1 Indicates Matter Stricken 2 Indicates New Matter 3 4 COMMITTEE REPORT 5 January 27, 2000 6 7 H. 4392 8 9 Introduced by Rep. Wilkes 10 11 S. Printed 1/27/00--H. [SEC 1/28/00 3:08 PM] 12 Read the first time January 11, 2000. 13 14 15 THE COMMITTEE ON 16 LABOR, COMMERCE AND INDUSTRY 17 To whom was referred a Bill (H. 4392), to amend Chapter 6 of 18 Title 40, Code of Laws of South Carolina, 1976, relating to the 19 practice of auctioneers, so as to conform this chapter to the 20 statutory organizational framework of Title 40, etc., respectfully 21 REPORT: 22 That they have duly and carefully considered the same, and 23 recommend that the same do pass with amendment: 24 25 Amend the bill, as and if amended, Section 40-6-20(5) on line 3 26 by deleting /sole proprietorship, / and on line 5 before the /./ by 27 inserting /, excluding a sole proprietorship/ so when amended 28 Section 40-6-20(5) reads: 29 / (5) ‘Business entity’ means a partnership, limited liability 30 partnership, corporation, limited liability company, or other 31 business association, excluding a sole proprietorship./ 32 Amend the bill, further, Section 40-6-20 page 18, immediately 33 after line 26 by inserting: 34 / (10) ‘Sole proprietorship’ means an auction business owned 35 in its entirety by an auctioneer./ 36 Amend the bill, further, by deleting Section 40-6-30 on page 18, 37 lines 27-29. 38 Amend the bill further, Section 40-6-235 page 25 immediately 39 after line 18 by inserting: 40 / (B) A sole proprietorship is exempt from auction firm 41 licensure, as provided for in subsection (A).

1 [4392-1] 1 (C) Licensed real estate brokers - in - charge and real estate firms 2 are exempt from auction firm licensure, as provided for in 3 subsection (A), if they employ a licensed auctioneer to handle 4 those aspects of the transactions peculiar to the auctioneer 5 profession./ 6 Amend the bill further, Section 40-6-370 page 31 by deleting 7 lines 12 and 13 and inserting / Section 40 - 6 - 370. This chapter 8 applies to all auctions held in this State except: / so when amended 9 Section 40-6-370 reads: 10 / Section 40 - 6 - 370. This chapter applies to all auctions held in 11 this State except: 12 (1) auctions conducted by the owner of all of the goods 13 being offered unless the owner’s regular course of business 14 includes engaging in the sale of goods or real estate by means of 15 auction or unless the owner originally acquired the goods for the 16 purpose of resale; 17 (2) auctions conducted by or under the direction of a public 18 authority unless conducted by a person or entity engaged in the 19 business of organizing, arranging, or conducting auction sales for 20 compensation or a person or entity licensed pursuant to this 21 chapter or in any other jurisdiction to conduct auctions; 22 (3) auctions conducted pursuant to a judicial order; 23 (4) sales required by law to be at auction unless conducted 24 by a person or entity engaged in the business of organizing, 25 arranging, or conducting auction sales for compensation or a 26 person or entity licensed pursuant to this chapter or in any other 27 jurisdiction to conduct auctions; 28 (5) auctions conducted on behalf of a charitable, civic, or 29 religious organization if the person conducting the sale receives no 30 compensation unless conducted by a person or entity engaged in 31 the business of organizing, arranging, or conducting auction sales 32 for compensation or a person or entity licensed pursuant to this 33 chapter or in any other jurisdiction to conduct auctions; 34 (6) auctions of motor vehicles among motor vehicle dealers 35 if conducted by an auctioneer licensed under this chapter; 36 (7) auctions by a trustee pursuant to a valid power of sale. / 37 Renumber sections to conform. 38 Amend totals and title to conform. 39 40 HARRY F. CATO, for Committee. 41

