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:

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.