H 4681 Session 112 (1997-1998)
H 4681 General Bill, By Wilkes
A BILL TO AMEND CHAPTER 6, TITLE 40, CODE OF LAWS OF SOUTH CAROLINA, 1976,
RELATING TO THE LICENSURE AND REGULATION OF AUCTIONEERS, SO AS TO CONFORM THIS
CHAPTER TO THE STATUTORY ORGANIZATIONAL FRAMEWORK ESTABLISHED FOR PROFESSIONAL
AND OCCUPATIONAL BOARDS UNDER THE ADMINISTRATION OF THE DEPARTMENT OF LABOR,
LICENSING AND REGULATION AND TO FURTHER PROVIDE FOR THE LICENSURE AND
REGULATION OF AUCTIONEERS.
02/24/98 House Introduced and read first time HJ-11
02/24/98 House Referred to Committee on Labor, Commerce and
Industry HJ-11
A BILL
TO AMEND CHAPTER 6, TITLE 40, CODE OF LAWS OF
SOUTH CAROLINA, 1976, RELATING TO THE LICENSURE
AND REGULATION OF AUCTIONEERS, SO AS TO CONFORM
THIS CHAPTER TO THE STATUTORY ORGANIZATIONAL
FRAMEWORK ESTABLISHED FOR PROFESSIONAL AND
OCCUPATIONAL BOARDS UNDER THE ADMINISTRATION
OF THE DEPARTMENT OF LABOR, LICENSING, AND
REGULATION AND TO FURTHER PROVIDE FOR THE
LICENSURE AND REGULATION OF AUCTIONEERS.
Be it enacted by the General Assembly of the State of South
Carolina:
SECTION 1. Chapter 6 of Title 40 of the 1976 Code is amended
to read:
"CHAPTER 6
Auctioneers
Section 40-6-10. For the purposes of this chapter the
following definitions apply:
(1) 'Auction' means the sale of goods or real estate
by means of exchanges between an auctioneer and members of an
audience, the exchanges consisting of a series of invitations for offers
made by the auctioneer, offer by members of the audience, and the
acceptance by the auctioneer of the highest or most favorable offer.
(2) 'Auctioneer' means a person who conducts or
offers to conduct auctions and includes apprentice auctioneers except
as stricter standards are specified by this chapter for apprentice
auctioneers.(3) 'Absolute auction' means the sale of real or
personal property at auction whereby every item offered from the
block is sold to the highest bidder without reserve and without the
requirement of a minimum bid or other conditions which limit the
sale other than to the highest bidder.
(4) 'Estate sale' means the sale at auction of
property of a specified deceased person or the property of a specified
living person's estate but does not mean the sale at auction of
property of any other person.
(5) 'Auction firm' means a sole proprietorship of
which the owner is not a licensed auctioneer or a partnership,
association, or corporation, not otherwise exempt from this chapter,
that sells either directly or through agents, real or personal property
at auction or that arranges, sponsors, manages, conducts, or advertises
auctions or that in the regular course of business uses or allows the
use of its facilities for auctions. This definition applies whether or
not the owner or officer of that business acts as an auctioneer.
(6) 'Fund' means the Auctioneer Recovery Fund.
(7) 'Owner' means the bona fide owner of the
property being offered for sale; in the case of a partnership, 'owner'
means a general partner in a partnership that owns the property being
offered for sale, provided that in the case of a limited partnership it
has filed a certificate of limited partnership as required by Section
33-42-210; in the case of a corporation, 'owner' means an owner or
director of a corporation that owns the property being offered for sale
provided that the corporation is registered to do business in the State.
Section 40-6-20. (A) This chapter applies to all
auctions held in this State except the following:
(1) auctions conducted by the owner of all of the
goods being offered or his attorney, unless the owner's regular course
of business includes engaging in the sale of goods or real estate by
means of auction or unless the owner originally acquired the goods
for the purpose of resale;
(2) auctions conducted by or under the direction
of a public authority;
(3) auctions pursuant to a judicial order;
(4) sales required by law to be at auction;
(5) auctions conducted on behalf of a charitable,
civic, or religious organization if the person conducting the sale
receives no compensation;
(6) auctions of motor vehicles among motor
vehicle dealers if conducted by an auctioneer licensed under this
chapter;
(7) auctions by a trustee pursuant to a valid
power of sale;
(8) auctions sponsored by purebred livestock
(beef cattle, swine, horses, and sheep) associations and purebred
livestock breeder farm sales to the extent that purebred livestock
auctioneers, upon proof to the commission that they are qualified
purebred livestock auctioneers, are exempt from the examination and
the Auctioneer Recovery Fund requirements provided for in this
chapter for the purpose of conducting purebred livestock auctions,
but not from the licensing and license fee provisions of this chapter;
(9) auctions sponsored by tobacco auctioneers
to the extent that tobacco auctioneers, upon proof to the commission
that they are qualified tobacco auctioneers, are exempt from the
examination and the fund requirements provided for in this chapter
for the purpose of conducting tobacco auctions but not from the
licensing and license fee provisions of this chapter.
(B) The exceptions provided for in items (2), (4),
and (5) of subsection (A) do not apply to:
(1) a person or entity engaged in the business of
organizing, arranging, or conducting auction sales for compensation
pursuant to item (2), (4), or (5) of subsection (A); or
(2) a person or entity conducting a sale pursuant
to item (2), (4), or (5) of subsection (A) who is licensed under this
chapter or licensed in any other state.
(C) If an auction is conducted that is exempt from
this chapter, no claim may be made against or paid from the fund.
Section 40-6-30. There is created the South Carolina
Auctioneers' Commission composed of five members to be appointed
by the Governor. The Governor shall consider nominations from any
individual, group, or association. The terms of the members are for
three years and until their successors are appointed and qualify. Any
vacancy must be filled in the manner of the original appointment for
the unexpired portion of the term only.
Section 40-6-40. At least three members of the commission
must be licensed auctioneers and must be active in the auction
profession. At least one member must not be connected with the
auction business. Action taken by the commission may be taken by
a vote of three members. A quorum consists of three members. The
members shall elect from among themselves a chairman who serves
for one year and until his successor is elected and qualifies. No
member may serve more than two successive terms as chairman. The
members of the commission shall receive the same per diem, mileage,
and subsistence provided by law for members of state boards,
committees, and commissions. The Director of the Department of
Labor, Licensing, and Regulation, pursuant to Section 40-73-15, shall
employ an executive director who must have a minimum of five years
experience as an auctioneer, an investigator or investigators, and
other employees necessary to carry out the duties prescribed by this
chapter. Employees serve at the pleasure of the Director of the
Department of Labor, Licensing, and Regulation. The commission
shall issue, suspend, and revoke licenses for auctioneers and
apprentice auctioneers provided in this chapter and may promulgate
regulations necessary to carry out its provisions.
Section 40-6-45. In hiring an executive director, the
Director of the Department of Labor, Licensing, and Regulation may
waive the experience requirement provided in Section 40-6-40.
Section 40-6-50. Unless the auction is exempt under
Section 40-6-20, no person shall sell or offer to sell goods or real
estate at auction in this State or perform an act for which an
auctioneer or apprentice auctioneer license is required unless the
person holds a currently valid license issued under this chapter. No
individual, partnership, corporation, or any other legal or commercial
entity shall sell or offer to sell goods or real estate at auction unless
the entity holds a currently valid auction firm license issued under
this chapter, but no such entity is required to hold an auction firm
license to sell livestock or tobacco at auction so long as those sales
are regulated by another state agency. However, if the commercial
entity consists of or is entirely owned by only one individual
auctioneer who holds a currently valid individual auctioneer license,
that commercial entity is not required to hold an auction firm license.