1 [4392-2] 1 2 3 4 5 6 7 8 9 A BILL 10 11 TO AMEND CHAPTER 6 OF TITLE 40, CODE OF LAWS OF 12 SOUTH CAROLINA, 1976, RELATING TO THE PRACTICE 13 OF AUCTIONEERS, SO AS TO CONFORM THIS CHAPTER 14 TO THE STATUTORY ORGANIZATIONAL FRAMEWORK 15 OF TITLE 40, CHAPTER 1 FOR COMMISSIONS UNDER THE 16 ADMINISTRATION OF THE DEPARTMENT OF LABOR, 17 LICENSING AND REGULATION AND TO FURTHER 18 PROVIDE FOR THE LICENSURE AND REGULATION OF 19 AUCTIONEERS. 20 21 Be it enacted by the General Assembly of the State of South 22 Carolina: 23 24 SECTION 1. Chapter 6, Title 40 25 26 “CHAPTER 6 27 28 Auctioneers 29 30 Section 40-6-10. For the purposes of this chapter the following 31 definitions apply: 32 (1) ‘Auction’ means the sale of goods or real estate by means 33 of exchanges between an auctioneer and members of an audience, 34 the exchanges consisting of a series of invitations for offers made 35 by the auctioneer, offer by members of the audience, and the 36 acceptance by the auctioneer of the highest or most favorable offer. 37 (2) ‘Auctioneer’ means a person who conducts or offers to 38 conduct auctions and includes apprentice auctioneers except as 39 stricter standards are specified by this chapter for apprentice 40 auctioneers. 41 (3) ‘Absolute auction’ means the sale of real or personal 42 property at auction whereby every item offered from the block is

1 [4392] 1 1 sold to the highest bidder without reserve and without the 2 requirement of a minimum bid or other conditions which limit the 3 sale other than to the highest bidder. 4 (4) ‘Estate sale’ means the sale at auction of property of a 5 specified deceased person or the property of a specified living 6 person’s estate but does not mean the sale at auction of property of 7 any other person. 8 (5) ‘Auction firm’ means a sole proprietorship of which the 9 owner is not a licensed auctioneer or a partnership, association, or 10 corporation, not otherwise exempt from this chapter, that sells 11 either directly or through agents, real or personal property at 12 auction or that arranges, sponsors, manages, conducts, or 13 advertises auctions or that in the regular course of business uses or 14 allows the use of its facilities for auctions. This definition applies 15 whether or not the owner or officer of that business acts as an 16 auctioneer. 17 (6) ‘Fund’ means the Auctioneer Recovery Fund. 18 (7) ‘Owner’ means the bona fide owner of the property being 19 offered for sale; in the case of a partnership, “owner” means a 20 general partner in a partnership that owns the property being 21 offered for sale, provided that in the case of a limited partnership it 22 has filed a certificate of limited partnership as required by Section 23 33-42-210; in the case of a corporation, “owner” means an owner 24 or director of a corporation that owns the property being offered 25 for sale provided that the corporation is registered to do business in 26 the State. 27 28 Section 40-6-20. (A) This chapter applies to all auctions held in 29 this State except the following: 30 (1) auctions conducted by the owner of all of the goods being 31 offered or his attorney, unless the owner’s regular course of 32 business includes engaging in the sale of goods or real estate by 33 means of auction or unless the owner originally acquired the goods 34 for the purpose of resale; 35 (2) auctions conducted by or under the direction of a public 36 authority; 37 (3) auctions pursuant to a judicial order; 38 (4) sales required by law to be at auction; 39 (5) auctions conducted on behalf of a charitable, civic, or religious 40 organization if the person conducting the sale receives no 41 compensation; 42 (6) auctions of motor vehicles among motor vehicle dealers if 43 conducted by an auctioneer licensed under this chapter;

