00 HOUSE BILL NO. 191 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 the Board 07 of Auctioneers. It shall consist of five members appointed by the governor and 08 confirmed by the legislature. Three members shall be auctioneers licensed under this 09 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, a 11 member of the board may be removed only for cause. Unexcused absences from three 12 board meetings during a 12-month period may constitute cause. Valid excuses for 13 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 majority 08 of the membership of the board constitutes a quorum. However, a majority vote of the 09 full membership of the board is required to transact business that requires a vote, other 10 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 implement 15 the licensing requirements of this chapter. 16 Article 2. Licensing Requirements. 17  Sec. 08.10.100. Licenses required. (a) An individual may not conduct an 18 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 payment of 29 the appropriate fees set under AS 08.01.065, the board shall issue an auctioneer license 30 to an individual who submits proof satisfactory to the board that the individual 31  (1) is at least 18 years of age; 01  (2) has not, within the preceding five years, been convicted of a felony; 02  (3) has not been convicted of an offense under AS 11.46, violation of 03 an ordinance with elements similar to an offense under AS 11.46, or violation of a law 04 or ordinance in another jurisdiction with elements similar to an offense under 05 AS 11.46; 06  (4) has not been a partner in a partnership or an officer or controlling 07 stockholder of a corporation, association, or other business entity that has been 08 convicted of an offense described in (3) of this section; 09  (5) has not had a license similar to one issued under this chapter 10 revoked or suspended in another jurisdiction; 11  (6) has been licensed as an apprentice auctioneer under this chapter for 12 at least one year and participated in at least 20 auctions under the direct supervision 13 of an auctioneer licensed under this chapter; 14  (7) has passed a written and oral examination approved by the board 15 that tests the individual's vocal abilities for auctioneering and the person's general 16 knowledge of the laws of this state relating to bulk sales, auctions, brokerage 17 transactions, trade and commerce, and the provisions of this chapter; 18  (8) is in compliance with AS 08.10.200 - 08.10.310; and 19  (9) has graduated from an auction school approved by the board that 20 requires for graduation the successful completion of at least 80 hours of instruction 21 approved by the board in the following areas: 22  (A) audience communications; 23  (B) procurement of merchandise for auction; 24  (C) appraisals; 25  (D) auction law; 26  (E) preparations for auctions; 27  (F) advertising auctions; and 28  (G) conducting auctions. 29  Sec. 08.10.120. Apprentice auctioneer license. Upon proper application and 30 payment of the appropriate fees set under AS 08.01.065, the board shall issue an 31 apprentice auctioneer license to an individual who submits proof satisfactory to the 01 board that the individual 02  (1) is sponsored by an auctioneer licensed under this chapter; 03  (2) has not, within the preceding five years, been convicted of a felony; 04  (3) has not been convicted of an offense under AS 11.46, violation of 05 an ordinance with elements similar to an offense under AS 11.46, or violation of a law 06 or ordinance in another jurisdiction with elements similar to an offense under 07 AS 11.46; 08  (4) has not been a partner in a partnership or an officer or controlling 09 stockholder of a corporation, association, or other business entity that has been 10 convicted of an offense described in (3) of this section; and 11  (5) has not had a license similar to one issued under this chapter 12 revoked or suspended in another jurisdiction. 13  Sec. 08.10.130. Auction business license. (a) Upon proper application and 14 payment of the appropriate fees set under AS 08.01.065, the board shall issue an 15 auction business license to an auction company that submits proof satisfactory to the 16 board that the auction company 17  (1) employs a person licensed under this chapter as an auctioneer; if 18 the licensed auctioneer leaves the company, the company may not conduct an auction 19 until employing another licensed auctioneer; 20  (2) has not, within the preceding five years, been convicted of a felony; 21  (3) has not been convicted of an offense under AS 11.46, violation of 22 an ordinance with elements similar to an offense under AS 11.46, or violation of a law 23 or ordinance in another jurisdiction with elements similar to an offense under 24 AS 11.46; 25  (4) is in compliance with AS 08.10.200 - 08.10.310; and 26  (5) has not had a license similar to one issued under this chapter 27 revoked or suspended in another jurisdiction. 28  (b) An application for an auction business license must include 29  (1) the name of the auction company; 30  (2) the names of the owners of the auction company; 31  (3) the auction company's mailing address; 01  (4) the location where the records of the auction company are kept; and 02  (5) other information the board may require. 