Section 40-6-60. (A) No person may be licensed
under this chapter as an apprentice auctioneer or auctioneer or receive
an auction firm license if the person:
(1) is under eighteen years of age;
(2) has been convicted of a felony or any other
crime involving fraud or moral turpitude within the preceding five
years; for purposes of this item, a person has been convicted if the
person has pled guilty, pled nolo contendere, or been found guilty
after a trial; or
(3) has had an auctioneer, apprentice auctioneer,
or auction firm license revoked within the preceding five years.
(B) No person may be issued an auctioneer,
apprentice auctioneer, or auction firm license unless the person has
paid a fee to the Auctioneer Recovery Fund as required by Section
40-6-200 and the person has provided a criminal history conviction
record from the South Carolina Law Enforcement Division and if the
person is a resident of another state, from an equivalent agency in
that state.
(C) No license revoked under this chapter may be
reinstated except upon an affirmative vote of a majority of the
members of the commission.
(D) The credit record and auctioneering license
disciplinary history of an applicant may be considered by the
commission in determining whether or not to issue or renew a
license. A fee of ten dollars must be paid to the commission for the
applicant's credit investigation.
Section 40-6-70. An applicant for an apprentice auctioneer
license shall submit a written application on a form approved by the
commission. To receive a license the applicant shall take a written
examination approved by the commission and perform on it to the
satisfaction of the commission. The examination must test the
applicant's understanding of the law relating to auctioneers and
auctions, ethical practices for auctioneers, and the mathematics
applicable to the auctioneer business. The examination must be given
at least twice a year in Columbia and at other times and places the
commission designates. However, no person may take the
examination within six months after having failed it a second time.
An apprentice auctioneer application and license must name a
licensed auctioneer to serve as the supervisor of the apprentice. No
apprentice auctioneer may enter into an agreement to conduct an
auction or conduct an auction without the express approval of the
apprentice auctioneer's supervisor. The supervisor regularly shall
review the records the apprentice is required to maintain and see that
they are accurate and current.
Section 40-6-80. No person may be licensed as an
auctioneer unless the person has held an apprentice auctioneer
license, served as an apprentice auctioneer for the preceding year, and
has taken a written examination approved by the commission and
performed on it to the satisfaction of the commission. The
examination must test the applicant's understanding of the law
relating to auctioneers and auctions, ethical practices for auctioneers,
the mathematics applicable to the auctioneer business, and other
matters relating to auctions the commission considers appropriate.
The examination must be given at least twice a year in Columbia and
at other times and places the commission designates. However, no
person may take the examination within six months after having
failed it a second time.
A person who successfully has completed the equivalent of
at least eighty hours of classroom instruction in a course in
auctioneering at an institution approved by the commission may be
licensed as an auctioneer without holding an apprentice license and
serving as an apprentice for one year. He shall take the examination
required by this section and perform on it to the satisfaction of the
commission.
An applicant for an auctioneer license shall submit a
written application on a form approved by the commission. If the
applicant has been licensed previously as an apprentice auctioneer,
the application must contain an evaluation by the applicant's
supervisor of his performance as an apprentice auctioneer. If the
applicant is exempted from apprenticeship because he has completed
the equivalent of at least eighty hours of classroom instruction in
auctioneering, the application must contain a transcript of his course
work in auctioneering. The commission may require verification of
information included in an application for an auctioneer license.
Section 40-6-85. (A) An auction firm must be
licensed as an auction business even though no owner or officer of
that business acts as an auctioneer. To be licensed an auction firm
must pay a fee to the Auctioneer Recovery Fund as required by
Section 40-6-200 and must pay other fees as determined by the
commission.
(B) fore an auction firm license is issued, the
person designated as the applicant shall take a written examination
approved by the commission and demonstrate to the satisfaction of
the commission a thorough understanding of the law relating to the
conduct of the auction business and other matters the commission
considers appropriate. An individual who is licensed as an auctioneer
and who is the designated person applying for an auction firm license
is not required to take the auction firm examination. Licensed real
estate brokers and real estate firms may be exempt from the auction
firm examination if they employ or associate themselves with a
licensed auctioneer to handle those aspects of the transactions
peculiar to the auctioneer profession. A person or entity licensed as
an auction firm in good standing on this act's effective date is not
required to take an examination in order to maintain or to renew an
auction firm license, if the license does not expire or lapse and is not
suspended or revoked by the commission.
Section 40-6-90. (A) A license issued under this
chapter is valid from July first of the year issued or from the date
issued, whichever is later, through the following June thirtieth unless
revoked or suspended pursuant to this chapter or a regulation
promulgated under this chapter. A license may be renewed annually
except that an apprentice auctioneer license may not be renewed
more than one time. No examination is required for renewal of an
auctioneer, apprentice auctioneer, or auction firm license if the
application for renewal is made within ninety days of the expiration
of the license.
(B) When an auctioneer licensee applies for license
renewal, the licensee shall submit with the renewal form proof, in a
form acceptable to the commission, that the licensee has acquired
commission-approved continuing education of at least four hours
within the previous twelve months. Continuing education is not
required of apprentice auctioneers and auction firm license holders
unless the firm owner is a licensed auctioneer.
(C) The renewal of a lapsed license is not
retroactive and does not limit the authority of the courts or the
commission to take disciplinary action against a licensee who
engages in the auction profession without a current license.
Section 40-6-110. An individual, partnership, corporation,
or any other legal or commercial entity, upon application in a form
approved by the commission, may be licensed as an auction firm.
Section 40-6-120. The commission shall publish at least
once a year a list of names and address of all persons, partnerships
and corporations holding valid apprentice auctioneer or auctioneer
licenses or designated as licensed auctioneer partnerships or
corporations.
Section 40-6-130. (A) A person who holds a valid
auctioneer license in another state may apply for and be granted a
South Carolina license if the requirements of that person's resident
state, as determined by the commission, are at least substantially
equivalent to the requirements of this chapter, if the resident state
extends similar reciprocal privileges to auctioneers who are residents
and licensed by this State.
(B) An applicant under this section shall submit an
application and other documentation and proof of eligibility for
licensure as may be required by the commission but is not required
to take the examination required under Section 40-6-80.
(C) An applicant shall pay the fee required in
Section 40-6-140 and shall file with the commission an irrevocable
consent that service on the commission is sufficient service or
process for actions against the applicant by a resident of this State
arising out of the applicant's auctioneering activities.
(D) An applicant under this section shall pay the
fee required under Section 40-6-200 whether or not the applicant
currently is bonded as an auctioneer or apprentice auctioneer in the
applicant's home state. A license issued under this section must be
marked to indicate that its holder is a nonresident reciprocal licensee.
(E) A license issued pursuant to this section is
valid from the date of issuance to the following June thirtieth and
may be renewed from year to year unless suspended or revoked
pursuant to this chapter or a regulation promulgated under this
chapter, if the licensee continues to be a resident of and licensed in
good standing in the licensee's resident state.
(F) A person licensed under this section shall
notify the commission of the lapse, surrender, suspension, revocation,
or any other loss of license in the person's resident state. The notice
must be sent to the commission, by certified mail, return receipt
requested, within ten days of the occurrence.
(G) A license issued under this section immediately
must be suspended or revoked based upon the occurrence of any of
the events set out in subsection (E) or based upon a change of
principal state residence of the reciprocal licensee.
(H) A person whose license is terminated as a
result of a change of principal state residence may reapply for
reciprocal status if the person is otherwise eligible for a license based
upon the new state residence and submits with the application the
fees required by the commission.