1 [4392] 2 1 (7) auctions by a trustee pursuant to a valid power of sale; 2 (8) auctions sponsored by purebred livestock (beef cattle, swine, 3 horses, and sheep) associations and purebred livestock breeder 4 farm sales to the extent that purebred livestock auctioneers, upon 5 proof to the commission that they are qualified purebred livestock 6 auctioneers, are exempt from the examination and the Auctioneer 7 Recovery Fund requirements provided for in this chapter for the 8 purpose of conducting purebred livestock auctions, but not from 9 the licensing and license fee provisions of this chapter; 10 (9) auctions sponsored by tobacco auctioneers to the extent that 11 tobacco auctioneers, upon proof to the commission that they are 12 qualified tobacco auctioneers, are exempt from the examination 13 and the fund requirements provided for in this chapter for the 14 purpose of conducting tobacco auctions but not from the licensing 15 and license fee provisions of this chapter. 16 (B) The exceptions provided for in items (2), (4), and (5) of 17 subsection (A) do not apply to: 18 (1) a person or entity engaged in the business of organizing, 19 arranging, or conducting auction sales for compensation pursuant 20 to item (2), (4), or (5) of subsection (A); or 21 (2) a person or entity conducting a sale pursuant to item (2), (4), or 22 (5) of subsection (A) who is licensed under this chapter or licensed 23 in any other state. 24 (C) If an auction is conducted that is exempt from this chapter, no 25 claim may be made against or paid from the fund. 26 27 Section 40-6-30. There is created the South Carolina 28 Auctioneers’ Commission composed of five members to be 29 appointed by the Governor. The Governor shall consider 30 nominations from any individual, group, or association. The terms 31 of the members are for three years and until their successors are 32 appointed and qualify. Any vacancy must be filled in the manner 33 of the original appointment for the unexpired portion of the term 34 only. 35 36 Section 40-6-40. At least three members of the commission 37 must be licensed auctioneers and must be active in the auction 38 profession. At least one member must not be connected with the 39 auction business. Action taken by the commission may be taken 40 by a vote of three members. A quorum consists of three members. 41 The members shall elect from among themselves a chairman who 42 serves for one year and until his successor is elected and qualifies. 43 No member may serve more than two successive terms as

1 [4392] 3 1 chairman. The members of the commission shall receive the same 2 per diem, mileage, and subsistence provided by law for members 3 of state boards, committees, and commissions. The Director of the 4 Department of Labor, Licensing, and Regulation, pursuant to 5 Section 40-73-15, shall employ an executive director who must 6 have a minimum of five years experience as an auctioneer, an 7 investigator or investigators, and other employees necessary to 8 carry out the duties prescribed by this chapter. Employees serve at 9 the pleasure of the Director of the Department of Labor, Licensing, 10 and Regulation. The commission shall issue, suspend, and revoke 11 licenses for auctioneers and apprentice auctioneers provided in this 12 chapter and may promulgate regulations necessary to carry out its 13 provisions. 14 15 Section 40-6-45. In hiring an executive director, the Director 16 of the Department of Labor, Licensing, and Regulation may waive 17 the experience requirement provided in Section 40-6-40. 18 19 Section 40-6-50. Unless the auction is exempt under Section 20 40-6-20, no person shall sell or offer to sell goods or real estate at 21 auction in this State or perform an act for which an auctioneer or 22 apprentice auctioneer license is required unless the person holds a 23 currently valid license issued under this chapter. No individual, 24 partnership, corporation, or any other legal or commercial entity 25 shall sell or offer to sell goods or real estate at auction unless the 26 entity holds a currently valid auction firm license issued under this 27 chapter, but no such entity is required to hold an auction firm 28 license to sell livestock or tobacco at auction so long as those sales 29 are regulated by another state agency. However, if the commercial 30 entity consists of or is entirely owned by only one individual 31 auctioneer who holds a currently valid individual auctioneer 32 license, that commercial entity is not required to hold an auction 33 firm license. 34 35 Section 40-6-60. (A) No person may be licensed under this 36 chapter as an apprentice auctioneer or auctioneer or receive an 37 auction firm license if the person: 38 (1) is under eighteen years of age; 39 (2) has been convicted of a felony or any other crime involving 40 fraud or moral turpitude within the preceding five years; for 41 purposes of this item, a person has been convicted if the person has 42 pled guilty, pled nolo contendre, or been found guilty after a trial; 43 or