03  (c) Within 30 days after a change in the information required under (b) of this 04 section, a licensed auction business shall report the change to the board. 05  (d) A licensed auction business may not operate indoors at a fixed location 06 without 07  (1) adequate ventilation for removal of tobacco smoke; 08  (2) separate restrooms for male and female customers; 09  (3) adequate unlocked lighted fire escapes; and 10  (4) automatic emergency lighting that operates during general power 11 failures. 12  Sec. 08.10.140. Licenses nontransferable. A license issued under this chapter 13 is not transferable. 14 Article 3. Bonding Requirements. 15  Sec. 08.10.200. Amount of bond; scope. A licensed auctioneer and a licensed 16 auction business shall maintain a $100,000 surety bond issued by an entity authorized 17 to do bonding business in the state. The bond must be in a form approved by the 18 board and run in favor of the state for the use and benefit of persons who do business 19 with the auctioneer or auction business who are damaged by the auctioneer's or 20 auction business's violation of this chapter or by the auctioneer's or auction business's 21 breach of a contract with the person. In addition to damages, the bond must cover 22 reasonable costs and attorney fees for prevailing plaintiffs under this section. 23  Sec. 08.10.210. Persons covered under bond. (a) A bond maintained under 24 AS 08.10.200 for a licensed auctioneer must include coverage of licensed apprentice 25 auctioneers who are supervised by the auctioneer except that the auctioneer's bond 26 need not include coverage of an apprentice auctioneer if the apprentice auctioneer is 27 covered under the bond maintained by a licensed auction business and the apprentice 28 works exclusively for the auction business. 29  (b) The bond maintained under AS 08.10.200 by a licensed auction business 30 may include coverage of auctioneers and apprentice auctioneers who work exclusively 31 for the auction business. The bond's coverage of an auctioneer or apprentice 01 auctioneer expires when the auctioneer or apprentice auctioneer leaves the employment 02 of the auction business. 03  Sec. 08.10.220. Bonding option for certain auctioneers. A licensed 04 auctioneer who is the sole proprietor of an auction company is required to maintain 05 a bond under AS 08.10.200 only as either 06  (1) an auctioneer; or 07  (2) a covered person under the bond maintained by a licensed auction 08 business if the auctioneer conducts auctions exclusively for the auction business. 09  Sec. 08.10.230. Posting of bond. A bond required under AS 08.10.200 need 10 not be posted until the applicant for a license under this chapter is notified by the 11 board that the applicant meets all other requirements for licensure under this chapter. 12 However, a license may not be issued to an applicant until the required bond is posted 13 with the board. 14 Article 4. Insurance Requirements. 15  Sec. 08.10.300. Liability insurance. (a) A licensed auctioneer and a licensed 16 auction business shall maintain comprehensive commercial general liability insurance 17 with coverage limits of not less than $300,000 for each occurrence, subject to an 18 annual maximum as provided in the policy. The policy must include coverage for 19  (1) premises - operations; 20  (2) independent contractors working with the auctioneer or auction 21 business; 22  (3) products - complete operations; 23  (4) broad form property damage; 24  (5) blanket contractual; and 25  (6) personal injury. 26  (b) A policy maintained under this section must provide that the insurer will 27 notify the board if the policy is cancelled or its coverage is changed as to amount, 28 types of coverage, or persons covered. 29  Sec. 08.10.310. Motor vehicle insurance. A licensed auctioneer or licensed 30 auction business shall maintain comprehensive motor vehicle liability insurance. A 31 policy maintained under this section must provide coverage subject to limits exclusive 01 of interest and costs, with respect to each vehicle owned, hired, or rented by the 02 auctioneer or auction business, as follows: 03  (1) $100,000 because of bodily injury to or death of one person in one 04 accident, and, subject to the same limit for one person, $300,000 because of bodily 05 injury to or death of two or more persons in one accident; and 06  (2) $50,000 because of injury to or destruction of property of others in 07 one accident. 08 Article 5. Auction Practices. 09  Sec. 08.10.400. Advertising certain auctions. (a) An advertisement for an 10 auction of a person's estate, whether it is the estate of a decedent or of a living person, 11 must include the 12  (1) person's name; and 13  (2) name, telephone number, and license number of the auctioneer or 14 auction business conducting the auction. 