(I) Notwithstanding any other provision of this
section, a reciprocal licensee who subsequently becomes a
domiciliary of this State may request by application the reciprocal
license be converted to that of an in-state licensee without having to
take the examination required by Section 40-6-80. The commission
may require an applicant to pay processing and application fees it
considers appropriate.
Section 40-6-140. A person licensed as an auctioneer shall
pay an annual license fee to the commission. Funds derived under
this chapter must be paid to the State Treasurer who shall keep them
in the manner provided for other agencies and boards of the State.
The commission may establish license and examination fees by
regulation.
Section 40-6-145. It is unlawful to conduct or advertise that
an auction is 'absolute' if minimum opening bids are required or
other conditions are placed on the sale which limit the sale other than
to the highest bidder.
Section 40-6-150. Requirement of written agreement with
owner of property to be sold; records of goods to be sold; inspection
of contracts and records; carrying pocket card license.
(A) No licensee may conduct an auction in this
State without first having a written agreement with the owner of any
property to be sold. The agreement shall contain the terms and
conditions upon which the licensee received the goods for sale. The
licensee shall provide the owner with a signed copy of the agreement
and shall keep at least one copy for three years from the date of the
agreement. A written agreement is not required for a sale at auction
if the sale is made at an auction house or similar place where
members of the public are generally offered the opportunity to
present goods for sale. Copies of all contracts must be made
available to the commission or its designated agent upon request.
(B) A licensee shall maintain accurate records upon
receipt of goods for auction and before their sale, which shall include
the name and address of the person who employed the licensee to sell
the goods at auction and the name and address of the owner of the
goods to be sold. These records must be open for inspection by the
commission or its designated agent upon request.
(C) A licensee shall have his pocket card license in
his possession at each auction he conducts.
Section 40-6-155. (A) A licensee who handles the proceeds
of an auction shall maintain a trust or escrow account with an insured
bank or savings and loan association and shall deposit in this account
within three business days all funds received for the benefit of
another person, unless otherwise required by law or the owner or
consignor of the property auctioned is paid immediately after the
sale.
(B) Upon issuance or renewal of a license, the
licensee must provide the commission with the name of the bank and
the account number of the trust or escrow account in which the funds
of others are maintained and authorization permitting the examination
of the account by the commission or its authorized representative,
unless the licensee has provided certification to the commission that
funds are paid within three business days. A licensee must notify the
commission by certified mail, return receipt requested, of a change
of bank, account number, or location of the trust or escrow account
and, at that time, shall complete the required authorization permitting
examination of the account by the commission or its authorized
representative.
(C) A licensed auctioneer or licensed apprentice
auctioneer in this State who works directly for a licensed auction firm
or who works directly for another licensed auctioneer who maintains
an active escrow account may use that escrow account and number
in all applications for licensure or renewal, if the escrow account is
used solely for the purpose of holding funds of others in relation to
auctions.
(D) A licensee shall maintain complete records for
at least three years showing the deposit, maintenance, and withdrawal
of trust or escrow funds. The commission or its designated agent
may inspect these records periodically without prior notice.
Section 40-6-156. The sale at auction of any property other
than the property of a specified deceased person or the property of a
specified living person's estate at any auction conducted or
advertised as an estate sale only is prohibited. Items other than those
of the specified estate may be sold at the sale only if all
advertisements of the sale contain specific information detailing
which items do not belong to the estate.
Section 40-6-160. (A) Upon its own motion or a
verified complaint and a prima facie showing of a violation of this
chapter or a regulation promulgated under this chapter, the
commission may investigate the actions of an auctioneer, apprentice
auctioneer, auction firm, or a person who has unlawfully assumed to
act in such capacity within this State. Upon notice and a hearing the
commission may deny, suspend, or revoke a license issued under this
chapter and assess a fine if the licensee is found by the commission
to have:
(1) violated this chapter or a regulation
promulgated under this chapter;
(2) engaged in a continued and flagrant course
of misrepresentation or made false promises or an employee of the
licensee or someone acting on behalf of and with the licensee's
consent made false promises;
(3) failed to account for or to pay over within a
reasonable time, not to exceed thirty days, money belonging to
another which has come into the licensee's possession through an
auction sale;
(4) used misleading or untruthful advertising;
(5) engaged in conduct in connection with a
sales transaction which demonstrates bad faith or dishonesty;
(6) knowingly used false bidders, cappers, or
pullers or knowingly made a material false statement or
representation;
(7) been convicted of a felony or an act
involving fraud or moral turpitude;
(8) wilfully failed to properly and fully
complete an application or made a false statement or gave false
information in connection with an application for a license or renewal
or reinstatement of a license or an investigation by the commission
or the commission's designated agent;
(9) failed to maintain or to deposit in a trust or
escrow account in an insured bank or savings and loan association
within three business days funds received for another person through
sale at auction, unless otherwise required by law;
(10) failed to pay a fine assessed or ordered by
the commission under Section 40-6-175;
(11) wilfully failed to properly make a
disclosure or to provide documents or information required by this
chapter or the commission;
(12) demonstrated lack of financial
responsibility.
The commission may issue a written or oral reprimand for
misconduct as set out in this subsection when, in its judgment, the
misconduct does not warrant suspension or revocation of a license.
(B) The commission may conduct an investigation
which it considers necessary to determine whether a person has
violated this chapter or an order issued or a regulation promulgated
under this chapter or to aid in the enforcement of this chapter or
regulations promulgated under this chapter. The commission may
require or permit a person to file a statement in writing, under oath or
otherwise as the commission determines, as to facts and
circumstances concerning the matter being investigated.
(C) For the purpose of an investigation or
proceeding under this chapter, the commission or its designated agent
may administer oaths and upon its own motion or upon request of any
party, shall subpoena witnesses, compel their attendance, take
evidence, and require the production of any matter which is relevant
to the investigation, including the existence, description, nature,
custody, condition, and location of any books, documents, or other
tangible items and the identity and location of persons having
knowledge of relevant facts or any other matter reasonably calculated
to lead to the discovery of material evidence. Upon failure to obey
a subpoena or to answer questions propounded by the commission or
its designated agent and upon reasonable notice to all persons
affected, the commission through the Attorney General may apply to
the circuit court for an order compelling compliance.
(D) The authority of the commission to revoke or
suspend a licensee for violation of this chapter or a regulation
promulgated under this chapter includes the authority to place a
licensee on probation for a period not to exceed two years and upon
conditions to be determined by the commission.
(E) The commission may:
(1) issue an order requiring a person to cease
and desist from any unlawful practice and to take action as the
commission considers necessary to carry out the purposes of this
chapter if after notice and hearing, the commission determines that a
person has:
(a) violated this chapter;
(b) directly or through an agent or employee
knowingly engaged in false, deceptive, or misleading practices in the
sale of goods or real estate at auction, including advertising and
promotions;
(c) violated an order or regulation of the
commission;
(2) make findings of fact in writing that the
public interest will be irreparably harmed by delay in issuing an order
and in that case may issue a temporary order. Before issuing the
temporary cease and desist order, the commission or its designated
agent, whenever possible by telephone or otherwise, shall notify the
affected person of the commission's intent to issue a cease and desist
order. A temporary cease and desist order shall include a provision
that upon request a hearing must be held promptly to determine
whether or not the order shall become permanent.
Section 40-6-170. A person who violates the provisions of
this chapter is guilty of a misdemeanor and, upon conviction, must
be:
(1) fined not more than five hundred dollars or
imprisoned not more than six months for a first offense;
(2) fined not more than one thousand dollars or
imprisoned not more than one year for a second offense;
(3) fined not more than two thousand five
hundred dollars or imprisoned not more than three years for a third
or subsequent offense.