1 [4392] 4 1 (3) has had an auctioneer, apprentice auctioneer, or auction firm 2 license revoked within the preceding five years. 3 (B) No person may be issued an auctioneer, apprentice auctioneer, 4 or auction firm license unless the person has paid a fee to the 5 Auctioneer Recovery Fund as required by Section 40-6-200 and 6 the person has provided a criminal history conviction record from 7 the South Carolina Law Enforcement Division and if the person is 8 a resident of another state, from an equivalent agency in that state. 9 (C) No license revoked under this chapter may be reinstated except 10 upon an affirmative vote of a majority of the members of the 11 commission. 12 (D) The credit record and auctioneering license disciplinary history 13 of an applicant may be considered by the commission in 14 determining whether or not to issue or renew a license. A fee of 15 ten dollars must be paid to the commission for the applicant’s 16 credit investigation. 17 18 Section 40-6-70. An applicant for an apprentice auctioneer 19 license shall submit a written application on a form approved by 20 the commission. To receive a license the applicant shall take a 21 written examination approved by the commission and perform on 22 it to the satisfaction of the commission. The examination must test 23 the applicant’s understanding of the law relating to auctioneers and 24 auctions, ethical practices for auctioneers, and the mathematics 25 applicable to the auctioneer business. The examination must be 26 given at least twice a year in Columbia and at other times and 27 places the commission designates. However, no person may take 28 the examination within six months after having failed it a second 29 time. An apprentice auctioneer application and license must name 30 a licensed auctioneer to serve as the supervisor of the apprentice. 31 No apprentice auctioneer may enter into an agreement to conduct 32 an auction or conduct an auction without the express approval of 33 the apprentice auctioneer’s supervisor. The supervisor regularly 34 shall review the records the apprentice is required to maintain and 35 see that they are accurate and current. 36 37 Section 40-6-80. No person may be licensed as an auctioneer 38 unless the person has held an apprentice auctioneer license, served 39 as an apprentice auctioneer for the preceding year, and has taken a 40 written examination approved by the commission and performed 41 on it to the satisfaction of the commission. The examination must 42 test the applicant’s understanding of the law relating to auctioneers 43 and auctions, ethical practices for auctioneers, the mathematics

1 [4392] 5 1 applicable to the auctioneer business, and other matters relating to 2 auctions the commission considers appropriate. The examination 3 must be given at least twice a year in Columbia and at other times 4 and places the commission designates. However, no person may 5 take the examination within six months after having failed it a 6 second time. 7 A person who successfully has completed the equivalent of at least 8 eighty hours of classroom instruction in a course in auctioneering 9 at an institution approved by the commission may be licensed as 10 an auctioneer without holding an apprentice license and serving as 11 an apprentice for one year. He shall take the examination required 12 by this section and perform on it to the satisfaction of the 13 commission. 14 An applicant for an auctioneer license shall submit a written 15 application on a form approved by the commission. If the 16 applicant has been licensed previously as an apprentice auctioneer, 17 the application must contain an evaluation by the applicant’s 18 supervisor of his performance as an apprentice auctioneer. If the 19 applicant is exempted from apprenticeship because he has 20 completed the equivalent of at least eighty hours of classroom 21 instruction in auctioneering, the application must contain a 22 transcript of his course work in auctioneering. The commission 23 may require verification of information included in an application 24 for an auctioneer license. 25 26 Section 40-6-85. (A) An auction firm must be licensed as an 27 auction business even though no owner or officer of that business 28 acts as an auctioneer. To be licensed an auction firm must pay a 29 fee to the Auctioneer Recovery Fund as required by Section 30 40-6-200 and must pay other fees as determined by the 31 commission. 32 (B) fore an auction firm license is issued, the person designated as 33 the applicant shall take a written examination approved by the 34 commission and demonstrate to the satisfaction of the commission 35 a thorough understanding of the law relating to the conduct of the 36 auction business and other matters the commission considers 37 appropriate. An individual who is licensed as an auctioneer and 38 who is the designated person applying for an auction firm license 39 is not required to take the auction firm examination. Licensed real 40 estate brokers and real estate firms may be exempt from the 41 auction firm examination if they employ or associate themselves 42 with a licensed auctioneer to handle those aspects of the 43 transactions peculiar to the auctioneer profession. A person or