15  (b) An advertisement for an auction conducted under AS 45.07.210 must 16 describe the auction as a storage auction and include the following information: 17  (1) the name and address of the storage facility; 18  (2) the name of the individuals whose units or property are involved 19 in the auction unless the individuals' names have already been published under 20 AS 45.07.210(b)(6) in a newspaper of general circulation in the area where the auction 21 will be held. 22  Sec. 08.10.410. Auction agreement. (a) Before conducting an auction in this 23 state, a licensed auctioneer or licensed auction business shall execute a written 24 agreement with the owner of the property to be offered for sale or with the owner's 25 agent. The agreement must include 26  (1) the name and address of the owner of the property; 27  (2) the name and address of the person who is employing the 28 auctioneer or auction business if different from the owner of the property; and 29  (3) the terms and conditions under which the auctioneer or auction 30 business will receive the property and remit the sale proceeds to the owner. 31  (b) Before an auction is conducted at an auction house or similar place where 01 the public regularly offers property for sale in multiple lots and there has been no prior 02 negotiation between the property's owner or agent and the auctioneer or auction 03 company involving terms or conditions pertaining to the property being offered for 04 sale, then 05  (1) the property of lots to be auctioned must be received and 06 inventoried on a three-part form stating the name and address of the property's owner 07 or the owner's agent, the lot number assigned, the date the form was completed, the 08 date of the anticipated auction, the date of the actual auction, total sales proceeds of 09 items sold, commission, cost of related fees or services, actual amount of money sent 10 to the consignor, check number of money sent to the consignor, and number of pages 11 in the document required under this paragraph; 12  (2) one copy of the form required under (1) of this subsection shall be 13 given to the consignor at the time of consignment and another copy shall be given to 14 the consignor after the auction along with a copy of the clerk tickets or an itemized 15 printout that shows the lot number, bidder number, a description of the item auctioned, 16 and the price received for the item; 17  (3) the auctioneer or auction company shall file the original of the 18 document required under (1) of this subsection with the paperwork associated with this 19 auction and keep it for at least five years. 20  Sec. 08.10.420. Auction records. (a) A licensed auctioneer or licensed 21 auction business shall keep a record of the bidders at an auction. The record must 22 include at least the following information: 23  (1) the location and date of sale; 24  (2) the bidder's bidding number, name, and company; 25  (3) the physical location of the bidder's residence or the bidder's 26 company by use of a street number or milepost, city, state, and zip code; 27  (4) the bidder's telephone number; and 28  (5) the bidder's signature. 29  (b) The information required under (a) of this section may include a post office 30 box in addition to, but not instead of, the street address of the bidder or of the bidder's 31 company. 01  Sec. 08.10.430. Auction proceeds. A licensed auctioneer or licensed auction 02 business shall maintain a separate trust or escrow account in a federally insured bank 03 or savings and loan association located in the state in which shall be deposited all 04 proceeds received by the auctioneer or auction business for another person through an 05 auction sale. 06 Article 6. Disciplinary Actions; Penalties. 07  Sec. 08.10.500. Grounds for disciplinary actions. The board may deny a 08 license to a person or take a disciplinary action authorized under AS 08.01.075 against 09 a licensee if the person or licensee 10  (1) violates AS 45 or a regulation adopted under AS 45; 11  (2) violates this chapter or a regulation adopted under this chapter; 12  (3) is convicted or has been convicted in any jurisdiction of a felony, 13 an offense that would be grounds for denial of an initial license under this chapter, or 14 an offense that in the judgment of the board directly relates to the practice or the 15 ability to practice the profession of auctioneering; 16  (4) misrepresents property for auction or makes false promises 17 concerning the use, value, or condition of the property; 18  (5) fails to account for or to pay, within a reasonable time not to 19 exceed 15 banking days from the last auction of goods, money belonging to another 20 that has come into the control of the person or licensee through an auction unless a 21 written contract between the relevant parties stipulates other applicable terms and 22 conditions; 23  (6) uses false, deceptive, misleading, or untruthful advertising; 24  (7) acts in connection with a sales transaction in a manner that 25 demonstrates bad faith or dishonesty; 26  (8) uses or permits the use of false bidders, cappers, shills, puffing, or 27 other method of employing false bids to increase the sale price of an auctioned item; 28  (9) makes a material false statement on a license application; 29  (10) commingles money or property of another person or business 30 received at auction with that of the licensee; or 31  (11) has a license to practice a comparable profession revoked, 01 suspended, or otherwise acted against by another jurisdiction. 