Section 40-6-175. After a hearing as provided for in Section
40-6-160 and upon a finding by the commission that a person has
violated this chapter or a regulation promulgated pursuant to this
chapter, the commission may order the person to pay a civil fine of
not less than one hundred dollars and not more than five thousand
dollars to be assessed and collected by the commission. These fines
are in addition to any other sanction imposed by the commission and
must be deposited in the state general fund.
Section 40-6-180. No license may be denied, suspended, or
revoked, and no other disciplinary action against a licensee may be
taken, until after fifteen days' notice has been given in writing to the
licensee or applicant stating the ground of the proposed action and
until a public hearing has been held at which he shall have
opportunity to be heard, present testimony in his behalf, and be
confronted by witnesses against him, if he requests the hearing. The
commission, in its discretion, may grant the accused a temporary
permit to auction pending the hearing and determination.
Determinations must be made and the licensee or applicant notified
of them within five days after the hearing. Any auctioneer notified of
a suspension may request a rehearing within twenty days from the
date of notification of determination. Upon a rehearing and
continued denial, suspension, or revocation of license, or other
disciplinary action, or upon a refusal for rehearing, the party is
entitled to appeal his case to an administrative law judge as provided
under Article 5 of Chapter 23 of Title 1 (the Administrative
Procedures Act). The commission or its authorized representatives
may subpoena witnesses and documents for any hearing and may
administer oaths to the witnesses.
Section 40-6-190. Notwithstanding the provisions of Act 283
of 1975, or any other provision of law, municipal corporations may
not enact ordinances to provide for the licensing of auctioneers.
Section 40-6-200. (A) The 'Auctioneer Recovery
Fund' is created to be maintained by the commission for the payment
of claims to persons injured by licensees under this chapter. Monies
in the fund must be held and carried forward by the State Treasury
separate from the general fund. At least one hundred thousand dollars
for recovery and guaranty purposes must be maintained in the fund.
Fund monies may be invested and reinvested by the State Treasurer
in interest bearing accounts, interest accruing to the fund. Sufficient
liquidity must be maintained so that there are monies available to
satisfy claims processed through the commission. Expenditures from
the fund must be made in accordance with this chapter without
legislative appropriation. Warrants for expenditures must be drawn
by the Comptroller General pursuant to claims approved and signed
by the chairman of the commission.
(B) To initially establish the fund and when monies,
including principal and interest, are less than forty-five thousand
dollars at the end of the fiscal year after payment of claims and
expenses, a licensee shall pay, in addition to the license fees required
under this chapter, a fund contribution fee determined by the
commission. After the fund is initially established a new applicant
for licensure also shall pay a fund contribution fee. However, any fee
assessed under this subsection may not exceed fifty dollars a year.
(C) The commission may use contents of the fund
in excess of one hundred thousand dollars to:
(1) promote education and research in the
auctioneer profession in order to benefit persons licensed under this
chapter and to improve the efficiency of the profession;
(2) underwrite educational seminars, training
centers, and other forms of educational projects for the use and
benefit of licensees;
(3) sponsor, contract for, or underwrite
education and research projects in order to advance the auctioneer
profession in South Carolina; and
(4) cooperate with associations of auctioneers
or other groups in order to promote the enlightenment and
advancement of the auctioneer profession in South Carolina.
(D) If monies, including principal and interest, in
the fund exceed one hundred twenty-five thousand dollars at the end
of the fiscal year after payment of claims, expenses, and educational
program funding the amount in excess must be deposited in the state
general fund.
Section 40-6-210. (A) A person aggrieved by the
conduct of a licensee may apply for monies from the fund if the
following conditions have been met:
(1) The facts giving rise to the claim are based
on a specific violation of this chapter or related regulations.
(2) The applicant has made demand upon the
licensee by certified mail, return receipt requested, for his actual
damages, and demand has been refused or ignored.
(3) The applicant is not:
(a) licensed under this chapter; or
(b) a party jointly responsible for the claim.
(4) Application for recovery has been made not
later than one year from the date of discovery of the loss.
(B) Application for monies must be made under
oath and upon a form the commission prescribes. It must contain the
following minimum information:
(1) name and address of the applicant;
(2) name and address of the licensee and his last
known working address;
(3) amount of monies sought and evidence
supporting the claim;
(4) copies of complaints and other legal process
initiated;
(5) disclosure of partial satisfaction received,
offered, or otherwise available from the licensee, a bond, a policy of
insurance or other source;
(6) detailed statement of the events precipitating
the loss and documents and other evidence supporting the claim.
(C) Upon receiving a claim in proper form, the
commission shall forward the claim by certified mail, return receipt
requested, to the last known address of the licensee. The licensee
within thirty days shall file a verified answer to the claim. If no
answer is filed within thirty days, the licensee is in default, and the
commission shall schedule a hearing on the claim. If the licensee
files a timely answer, the commission shall investigate the claim for
not more than sixty days and promptly schedule a hearing on the
claim. The licensee, commission, and claimant may present
evidence and question and cross-examine witnesses as parties to the
hearing.
(D) Failure of the applicant to comply with this
section is a waiver of rights under it.
Section 40-6-220. (A) Applications for payment
from the fund must be heard and decided by a majority of the
members of the commission. After a hearing, if the commission finds
that the claim must be paid from the fund, the commission or an
administrative law judge as provided under Article 5 of Chapter 23
of Title 1, if appealed, shall enter an order requiring payment in
accordance with the limitations in this chapter. Subject to
commission approval, a claim based upon an application for monies
may be compromised. However, the commission is not bound by the
compromise or stipulation of the licensee.
(B) Upon payment of a claim, the license of the
person against whom the claim was applied is suspended or revoked,
as the commission determines. The licensee must not be issued
another license until he repays the monies from his claim to the fund,
including interest at the rate of eight percent a year. Nothing in this
section prevents the commission or other authority from pursuing
other remedies at law or equity.
(C) An applicant receiving monies from the fund
shall subrogate rights relative to the claim to the commission to the
extent of monies paid, including interest, and shall cooperate with the
commission in the prosecution of the subrogated claim. Amounts
recovered against the licensee or other responsible parties must be
deposited into the fund, less costs and expenses of collection.
Section 40-6-230. Payments from the fund are limited as
follows:
(1) Only the applicant's actual damages may be
paid from the fund. No applicant may recover punitive, special, or
consequential damages or attorney's fees.
(2) The fund is not liable for more than ten
thousand dollars for each transaction, regardless of the number of
persons aggrieved.
(3) The liability of the fund may not exceed in
the aggregate twenty thousand dollars for one licensee in one
calendar year.
(4) If the maximum liability of the fund is
insufficient to pay in full the valid claims of aggrieved persons
whose claims relate to the same transaction or to the same licensee,
the amount for which the fund is liable must be distributed among the
claimants in a ratio that their respective claims bear to the total claims
or in a manner the commission considers equitable. The commission
in its sole discretion may join in one action claims having a common
factual basis so that an equitable distribution from the fund may be
achieved.
(5) A party aggrieved and awarded payment by
a final commission decision has a vested right for payment. Claims
against the fund must be made in the same order as the awards were
authorized. If claims against the fund exceed the monies in it, the
commission shall satisfy unpaid claims as soon as sufficient monies
are deposited. An award is not a claim against the State if it cannot
be paid due to a lack of monies in the fund.
