                                                     
16  Sec. 08.10.300.  LIABILITY INSURANCE.  (a)  A licensed auctioneer and a                                               
17 licensed auction business shall maintain comprehensive commercial general liability                                     
18 insurance with coverage limits of not less than $300,000 per occurrence, subject to an                                  
19 annual maximum as provided in the policy.  The policy must include coverage for                                         
20   (1)  premises - operations;                                                                                          
21   (2)  independent contractors working with the auctioneer or auction                                                  
22 business;                                                                                                               
23   (3)  products - complete operations;                                                                                 
24   (4)  broad form property damage;                                                                                     
25   (5)  blanket contractual; and                                                                                        
26   (6)  personal injury.                                                                                                
27  (b)  A policy maintained under this section must provide that the insurer will                                        
28 notify the department if the policy is cancelled or its coverage is changed as to                                       
29 amount, types of coverage, or persons covered.                                                                          
30  Sec. 08.10.310.  MOTOR VEHICLE INSURANCE.  A licensed auctioneer or                                                   
31 licensed auction business shall maintain comprehensive motor vehicle liability                                          
01 insurance.  A policy maintained under this section must provide coverage subject to                                     
02 limits exclusive of interest and costs, with respect to each vehicle owned, hired, or                                   
03 rented by the auctioneer or auction business, as follows:                                                               
04   (1)  $100,000 because of bodily injury to or death of one person in one                                              
05 accident, and, subject to the same limit for one person, $300,000 because of bodily                                     
06 injury to or death of two or more persons in one accident; and                                                          
07   (2)  $50,000 because of injury to or destruction of property of others in                                            
08 one accident.                                                                                                           
09 ARTICLE 5.  AUCTION PRACTICES.                                                                                          
10  Sec. 08.10.400.  ADVERTISING CERTAIN AUCTIONS.  (a)  An                                                               
11 advertisement for an auction of a person's estate, whether it is the estate of a decedent                               
12 or of a living person, must include the                                                                                 
13   (1)  person's name; and                                                                                              
14   (2)  name, telephone number, and license number of the auctioneer or                                                 
15 auction business conducting the auction.                                                                                
16  (b)  An advertisement for an auction conducted under AS 45.07.210 must                                                
17 describe the auction as a storage auction and include the following information:                                        
18   (1)  the name and address of the storage facility;                                                                   
19   (2)  the name of the individuals whose units or property are involved                                                
20 in the auction unless the individuals' names have already been published under                                          
21 AS 45.07.210(b)(6) in a newspaper of general circulation in the area where the auction                                  
22 will be held.                                                                                                           
23  Sec. 08.10.410.  AUCTION AGREEMENT.  (a)  Before conducting an auction                                                
24 in this state, a licensed auctioneer or licensed auction business shall execute a written                               
25 agreement with the owner of the property to be offered for sale or with the owner's                                     
26 agent.  The agreement must include                                                                                      
27   (1)  the name and address of the owner of the property;                                                              
28   (2)  the name and address of the person who is employing the                                                         
29 auctioneer or auction business if different from the owner of the property; and                                         
30   (3)  the terms and conditions under which the auctioneer or auction                                                  
31 business will receive the property and remit the sale proceeds to the owner.                                            
01  (b)  Before an auction is conducted at an auction house or similar place where                                        
02 the public regularly offers property for sale in multiple lots and there has been no prior                              
03 negotiation between the property's owner or agent and the auctioneer or auction                                         
04 company involving terms or conditions pertaining to the property being offered for                                      
05 sale, then                                                                                                              
06   (1)  the property of lots to be auctioned must be received and                                                       
07 inventoried on a three-part form stating the name and address of the property's owner                                   
08 or the owner's agent, the lot number assigned, the date the form was completed, the                                     
09 date of the anticipated auction, the date of the actual auction, total sales proceeds of                                
10 items sold, commission, cost of related fees or services, actual amount of money sent                                   
11 to the consignor, check number of money sent to the consignor, and number of pages                                      
12 in the document required under this paragraph;                                                                          
13   (2)  one copy of the form required under (1) of this subsection shall be                                             
