HB 489: "An Act regulating auctions and auctioneers; and providing for an effective date."
00HOUSE 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.