Section 40-6-5. Unless otherwise provided for in this chapter,
Article 1, Chapter 1 of Title 40 applies to auctioneers regulated by
the Department of Labor, Licensing, and Regulation. However, if
there is a conflict between this chapter and Article 1, Chapter 1 of
Title 40, the provisions of this chapter control.
Section 40-6-10. (A) There is created the South Carolina
Auctioneers' Commission composed of five members to be appointed
by the Governor in accordance with Section 40-1-50. The Governor
shall consider nominations from any individual, group, or
association. The terms of the members are for three years and until
their successors are appointed and qualify. A vacancy must be filled
in the manner of the original appointment for the unexpired portion
of the term only.
(B) At least three members of the commission must be licensed
auctioneers and must be active in the auction profession. At least one
member must not be connected with the auction business. Three
members constitute a quorum. The members shall elect from among
themselves a chairman who serves for one year and until a successor
is elected and qualifies. No member may serve more than two
successive terms as chairman. The members of the commission shall
receive the same per diem, mileage, and subsistence provided by law
for members of state boards, committees, and commissions. The
Director of the Department of Labor, Licensing, and Regulation,
pursuant to Section 40-73-15, shall employ an executive director, an
investigator or investigators, and other employees necessary to carry
out the duties prescribed by this chapter. Employees serve at the
pleasure of the Director of the Department of Labor, Licensing, and
Regulation.
(C) Any business conducted by the commission must be by a
positive majority vote.
Section 40-6-20. For the purposes of this chapter, unless the
context clearly indicates otherwise:
(1) 'Absolute auction' means the sale of real or personal
property at auction whereby every item offered from the block is sold
to the highest bidder without reserve and without the requirement of
a minimum bid or other conditions which limit the sale other than to
the highest bidder.
(2) 'Auction' means the sale of goods or real estate by means of
exchanges between an auctioneer and members of an audience, the
exchanges consisting of a series of invitations for offers made by the
auctioneer, offers by members of the audience, and the acceptance by
the auctioneer of the highest or most favorable offer.
(3) 'Auction firm' means a sole proprietorship of which the
owner is not a licensed auctioneer or a partnership, association, or
corporation, not otherwise exempt from this chapter, that sells,
directly or through agents, real or personal property at auction or that
arranges, sponsors, manages, conducts, or advertises auctions or that
in the regular course of business uses or allows the use of its facilities
for auctions. This term includes an auction firm whether or not the
owner or an officer of the business acts as an auctioneer.
(4) 'Auctioneer' means a person who conducts or offers to
conduct auctions, including apprentice auctioneers.
(5) 'Estate sale' means the sale at auction of property of a
specified deceased person or the property of a specified living
person's estate but does not mean the sale at auction of property of
any other person.
(6) 'Fund' means the Auctioneer Recovery Fund established
pursuant to Section 40-6-330.
(7) 'Owner' means the bona fide owner of the property being
offered for sale. In the case of a partnership, 'owner' means a general
partner in the partnership that owns the property being offered for
sale; if it is a limited partnership, the partnership must have filed a
certificate of limited partnership as required by Section 33-42-210.
In the case of a corporation, 'owner' means an owner or director of
the corporation that owns the property being offered for sale, and the
corporation must be registered to do business in this State.
(8) 'Positive majority vote' means a majority vote of the entire
membership of the commission, reduced by any vacancies existing
at the time.
Section 40-6-30. It is unlawful for a person to practice as an
auctioneer in this State without being licensed in accordance with this
chapter, except as provided for in Section 40-6-370.
Section 40-6-50. (A) The Department of Labor, Licensing, and
Regulation shall provide all administrative, fiscal, investigative,
inspectional, clerical, secretarial, and license renewal operations and
activities of the commission in accordance with Section 40-1-50.
(B) The commission is the sole licensing authority for all licenses
issued pursuant to this chapter and has the exclusive authority to
discipline licensees.
(C) A person licensed as an auctioneer shall pay an annual license
fee to the commission. Funds derived under this chapter must be paid
to the State Treasurer who shall keep them in the manner provided
for other agencies and boards of the State. The commission shall
establish license and examination fees by regulation.
Section 40-6-60. The commission may adopt rules governing its
proceedings and may promulgate regulations necessary to carry out
the provisions of this chapter.
Section 40-6-70. The commission may conduct an investigation
which it considers necessary to determine whether a person has
violated this chapter or an order issued or a regulation promulgated
under this chapter or to aid in the enforcement of this chapter or
regulations promulgated under this chapter. The commission may
require or allow a person to file a statement in writing, under oath or
otherwise as the commission determines, as to facts and
circumstances concerning the matter being investigated.
Section 40-6-80. For the purpose of an investigation or
proceeding under this chapter, the commission or its designated agent
may administer oaths and upon its own motion or upon request of any
party, shall subpoena witnesses, compel their attendance, take
evidence, and require the production of any matter which is relevant
to the investigation, including the existence, description, nature,
custody, condition, and location of any books, documents, or other
tangible items and the identity and location of persons having
knowledge of relevant facts or any other matter reasonably calculated
to lead to the discovery of material evidence. Upon failure to obey
a subpoena or to answer questions propounded by the commission or
its designated agent and upon reasonable notice to all persons
affected, the commission through the Attorney General may apply to
the circuit court for an order compelling compliance.
Section 40-6-90. No license may be denied, suspended, or
revoked and no other disciplinary action against a licensee may be
taken until fifteen days' notice has been given in writing to the
licensee or applicant stating the grounds for the proposed action and
until a hearing, if requested by the licensee or applicant, has been
held. At the hearing the licensee or applicant must have an
opportunity to be heard, present testimony in his behalf, and be
confronted by witnesses against him. The commission may grant the
licensee or applicant a temporary permit to auction pending a final
decision on the matter. The commission must rule on the matter and
the licensee or applicant notified within five days after the hearing.
An auctioneer notified of a suspension may request a rehearing
within twenty days from the date of notification. Upon a rehearing
and continued denial, suspension, or revocation of a license or other
disciplinary action or upon a refusal for rehearing, the licensee or
applicant may appeal the decision to an administrative law judge
pursuant to the Administrative Procedures Act, Article 5, Chapter 23,
Title 1.
Section 40-6-100. (A) The commission may:
(1) issue an order requiring a person to cease and desist from
any unlawful practice and to take action as the commission considers
necessary to carry out the purposes of this chapter if after notice and
hearing, the commission determines that a person has:
(a) violated this chapter;
(b) directly or through an agent or employee knowingly
engaged in false, deceptive, or misleading practices in the sale of
goods or real estate at auction, including advertising and promotions;
(c) violated an order or regulation of the commission;
(2) make findings of fact in writing that the public interest will
be irreparably harmed by delay in issuing an order and in that case
may issue a temporary order. Before issuing the temporary cease and
desist order, the commission or its designated agent, whenever
possible by telephone or otherwise, shall notify the affected person
of the commission's intent to issue a cease and desist order. A
temporary cease and desist order shall include a provision that, upon
request, a hearing must be held promptly to determine whether or not
the order shall become permanent.