14 given to the consignor at the time of consignment and another copy shall be given to                                    
15 the consignor after the auction along with a copy of the clerk tickets or an itemized                                   
16 printout that shows the lot number, bidder number, a description of the item auctioned,                                 
17 and the price received for the item;                                                                                    
18   (3)  the auctioneer or auction company shall file the original of the                                                
19 document required under (1) of this subsection with the paperwork associated with this                                  
20 auction and keep it for at least five years.                                                                            
21  Sec. 08.10.420.  AUCTION RECORDS.  (a)  A licensed auctioneer or licensed                                             
22 auction business shall keep a record of the bidders at an auction.  The record must                                     
23 include at least the following information:                                                                             
24   (1)  location and date of sale;                                                                                      
25   (2)  the bidder's bidding number, name, and company;                                                                 
26   (3)  the physical location of the bidder's residence or the bidder's                                                 
27 company by use of a street number or milepost, city, state, and zip code;                                               
28   (4)  the bidder's telephone number; and                                                                              
29   (5)  the bidder's signature.                                                                                         
30  (b)  The information required under (a) of this section may include a post office                                     
31 box in addition to, but not instead of, the street address of the bidder or of the bidder's                             
01 company.                                                                                                                
02  Sec. 08.10.430.  AUCTION PROCEEDS.  A licensed auctioneer or licensed                                                 
03 auction business shall maintain a separate trust or escrow account in a federally insured                               
04 bank or savings and loan association located in the state in which shall be deposited                                   
05 all proceeds received by the auctioneer or auction business for another person through                                  
06 an auction sale.                                                                                                        
07 ARTICLE 6.  DISCIPLINARY ACTIONS; PENALTIES.                                                                            
08  Sec. 08.10.500.  GROUNDS FOR DISCIPLINARY ACTIONS.  The board may                                                     
09 deny a license to a person or take a disciplinary action authorized under AS 08.01.075                                  
10 against a licensee if the person or licensee                                                                            
11   (1)  violates AS 45 or a regulation adopted under AS 45;                                                             
12   (2)  violates this chapter or a regulation adopted under this chapter;                                               
13   (3)  is convicted or has been convicted in any jurisdiction of a felony,                                             
14 an offense that would be grounds for denial of an initial license under this chapter, or                                
15 an offense that in the judgment of the board, directly relates to the practice or the                                   
16 ability to practice the profession of auctioneering;                                                                    
17   (4)  misrepresents property for auction or makes false promises                                                      
18 concerning the use, value, or condition of the property;                                                                
19   (5)  fails to account for or to pay, within a reasonable time not to                                                 
20 exceed 15 banking days from the last auction of goods, money belonging to another                                       
21 that has come into the control of the person or licensee through an auction unless a                                    
22 written contract between the relevant parties stipulates other applicable terms and                                     
23 conditions;                                                                                                             
24   (6)  uses false, deceptive, misleading, or untruthful advertising;                                                   
25   (7)  acts in connection with a sales transaction in a manner that                                                    
26 demonstrates bad faith or dishonesty;                                                                                   
27   (8)  uses or permits the use of false bidders, cappers, shills, puffing, or                                          
28 other method of employing false bids to increase the sale price of an auctioned item;                                   
29   (9)  makes a material false statement on a license application;                                                      
30   (10)  commingles money or property of another person or business                                                     
31 received at auction with those of the licensee; or                                                                      
01   (11)  has a license to practice a comparable profession revoked,                                                     
02 suspended, or otherwise acted against by another jurisdiction.                                                          
03  Sec. 08.10.510.  PENALTY.  A person who violates this chapter or a regulation                                         
04 adopted under this chapter is guilty of a class C felony.                                                               
05 ARTICLE 7.  GENERAL PROVISIONS.                                                                                         
06  Sec. 08.10.900.  EXEMPTIONS.  This chapter does not apply to the following:                                           
07   (1)  an auction of goods conducted by an individual who personally                                                   
08 owns the goods and who did not acquire the goods at auction or for resale publicly or                                   
09 privately;                                                                                                              
10   (2)  an auction conducted by or for charitable, civic, religious, or                                                 
11 political organizations by an auctioneer who neither receives compensation for the                                      