1 [4392] 6 1 entity licensed as an auction firm in good standing on this act’s 2 effective date is not required to take an examination in order to 3 maintain or to renew an auction firm license, if the license does not 4 expire or lapse and is not suspended or revoked by the 5 commission. 6 7 Section 40-6-90. (A) A license issued under this chapter is valid 8 from July first of the year issued or from the date issued, 9 whichever is later, through the following June thirtieth unless 10 revoked or suspended pursuant to this chapter or a regulation 11 promulgated under this chapter. A license may be renewed 12 annually except that an apprentice auctioneer license may not be 13 renewed more than one time. No examination is required for 14 renewal of an auctioneer, apprentice auctioneer, or auction firm 15 license if the application for renewal is made within ninety days of 16 the expiration of the license. 17 (B) When an auctioneer licensee applies for license renewal, the 18 licensee shall submit with the renewal form proof, in a form 19 acceptable to the commission, that the licensee has acquired 20 commission-approved continuing education of at least four hours 21 within the previous twelve months. Continuing education is not 22 required of apprentice auctioneers and auction firm license holders 23 unless the firm owner is a licensed auctioneer. 24 (C) The renewal of a lapsed license is not retroactive and does not 25 limit the authority of the courts or the commission to take 26 disciplinary action against a licensee who engages in the auction 27 profession without a current license. 28 29 Section 40-6-100. Former SECTION 40-6-100 required 30 licensees to file bonds with the commission. 31 32 Section 40-6-110. An individual, partnership, corporation, or 33 any other legal or commercial entity, upon application in a form 34 approved by the commission, may be licensed as an auction firm. 35 36 Section 40-6-120. The commission shall publish at least once a 37 year a list of names and address of all persons, partnerships and 38 corporations holding valid apprentice auctioneer or auctioneer 39 licenses or designated as licensed auctioneer partnerships or 40 corporations. 41 42 Section 40-6-130. (A) A person who holds a valid auctioneer 43 license in another state may apply for and be granted a South

1 [4392] 7 1 Carolina license if the requirements of that person’s resident state, 2 as determined by the commission, are at least substantially 3 equivalent to the requirements of this chapter, if the resident state 4 extends similar reciprocal privileges to auctioneers who are 5 residents and licensed by this State. 6 (B) An applicant under this section shall submit an application and 7 other documentation and proof of eligibility for licensure as may 8 be required by the commission but is not required to take the 9 examination required under Section 40-6-80. 10 (C) An applicant shall pay the fee required in Section 40-6-140 and 11 shall file with the commission an irrevocable consent that service 12 on the commission is sufficient service or process for actions 13 against the applicant by a resident of this State arising out of the 14 applicant’s auctioneering activities. 15 (D) An applicant under this section shall pay the fee required 16 under Section 40-6-200 whether or not the applicant currently is 17 bonded as an auctioneer or apprentice auctioneer in the applicant’s 18 home state. A license issued under this section must be marked to 19 indicate that its holder is a nonresident reciprocal licensee. 20 (E) A license issued pursuant to this section is valid from the date 21 of issuance to the following June thirtieth and may be renewed 22 from year to year unless suspended or revoked pursuant to this 23 chapter or a regulation promulgated under this chapter, if the 24 licensee continues to be a resident of and licensed in good standing 25 in the licensee’s resident state. 26 (F) A person licensed under this section shall notify the 27 commission of the lapse, surrender, suspension, revocation, or any 28 other loss of license in the person’s resident state. The notice must 29 be sent to the commission, by certified mail, return receipt 30 requested, within ten days of the occurrence. 31 (G) A license issued under this section immediately must be 32 suspended or revoked based upon the occurrence of any of the 33 events set out in subsection (E) or based upon a change of 34 principal state residence of the reciprocal licensee. 35 (H) A person whose license is terminated as a result of a change of 36 principal state residence may reapply for reciprocal status if the 37 person is otherwise eligible for a license based upon the new state 38 residence and submits with the application the fees required by the 39 commission. 40 (I) Notwithstanding any other provision of this section, a 41 reciprocal licensee who subsequently becomes a domiciliary of 42 this State may request by application the reciprocal license be 43 converted to that of an in-state licensee without having to take the