Section 40-6-110. (A) In addition to the grounds of misconduct
provided for in Section 40-1-110, the commission may take action,
pursuant to Section 40-6-210, against a licensee or a person who has
unlawfully assumed to act in the capacity as an auctioneer if the
person or licensee is found by the commission to have:
(1) violated this chapter or a regulation promulgated under
this chapter;
(2) engaged in a continued and flagrant course of
misrepresentation or made false promises or if an employee of the
licensee or someone acting on behalf of and with the licensee's
consent made false promises;
(3) failed to account for or to pay over within a reasonable
time, not to exceed thirty days, money belonging to another which
has come into the licensee's possession through an auction sale;
(4) used misleading or untruthful advertising;
(5) engaged in conduct in connection with a sales transaction
which demonstrates bad faith or dishonesty;
(6) knowingly used false bidders, cappers, or pullers or
knowingly made a material false statement or representation;
(7) been convicted of a felony or an act involving fraud or
moral turpitude;
(8) wilfully failed to properly and fully complete an
application or made a false statement or gave false information in
connection with an application for a license or renewal or
reinstatement of a license or an investigation by the commission or
the commission's designated agent;
(9) failed to maintain or to deposit in a trust or escrow
account in an insured bank or savings and loan association within
three business days funds received for another person through sale at
auction, unless otherwise required by law;
(10) failed to pay a fine assessed or ordered by the commission
under Section 40-6-210;
(11) wilfully failed to properly make a disclosure or to provide
documents or information required by this chapter or the commission;
(12) demonstrated lack of financial responsibility.
Section 40-6-115. The commission has jurisdiction over the
actions of licensees and former licensees as provided for in Section
40-1-115.
Section 40-6-120. Following a hearing conducted in accordance
with this chapter and upon the commission finding grounds for
misconduct, the commission, in addition to the authority granted to
it pursuant to Section 40-1-120, may deny, suspend, revoke, or
restrict a license and may assess a fine in accordance with Section
40-6-210. The authority of the commission to revoke or suspend a
license for violation of this chapter or a regulation promulgated under
this chapter includes the authority to place a licensee on probation for
a period not to exceed two years and upon conditions to be
determined by the commission.
The commission may issue a written or oral reprimand for
misconduct as set out in this chapter when, in its judgment, the
misconduct does not warrant suspension or revocation of a license.
Section 40-6-130. As provided for in Section 40-1-130 the
commission may deny licensure to an applicant based on the same
grounds for which the board may take disciplinary action against a
licensee.
Section 40-6-140. A license may be denied based on a person's
prior criminal record as provided for in Section 40-1-140.
Section 40-6-150. A licensee under investigation for a violation of
this chapter or a regulation promulgated under this chapter may
voluntarily surrender the license in accordance with Section
40-1-150.
Section 40-6-160. A person aggrieved by a final action of the
commission may seek review of the decision in accordance with
Section 40-1-160.
Section 40-6-170. A person found in violation of this chapter or
regulations promulgated under this chapter may be required to pay
costs associated with the investigation and prosecution of the case in
accordance with Section 40-1-170.
Section 40-6-180. All costs and fines imposed pursuant to this
chapter must be paid in accordance with and are subject to the
collection and enforcement provisions of Section 40-1-180.
Section 40-6-190. Investigations and proceedings conducted under
the provisions of this chapter are confidential and all communications
are privileged as provided for in Section 41-1-190.
Section 40-6-200. A person who violates the provisions of this
chapter is guilty of a misdemeanor and, upon conviction, must be:
(1) fined not more than three hundred dollars or imprisoned
not more than sixty days for a first offense;
(2) fined not more than one thousand dollars or imprisoned
not more than one year for a second offense;
(3) fined not more than two thousand five hundred dollars or
imprisoned not more than three years for a third or subsequent
offense.
Section 40-6-210. After a hearing, as provided for in this chapter,
and upon a finding by the commission that a person has violated this
chapter or a regulation promulgated pursuant to this chapter, the
commission may order the person to pay a civil fine of not less than
one hundred dollars and not more than five thousand dollars to be
assessed and collected by the commission. These fines are in
addition to any other sanction imposed by the commission.
Section 40-6-220. (A) No person may be licensed under this
chapter as an apprentice auctioneer or auctioneer or receive an
auction firm license if the person:
(1) is under eighteen years of age;
(2) has been convicted of a felony or any other crime
involving fraud or moral turpitude within the preceding five years;
for purposes of this item, a person has been convicted if the person
has pled guilty, pled nolo contendre, or been found guilty after a trial;
or
(3) has had an auctioneer, apprentice auctioneer, or auction
firm license revoked within the preceding five years.
(B) No person may be issued an auctioneer, apprentice auctioneer,
or auction firm license unless the person has paid a fee to the
Auctioneer Recovery Fund as required by Section 40-6-350 and the
person has provided a criminal history conviction record from the
South Carolina Law Enforcement Division.
(C) No license revoked under this chapter may be reinstated except
upon a positive majority vote.
(D) The credit record and auctioneering license disciplinary history
of an applicant may be considered by the commission in determining
whether or not to issue or renew a license. A fee of ten dollars must
be paid to the commission for the applicant's credit investigation.
Section 40-6-225. An applicant for an apprentice auctioneer
license shall submit a written application on a form approved by the
commission. To receive a license the applicant must achieve a
passing score, as established by the commission, on a written
examination approved by the commission. The examination must test
the applicant's understanding of the law relating to auctioneers and
auctions, ethical practices for auctioneers, and the mathematics
applicable to the auctioneer business. The examination must be given
at least twice a year in Columbia and at other times and places the
commission designates. However, no person may take the
examination within six months after having failed it a second time.
An apprentice auctioneer application and license must name a
licensed auctioneer to serve as the supervisor of the apprentice. No
apprentice auctioneer may enter into an agreement to conduct an
auction or conduct an auction without the express approval of the
apprentice auctioneer's supervisor. The supervisor regularly shall
review the records that the apprentice is required to maintain to
ensure that they are accurate and current.
Section 40-6-230. (A) To be licensed as an auctioneer a person
must have held an apprentice auctioneer license, served as an
apprentice auctioneer for the preceding year, and achieved a passing
score, as established by the commission, on a written examination
approved by the commission. The examination must test the
applicant's understanding of the law relating to auctioneers and
auctions, ethical practices for auctioneers, the mathematics applicable
to the auctioneer business, and other matters relating to auctions the
commission considers appropriate. The examination must be given
at least twice a year in Columbia and at other times and places the
commission designates. However, no person may take the
examination within six months after having failed it a second time.
(B) A person who successfully has completed the equivalent of at
least eighty hours of classroom instruction in a course in
auctioneering at an institution approved by the commission and who
has met the examination requirement of subsection (A) may be
licensed as an auctioneer without holding an apprentice license and
serving as an apprentice for one year.
(C) An applicant for an auctioneer license shall submit a written
application on a form approved by the commission. If the applicant
has been licensed previously as an apprentice auctioneer, the
application must contain an evaluation by the applicant's supervisor
of his performance as an apprentice auctioneer. If the applicant is
exempted from apprenticeship pursuant to subsection (B), the
application must contain a transcript of his course work in
auctioneering. The commission may require verification of
information included in an application for an auctioneer license.
(D) A person is not required to take the examination prescribed by
subsection (A) to be licensed as an auctioneer if the person provides
evidence satisfactory to the commission that the person is:
(1) a qualified purebred livestock auctioneer and the person
only conducts auctions sponsored by purebred livestock (beef cattle,
swine, horses, and sheep) associations and purebred livestock breeder
farm sales; or
(2) a qualified tobacco auctioneer and the person only conducts
auctions sponsored by tobacco auctioneers.
Section 40-6-235. (A) An auction firm must be licensed as an
auction business even though no owner or officer of that business
acts as an auctioneer. To be licensed an auction firm must pay a fee
to the Auctioneer Recovery Fund as required by Section 40-6-330
and must pay other fees as determined by the commission.