12 auction nor is advertised as being the auctioneer for the auction;                                                      
13   (3)  an auction of fur pelts or reindeer horn conducted by a cooperative                                             
14 association organized under state law or the cooperative's wholly owned subsidiary if                                   
15 at least 85 percent of the fur pelts and reindeer horn are from members of the                                          
16 association and the fur pelts and reindeer horn from nonmembers are included only for                                   
17 the purpose of completing lots or orders;                                                                               
18   (4)  an auction conducted by a person enrolled in a class at a school of                                             
19 auctioneering approved by the board if the auction is for the purpose of training and                                   
20 receiving instruction, is under the direct supervision of a licensed auctioneer who is                                  
21 an instructor at the school or a licensed auctioneer who assumes full responsibility for                                
22 the activities of the student auctioneer.                                                                               
23  Sec. 08.10.990.  DEFINITIONS.  In this chapter,                                                                       
24   (1)  "auction" means a transaction conducted by means of exchanges                                                   
25 between an auctioneer and the members of the auctioneer's audience, constituting a                                      
26 series of invitations for offers for the purchase of goods or real property made by the                                 
27 auctioneer, offers by the members of the audience, and the acceptance of the highest                                    
28 or most favorable offer;                                                                                                
29   (2)  "auction company" means a sole proprietorship, person, partnership,                                             
30 corporation, or other legal or commercial entity that sells or offers to sell goods or real                             
31 estate at auction or that arranges, sponsors, advertises, or manages auctions;                                          
01   (3)  "auctioneer" means an individual who calls for bids or conducts or                                              
02 offers to conduct an auction either orally or silently;                                                                 
03   (4)  "auction house" means a fixed or established place designed,                                                    
04 intended, or used for the conduct of auctions;                                                                          
05   (5)  "board" means the Board of Auctioneers established under this                                                   
06 chapter;                                                                                                                
07   (6)  "goods" means wares, chattels, merchandise, or personal property,                                               
08 owned or consigned, that may be lawfully kept or offered for sale;                                                      
09   (7)  "licensee" means an auctioneer, apprentice auctioneer, or auction                                               
10 company licensed under this chapter.                                                                                    
11    * Sec. 2.  AS 08.01.010 is amended by adding a new paragraph to read:                                                
12   (37)  Board of Auctioneers (AS 08.10.010).                                                                           
13    * Sec. 3.  AS 08.03.010(c) is amended by adding a new paragraph to read:                                             
14   (25)  Board of Auctioneers (AS 08.10.010) -- June 30, 2000.                                                          
15    * Sec. 4.  AS 44.62.330(a) is amended by adding a new paragraph to read:                                             
16   (60)  Board of Auctioneers.                                                                                          
17  * Sec. 5.  TRANSITIONAL PROVISIONS.  (a)  Notwithstanding AS 39.05.055, the five                                       
18 persons initially appointed to the Board of Auctioneers that is established under this Act shall                        
19 be appointed to terms as follows:                                                                                       
20   (1)  one person each shall be appointed to terms of one, two, and three years;                                        
21   (2)  two persons shall be appointed to a term of four years.                                                          
22  (b)  Notwithstanding AS 08.10.010, enacted by sec. 1 of this Act, the three initial                                    
23 appointees to the Board of Auctioneers that is established under this Act who are auctioneers                           
24 are not required to be licensed under this chapter before their appointment, but they must have                         
25 had, in the seven years immediately preceding their initial appointment, at least five years of                         
26 regular auctioneering experience.  A person appointed under this subsection may not be                                  
27 reappointed unless the person is licensed under AS 08.10, enacted by sec. 1 of this Act.                                
28  (c)  Notwithstanding AS 08.10, added by sec. 1 of this Act, the Board of Auctioneers                                   
29 shall issue an auctioneer license to an individual who                                                                  
30   (1)  applies for the license by July 1, 1997;                                                                         
31   (2)  submits proof satisfactory to the board of having been the auctioneer at no                                      
01 less than 30 auctions in the state within the preceding two years, one of which involved at                             
02 least $30,000 in gross proceeds;                                                                                        
03   (3)  demonstrates compliance with the insurance and bonding requirements of                                           
04 AS 08.10.200 - 08.10.310; and                                                                                           
05   (4)  pays the applicable fee set under AS 08.01.065.                                                                  
06  (d)  After initial issuance, a license issued under (c) of this section and the licensee to                            
07 whom the license is issued are subject to AS 08.10, enacted by sec. 1 of this Act.                                      
08    * Sec. 6.  AS 08.10.010 - 08.10.060, enacted by sec. 1 of this Act, and secs. 2 - 4 and 5(a)                         
09 and (b) of this Act take effect immediately under AS 01.10.070(c).                                                      
10    * Sec. 7.  Except as provided in sec. 6 of this Act, this Act takes effect January 1, 1997.