1 [4392] 8 1 examination required by Section 40-6-80. The commission may 2 require an applicant to pay processing and application fees it 3 considers appropriate. 4 5 Section 40-6-140. A person licensed as an auctioneer shall pay 6 an annual license fee to the commission. Funds derived under this 7 chapter must be paid to the State Treasurer who shall keep them in 8 the manner provided for other agencies and boards of the State. 9 The commission may establish license and examination fees by 10 regulation. 11 12 Section 40-6-145. It is unlawful to conduct or advertise that an 13 auction is “absolute” if minimum opening bids are required or 14 other conditions are placed on the sale which limit the sale other 15 than to the highest bidder. 16 17 Section 40-6-150. (A) No licensee may conduct an auction in 18 this State without first having a written agreement with the owner 19 of any property to be sold. The agreement shall contain the terms 20 and conditions upon which the licensee received the goods for 21 sale. The licensee shall provide the owner with a signed copy of 22 the agreement and shall keep at least one copy for three years from 23 the date of the agreement. A written agreement is not required for 24 a sale at auction if the sale is made at an auction house or similar 25 place where members of the public are generally offered the 26 opportunity to present goods for sale. Copies of all contracts must 27 be made available to the commission or its designated agent upon 28 request. 29 (B) A licensee shall maintain accurate records upon receipt of 30 goods for auction and before their sale, which shall include the 31 name and address of the person who employed the licensee to sell 32 the goods at auction and the name and address of the owner of the 33 goods to be sold. These records must be open for inspection by the 34 commission or its designated agent upon request. 35 (C) A licensee shall have his pocket card license in his possession 36 at each auction he conducts. 37 38 Section 40-6-155. (A) A licensee who handles the proceeds of 39 an auction shall maintain a trust or escrow account with an insured 40 bank or savings and loan association and shall deposit in this 41 account within three business days all funds received for the 42 benefit of another person, unless otherwise required by law or the

1 [4392] 9 1 owner or consignor of the property auctioned is paid immediately 2 after the sale. 3 (B) Upon issuance or renewal of a license, the licensee must 4 provide the commission with the name of the bank and the account 5 number of the trust or escrow account in which the funds of others 6 are maintained and authorization permitting the examination of the 7 account by the commission or its authorized representative, unless 8 the licensee has provided certification to the commission that 9 funds are paid within three business days. A licensee must notify 10 the commission by certified mail, return receipt requested, of a 11 change of bank, account number, or location of the trust or escrow 12 account and, at that time, shall complete the required authorization 13 permitting examination of the account by the commission or its 14 authorized representative. 15 (C) A licensed auctioneer or licensed apprentice auctioneer in this 16 State who works directly for a licensed auction firm or who works 17 directly for another licensed auctioneer who maintains an active 18 escrow account may use that escrow account and number in all 19 applications for licensure or renewal, if the escrow account is used 20 solely for the purpose of holding funds of others in relation to 21 auctions. 22 (D) A licensee shall maintain complete records for at least three 23 years showing the deposit, maintenance, and withdrawal of trust or 24 escrow funds. The commission or its designated agent may 25 inspect these records periodically without prior notice. 26 27 Section 40-6-156. The sale at auction of any property other than 28 the property of a specified deceased person or the property of a 29 specified living person’s estate at any auction conducted or 30 advertised as an estate sale only is prohibited. Items other than 31 those of the specified estate may be sold at the sale only if all 32 advertisements of the sale contain specific information detailing 33 which items do not belong to the estate. 34 35 Section 40-6-160.(A) Upon its own motion or a verified 36 complaint and a prima facie showing of a violation of this chapter 37 or a regulation promulgated under this chapter, the commission 38 may investigate the actions of an auctioneer, apprentice auctioneer, 39 auction firm, or a person who has unlawfully assumed to act in 40 such capacity within this State. Upon notice and a hearing the 41 commission may deny, suspend, or revoke a license issued under 42 this chapter and assess a fine if the licensee is found by the 43 commission to have:

1 [4392] 10 1 (1) violated this chapter or a regulation promulgated under this 2 chapter; 3 (2) engaged in a continued and flagrant course of 4 misrepresentation or made false promises or an employee of the 5 licensee or someone acting on behalf of and with the licensee’s 6 consent made false promises; 7 (3) failed to account for or to pay over within a reasonable time, 8 not to exceed thirty days, money belonging to another which has 9 come into the licensee’s possession through an auction sale; 10 (4) used misleading or untruthful advertising; 11 (5) engaged in conduct in connection with a sales transaction 12 which demonstrates bad faith or dishonesty; 13 (6) knowingly used false bidders, cappers, or pullers or knowingly 14 made a material false statement or representation; 15 (7) been convicted of a felony or an act involving fraud or moral 16 turpitude; 17 (8) wilfully failed to properly and fully complete an application or 18 made a false statement or gave false information in connection 19 with an application for a license or renewal or reinstatement of a 20 license or an investigation by the commission or the commission’s 21 designated agent; 22 (9) failed to maintain or to deposit in a trust or escrow account in 23 an insured bank or savings and loan association within three 24 business days funds received for another person through sale at 25 auction, unless otherwise required by law; 26 (10) failed to pay a fine assessed or ordered by the commission 27 under Section 40-6-175; 28 (11) wilfully failed to properly make a disclosure or to provide 29 documents or information required by this chapter or the 30 commission; 31 (12) demonstrated lack of financial responsibility. 32 The commission may issue a written or oral reprimand for 33 misconduct as set out in this subsection when, in its judgment, the 34 misconduct does not warrant suspension or revocation of a license. 35 (B) The commission may conduct an investigation which it 36 considers necessary to determine whether a person has violated 37 this chapter or an order issued or a regulation promulgated under 38 this chapter or to aid in the enforcement of this chapter or 39 regulations promulgated under this chapter. The commission may 40 require or permit a person to file a statement in writing, under oath 41 or otherwise as the commission determines, as to facts and 42 circumstances concerning the matter being investigated.

1 [4392] 11 1 (C) For the purpose of an investigation or proceeding under this 2 chapter, the commission or its designated agent may administer 3 oaths and upon its own motion or upon request of any party, shall 4 subpoena witnesses, compel their attendance, take evidence, and 5 require the production of any matter which is relevant to the 6 investigation, including the existence, description, nature, custody, 7 condition, and location of any books, documents, or other tangible 8 items and the identity and location of persons having knowledge of 9 relevant facts or any other matter reasonably calculated to lead to 10 the discovery of material evidence. Upon failure to obey a 11 subpoena or to answer questions propounded by the commission or 12 its designated agent and upon reasonable notice to all persons 13 affected, the commission through the Attorney General may apply 14 to the circuit court for an order compelling compliance. 15 (D) The authority of the commission to revoke or suspend a 16 licensee for violation of this chapter or a regulation promulgated 17 under this chapter includes the authority to place a licensee on 18 probation for a period not to exceed two years and upon conditions 19 to be determined by the commission. 20 (E) The commission may: 21 (1) issue an order requiring a person to cease and desist from any 22 unlawful practice and to take action as the commission considers 23 necessary to carry out the purposes of this chapter if after notice 24 and hearing, the commission determines that a person has: 25 (a) violated this chapter; 26 (b) directly or through an agent or employee knowingly engaged in 27 false, deceptive, or misleading practices in the sale of goods or real 28 estate at auction, including advertising and promotions; 29 (c) violated an order or regulation of the commission; 30 (2) make findings of fact in writing that the public interest will be 31 irreparably harmed by delay in issuing an order and in that case 32 may issue a temporary order. Before issuing the temporary cease 33 and desist order, the commission or its designated agent, whenever 34 possible by telephone or otherwise, shall notify the affected person 35 of the commission’s intent to issue a cease and desist order. A 36 temporary cease and desist order shall include a provision that 37 upon request a hearing must be held promptly to determine 38 whether or not the order shall become permanent. 39 40 Section 40-6-170. A person who violates the provisions of this 41 chapter is guilty of a misdemeanor and, upon conviction, must be: 42 (1) fined not more than five hundred dollars or imprisoned not 43 more than six months for a first offense;