(B) Before an auction firm license is issued, the person designated
as the applicant shall take a written examination approved by the
commission and demonstrate to the satisfaction of the commission a
thorough understanding of the law relating to the conduct of the
auction business and other matters the commission considers
appropriate. An individual who is licensed as an auctioneer and who
is the designated person applying for an auction firm license is not
required to take the auction firm examination. Licensed real estate
brokers and real estate firms are exempt from the auction firm
examination if they employ or associate themselves with a licensed
auctioneer to handle those aspects of the transactions peculiar to the
auctioneer profession. A person or entity licensed as an auction firm
in good standing on this act's effective date is not required to take an
examination in order to maintain or to renew an auction firm license,
if the license does not expire or lapse and is not suspended or revoked
by the commission.
(C) An individual, partnership, corporation, or any other legal or
commercial entity may be licensed as an auction firm upon
application in a form approved by the commission.
Section 40-6-240. (A) All licenses issued under this chapter must
be issued by the commission and are valid from July first of the year
issued or from the date issued, whichever is later, through the
following June thirtieth unless revoked or suspended pursuant to this
chapter. A license may be renewed annually except that an
apprentice auctioneer license may not be renewed more than one
time. No examination is required for renewal of an auctioneer,
apprentice auctioneer, or auction firm license if the application for
renewal is made within ninety days of the expiration of the license.
(B) When an auctioneer licensee applies for license renewal, the
licensee shall submit proof with the renewal form, in a form
acceptable to the commission, that the licensee has acquired
commission-approved continuing education of at least four hours
within the previous twelve months. Continuing education is not
required of apprentice auctioneers and auction firm license holders
unless the firm owner is a licensed auctioneer.
(C) The renewal of a lapsed license is not retroactive and does not
limit the authority of the courts or the commission to take
disciplinary action against a licensee who engages in the auction
profession without a current license.
Section 40-6-250. Unless a person is exempt from licensure under
Section 40-6-370, no person shall sell or offer to sell goods or real
estate at auction in this State or perform an act for which an
auctioneer or apprentice auctioneer license is required unless the
person holds a currently valid license issued under this chapter. No
individual, partnership, corporation, or any other legal or commercial
entity shall sell or offer to sell goods or real estate at auction unless
the entity holds a currently valid auction firm license issued under
this chapter, but no such entity is required to hold an auction firm
license to sell livestock or tobacco at auction so long as those sales
are regulated by another state agency. However, if the commercial
entity consists of or is entirely owned by only one individual
auctioneer who holds a currently valid individual auctioneer license,
that commercial entity is not required to hold an auction firm license.
Section 40-6-260. The commission shall publish at least once a
year a list of names and address of all persons, partnerships, and
corporations holding valid apprentice auctioneer or auctioneer
licenses or designated as licensed auctioneer partnerships or
corporations.
Section 40-6-270. (A) A person who holds a valid auctioneer
license in another state may apply for and be issued a license under
this chapter if the requirements of that person's resident state, as
determined by the commission, are at least substantially equivalent
to the requirements of this chapter, if the resident state extends
similar reciprocal privileges to auctioneers who are residents and
licensed by this State.
(B) An applicant under this section shall submit an application and
other documentation and proof of eligibility for licensure as may be
required by the commission, including a criminal history conviction
record from an agency in the applicant's resident state that is
equivalent to the South Carolina Law Enforcement Division;
however, the applicant is not required to take the examination
required under Section 40-6-230.
(C) An applicant shall pay the fee required in Section 40-6-50(B)
and shall file with the commission an irrevocable consent that service
on the commission is sufficient service or process for actions against
the applicant by a resident of this State arising out of the applicant's
auctioneering activities.
(D) An applicant under this section shall pay the fee required under
Section 40-6-200 whether or not the applicant currently is bonded as
an auctioneer or apprentice auctioneer in the applicant's home state.
A license issued under this section must be marked to indicate that its
holder is a nonresident reciprocal licensee.
(E) A license issued pursuant to this section is valid from the date
of issuance to the following June thirtieth and may be renewed from
year to year unless suspended or revoked pursuant to this chapter or
a regulation promulgated under this chapter, if the licensee continues
to be a resident of and licensed in good standing in the licensee's
resident state.
(F) A person licensed under this section shall notify the
commission of the lapse, surrender, suspension, revocation, or any
other loss or restriction of his license in the person's resident state.
The notice must be sent to the commission, by certified mail, return
receipt requested, within ten days of the occurrence.
(G) A license issued under this section immediately must be
suspended or revoked based upon the occurrence of any of the events
set out in subsection (F) or based upon a change of principal state
residence of the reciprocal licensee.
(H) A person whose license is terminated as a result of a change of
principal state residence may reapply for reciprocal status if the
person is otherwise eligible for a license based upon the new state
residence and submits with the application the fees required by the
commission.
(I) Notwithstanding any other provision of this section, a
reciprocal licensee who subsequently becomes a domiciliary of this
State may request by application the reciprocal license be converted
to that of an in-state licensee without having to take the examination
required by Section 40-6-230. The commission may require an
applicant to pay processing and application fees, as established by the
commission.
Section 40-6-280. It is unlawful to conduct or advertise that an
auction is 'absolute' if minimum opening bids are required or other
conditions are placed on the sale which limit the sale other than to the
highest bidder.
Section 40-6-290. (A) No licensee may conduct an auction in this
State without first having a written agreement with the owner of any
property to be sold. The agreement shall contain the terms and
conditions upon which the licensee received the goods for sale. The
licensee shall provide the owner with a signed copy of the agreement
and shall keep at least one copy for three years from the date of the
agreement. A written agreement is not required for a sale at auction
if the sale is made at an auction house or similar place where
members of the public are generally offered the opportunity to
present goods for sale. Copies of all contracts must be made
available to the commission or its designated agent upon request.
(B) A licensee shall maintain accurate records upon receipt of
goods for auction and before their sale, which shall include the name
and address of the person who employed the licensee to sell the
goods at auction and the name and address of the owner of the goods
to be sold. These records must be open for inspection by the
commission or its designated agent upon request.
(C) A licensee shall have his pocket card license in his possession
at each auction he conducts.
Section 40-6- 300. (A) A licensee who handles the proceeds of an
auction shall maintain a trust or escrow account with an insured bank
or savings and loan association and shall deposit in this account
within three business days all funds received for the benefit of
another person, unless otherwise required by law or the owner or
consignor of the property auctioned is paid immediately after the
sale.
(B) Upon issuance or renewal of a license, the licensee must
provide the commission with the name of the bank and the account
number of the trust or escrow account in which the funds of others
are maintained and authorization permitting the examination of the
account by the commission or its authorized representative, unless the
licensee has provided certification to the commission that funds are
paid within three business days. A licensee must notify the
commission by certified mail, return receipt requested, of a change
of bank, account number, or location of the trust or escrow account
and, at that time, shall complete the required authorization for
examination of the account by the commission or its authorized
representative.
(C) A licensed auctioneer or licensed apprentice auctioneer in this
State who works directly for a licensed auction firm or who works
directly for another licensed auctioneer who maintains an active
escrow account may use that escrow account and number in all
applications for licensure or renewal, if the escrow account is used
solely for the purpose of holding funds of others in relation to
auctions.
(D) A licensee shall maintain complete records for at least three
years showing the deposit, maintenance, and withdrawal of trust or
escrow funds. These records must be open for inspection by the
commission or its designated agent periodically, upon request, and
without prior notice.
Section 40-6- 310. No property other than the property of
a specified deceased person or the property of a specified living
person's estate may be sold at auction if the auction is conducted or
advertised only as an 'estate sale'. However, items other than those
of the specified estate may be sold at the sale if all advertisements of
the sale specify which items do not belong to the estate.