02  Sec. 08.10.510. Penalty. A person who violates this chapter or a regulation 03 adopted under this chapter is guilty of a class C felony. 04 Article 7. General Provisions. 05  Sec. 08.10.900. Exemptions. This chapter does not apply to the following: 06  (1) an auction of goods conducted by an individual who personally 07 owns the goods and who did not acquire the goods at auction or for resale publicly or 08 privately; 09  (2) an auction conducted by or for charitable, civic, religious, or 10 political organizations by an auctioneer who neither receives compensation for the 11 auction nor is advertised as being the auctioneer for the auction; 12  (3) an auction of fur pelts or reindeer horn conducted by a cooperative 13 association organized under state law or the cooperative's wholly owned subsidiary if 14 at least 85 percent of the fur pelts and reindeer horn are from members of the 15 association and the fur pelts and reindeer horn from nonmembers are included only for 16 the purpose of completing lots or orders; 17  (4) an auction conducted by a person enrolled in a class at a school of 18 auctioneering approved by the board if the auction is for the purpose of training and 19 receiving instruction and is under the direct supervision of a licensed auctioneer who 20 is an instructor at the school or a licensed auctioneer who assumes full responsibility 21 for the activities of the student auctioneer. 22  Sec. 08.10.990. Definitions. In this chapter, 23  (1) "auction" means a transaction conducted by means of exchanges 24 between an auctioneer and the members of the auctioneer's audience, constituting a 25 series of invitations for offers for the purchase of goods or real property made by the 26 auctioneer, offers by the members of the audience, and the acceptance of the highest 27 or most favorable offer; 28  (2) "auction company" means a sole proprietorship, person, partnership, 29 corporation, or other legal or commercial entity that sells or offers to sell goods or real 30 estate at auction or that arranges, sponsors, advertises, or manages auctions; 31  (3) "auctioneer" means an individual who calls for bids or conducts or 01 offers to conduct an auction either orally or silently; 02  (4) "auction house" means a fixed or established place designed, 03 intended, or used for the conduct of auctions; 04  (5) "board" means the Board of Auctioneers established under this 05 chapter; 06  (6) "goods" means wares, chattels, merchandise, or personal property, 07 owned or consigned, that may be lawfully kept or offered for sale; 08  (7) "licensee" means an auctioneer, apprentice auctioneer, or auction 09 company licensed under this chapter. 10 * Sec. 2. AS 08.01.010 is amended by adding a new paragraph to read: 11  (35) Board of Auctioneers (AS 08.10.010). 12 * Sec. 3. AS 08.03.010(c) is amended by adding a new paragraph to read: 13  (21) Board of Auctioneers (AS 08.10.010) -- June 30, 2001. 14 * Sec. 4. AS 44.62.330(a) is amended by adding a new paragraph to read: 15  (60) Board of Auctioneers. 16 * Sec. 5. TRANSITIONAL PROVISIONS. (a) Notwithstanding AS 39.05.055, the five 17 persons initially appointed to the Board of Auctioneers that is established under this Act shall 18 be appointed to terms as follows: 19 (1) one person each shall be appointed to terms of one, two, and three years; 20 (2) two persons shall be appointed to terms of four years. 21 (b) Notwithstanding AS 08.10.010, enacted by sec. 1 of this Act, the three initial 22 appointees to the Board of Auctioneers that is established under this Act who are auctioneers 23 are not required to be licensed under this chapter before their appointment, but they must have 24 had, in the seven years immediately preceding their initial appointment, at least five years of 25 regular auctioneering experience. A person appointed under this subsection may not be 26 reappointed unless the person is licensed under AS 08.10, enacted by sec. 1 of this Act. 27 (c) Notwithstanding AS 08.10, added by sec. 1 of this Act, the Board of Auctioneers 28 shall issue an auctioneer license to an individual who 29 (1) applies for the license by July 1, 1998; 30 (2) submits proof satisfactory to the board of having been the auctioneer at no 31 less than 30 auctions in the state within the preceding two years, one of which involved at 01 least $30,000 in gross proceeds; 02 (3) demonstrates compliance with the insurance and bonding requirements of 03 AS 08.10.200 - 08.10.310; and 04 (4) pays the applicable fee set under AS 08.01.065. 05 (d) After initial issuance, a license issued under (c) of this section and the licensee to 06 whom the license is issued are subject to AS 08.10, enacted by sec. 1 of this Act. 07 * Sec. 6. AS 08.10.010 - 08.10.060, enacted by sec. 1 of this Act, and secs. 2 - 4 and 5(a) 08 and (b) of this Act take effect immediately under AS 01.10.070(c). 09 * Sec. 7. Except as provided in sec. 6 of this Act, this Act takes effect January 1, 1998.