Section 40-6-320. Notwithstanding any other provision of law,
municipalities may not enact ordinances to provide for the licensing
of auctioneers.
Section 40-6-330. (A) There is created the 'Auctioneer Recovery
Fund' to be maintained by the commission for the payment of claims
to persons injured by licensees under this chapter. Monies in the fund
must be held and carried forward by the State Treasurer separate from
the general fund. At least one hundred thousand dollars for recovery
and guaranty purposes must be maintained in the fund. Fund monies
may be invested and reinvested by the State Treasurer in interest
bearing accounts, interest accruing to the fund. Sufficient liquidity
must be maintained so that there are monies available to satisfy
claims processed through the commission. Expenditures from the
fund must be made in accordance with this chapter without legislative
appropriation. Warrants for expenditures must be drawn by the
Comptroller General pursuant to claims approved and signed by the
chairman of the commission.
(B) To initially establish the fund and when monies, including
principal and interest, are less than forty-five thousand dollars at the
end of the fiscal year after payment of claims and expenses, a
licensee shall pay, in addition to the license fees required under this
chapter, a fund contribution fee to be determined by the commission.
After the fund is initially established a new applicant for licensure
also shall pay a fund contribution fee. However, any fee assessed
under this subsection may not exceed fifty dollars a year.
(C) The commission may use contents of the fund in excess of one
hundred thousand dollars to:
(1) promote education and research in the auctioneer
profession in order to benefit persons licensed under this chapter and
to improve the efficiency of the profession;
(2) underwrite educational seminars, training centers, and
other forms of educational projects for the use and benefit of
licensees;
(3) sponsor, contract for, or underwrite education and
research projects in order to advance the auctioneer profession in
South Carolina; and
(4) cooperate with associations of auctioneers or other groups
in order to promote the enlightenment and advancement of the
auctioneer profession in South Carolina.
(D) If monies, including principal and interest, in the fund exceed
one hundred twenty-five thousand dollars at the end of the fiscal year
after payment of claims, expenses, and educational program funding,
the amount in excess must be deposited in the state general fund.
(E) Persons licensed as auctioneers pursuant to Section
40-6-230(D) are exempt from contributing to the fund.
Section 40-6-340. (A) A person aggrieved by the conduct of a
licensee may file a claim against the fund if the:
(1) facts giving rise to the claim are based on a specific
violation of this chapter or regulations promulgated under this
chapter;
(2) claimant has made demand upon the licensee by certified
mail, return receipt requested, for actual damages, and the demand
has been refused or ignored;
(3) claimant is not:
(a) licensed under this chapter; or
(b a party jointly responsible for the claim;
(4) claim is filed no later than one year from the date of
discovery of the loss.
(B) The claim must be made under oath and upon a form the
commission prescribes. It must contain the following minimum
information:
(1) name and address of the claimant;
(2) name and address of the licensee and his last known
working address;
(3) a detailed statement of the events precipitating the loss
and documents and other evidence supporting the claim;
(4) amount of monies sought and evidence supporting this
amount;
(5) copies of complaints and other legal process initiated, if
any;
(6) disclosure of partial satisfaction received, offered, or
otherwise available from the licensee, including a bond, an insurance
policy, or another source of funds.
(C) Upon receiving a claim in proper form, the commission shall
forward the claim by certified mail, return receipt requested, to the
last known address of the licensee. The licensee within thirty days
shall file a verified answer to the claim. If no answer is filed within
thirty days, the licensee is in default, and the commission shall
schedule a hearing on the claim. If the licensee files a timely answer,
the commission shall investigate the claim for not more than sixty
days and promptly schedule a hearing on the claim. The licensee,
commission, and claimant may present evidence and question and
cross-examine witnesses as parties to the hearing.
(D) Failure of the claimant to comply with this section is a waiver
of rights under it.
(E) No claim may be made against or paid from the fund in
connection with an auction which:
(1) pursuant to Section 40-6-370 is not required to be conducted
by a licensed auctioneer; or
(2) is conducted by an auctioneer licensed pursuant to Section
40-6-230(D).
Section 40-6- 350. (A) Claims made against the fund pursuant to
Section 40-6-340, must be heard and decided by a positive majority
vote and must be paid in accordance with Section 40-6-360. Subject
to commission approval, a claim may be compromised; however, the
commission is not bound by the compromise or any stipulation of the
licensee.
(B) Upon payment of a claim, the license of the person against
whom the claim was made must be suspended immediately or
revoked, as the commission determines. The licensee must not be
issued another license until he repays the fund the monies paid on the
claim against him, including interest at the rate of eight percent a
year. Nothing in this section prevents the commission or any other
authority from pursuing other remedies at law or equity.
(C) A claimant receiving monies from the fund shall subrogate his
rights relative to the claim to the commission to the extent of monies
paid, including interest, and shall cooperate with the commission in
the prosecution of the subrogated claim. Amounts recovered against
the licensee or other responsible parties must be deposited into the
fund, less costs and expenses of collection.
Section 40-6-360. Payments from the fund are limited as follows:
(1) Only the claimant's actual damages may be paid from the
fund. No claimant may recover punitive, special, or consequential
damages or attorney's fees.
(2) The fund is not liable for more than ten thousand dollars
for each transaction, regardless of the number of persons aggrieved.
(3) The liability of the fund may not exceed in the aggregate
twenty thousand dollars for one licensee in one calendar year.
(4) A party aggrieved and awarded payment by a final
commission decision has a vested right for payment. Claims against
the fund must be made in the same order as the awards were
authorized. If claims against the fund exceed the monies in it, the
commission shall satisfy unpaid claims as soon as sufficient monies
are deposited. An award is not a claim against the State if it cannot
be paid due to a lack of monies in the fund.
(5) Notwithstanding item (4), if the maximum liability of the
fund is insufficient to pay in full the valid claims of aggrieved
persons whose claims relate to the same transaction or to the same
licensee, the amount for which the fund is liable must be distributed
among the claimants on a pro rata basis. The commission may join in
one action claims having a common factual basis so that an equitable
distribution from the fund may be achieved.
Section 40-6-370. (A) Notwithstanding, Section 40-6-30, a person
is not required to be licensed auctioneer to conduct these auctions:
(1) auctions conducted by the owner of all of the goods being
offered or by the owner's attorney, unless the owner's regular course
of business includes engaging in the sale of goods or real estate by
means of auction or unless the owner originally acquired the goods
for the purpose of resale;
(2) auctions conducted by or under the direction of a public
authority;
(3) auctions pursuant to a judicial order;
(4) sales required by law to be at auction;
(5) auctions conducted on behalf of a charitable, civic, or
religious organization if the person conducting the sale receives no
compensation;
(6) auctions of motor vehicles among motor vehicle dealers
if conducted by an auctioneer licensed under this chapter;
(7) auctions by a trustee pursuant to a valid power of sale.
(B) The exceptions provided for in items (2), (4), and (5) of
subsection (A) do not apply to auctions conducted by:
(1) a person or entity engaged in the business of organizing,
arranging, or conducting auction sales for compensation pursuant to
item (2), (4), or (5) of subsection (A); or
(2) a person or entity conducting a sale pursuant to item (2),
(4), or (5) of subsection (A) who is licensed under this chapter or
licensed in any other state.
Section 40-6-380. If a provision of this chapter or the application
of a provision to a person or circumstance is held invalid, the
invalidity does not affect other provisions or applications of this
chapter which can be given effect without the invalid provision or
application, and to this end the provisions of this chapter are
severable."
SECTION 2. This act takes effect upon approval by the
Governor.
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