1 [4392] 12 1 (2) fined not more than one thousand dollars or imprisoned not 2 more than one year for a second offense; 3 (3) fined not more than two thousand five hundred dollars or 4 imprisoned not more than three years for a third or subsequent 5 offense. 6 7 Section 40-6-175. After a hearing as provided for in Section 8 40-6-160 and upon a finding by the commission that a person has 9 violated this chapter or a regulation promulgated pursuant to this 10 chapter, the commission may order the person to pay a civil fine of 11 not less than one hundred dollars and not more than five thousand 12 dollars to be assessed and collected by the commission. These 13 fines are in addition to any other sanction imposed by the 14 commission and must be deposited in the state general fund. 15 16 Section 40-6-180. No license may be denied, suspended, or 17 revoked, and no other disciplinary action against a licensee may be 18 taken, until after fifteen days’ notice has been given in writing to 19 the licensee or applicant stating the ground of the proposed action 20 and until a public hearing has been held at which he shall have 21 opportunity to be heard, present testimony in his behalf, and be 22 confronted by witnesses against him, if he requests the hearing. 23 The commission, in its discretion, may grant the accused a 24 temporary permit to auction pending the hearing and 25 determination. Determinations must be made and the licensee or 26 applicant notified of them within five days after the hearing. Any 27 auctioneer notified of a suspension may request a rehearing within 28 twenty days from the date of notification of determination. Upon a 29 rehearing and continued denial, suspension, or revocation of 30 license, or other disciplinary action, or upon a refusal for 31 rehearing, the party is entitled to appeal his case to an 32 administrative law judge as provided under Article 5 of Chapter 23 33 of Title 1 (the Administrative Procedures Act). The commission or 34 its authorized representatives may subpoena witnesses and 35 documents for any hearing and may administer oaths to the 36 witnesses. 37 38 Section 40-6-190. Notwithstanding the provisions of Act 283 of 39 1975, or any other provision of law, municipal corporations may 40 not enact ordinances to provide for the licensing of auctioneers. 41 42 Section 40-6-200. (A) The “Auctioneer Recovery Fund” is 43 created to be maintained by the commission for the payment of

1 [4392] 13 1 claims to persons injured by licensees under this chapter. Monies 2 in the fund must be held and carried forward by the State Treasury 3 separate from the general fund. At least one hundred thousand 4 dollars for recovery and guaranty purposes must be maintained in 5 the fund. Fund monies may be invested and reinvested by the 6 State Treasurer in interest bearing accounts, interest accruing to the 7 fund. Sufficient liquidity must be maintained so that there are 8 monies available to satisfy claims processed through the 9 commission. Expenditures from the fund must be made in 10 accordance with this chapter without legislative appropriation. 11 Warrants for expenditures must be drawn by the Comptroller 12 General pursuant to claims approved and signed by the chairman 13 of the commission. 14 (B) To initially establish the fund and when monies, including 15 principal and interest, are less than forty-five thousand dollars at 16 the end of the fiscal year after payment of claims and expenses, a 17 licensee shall pay, in addition to the license fees required under 18 this chapter, a fund contribution fee determined by the 19 commission. After the fund is initially established a new applicant 20 for licensure also shall pay a fund contribution fee. However, any 21 fee assessed under this subsection may not exceed fifty dollars a 22 year. 23 (C) The commission may use contents of the fund in excess of one 24 hundred thousand dollars to: 25 (1) promote education and research in the auctioneer profession in 26 order to benefit persons licensed under this chapter and to improve 27 the efficiency of the profession; 28 (2) underwrite educational seminars, training centers, and other 29 forms of educational projects for the use and benefit of licensees; 30 (3) sponsor, contract for, or underwrite education and research 31 projects in order to advance the auctioneer profession in South 32 Carolina; and 33 (4) cooperate with associations of auctioneers or other groups in 34 order to promote the enlightenment and advancement of the 35 auctioneer profession in South Carolina. 36 (D) If monies, including principal and interest, in the fund exceed 37 one hundred twenty-five thousand dollars at the end of the fiscal 38 year after payment of claims, expenses, and educational program 39 funding the amount in excess must be deposited in the state 40 general fund. 41

1 [4392] 14 1 Section 40-6-210. (A) A person aggrieved by the conduct of a 2 licensee may apply for monies from the fund if the following 3 conditions have been met: 4 (1) The facts giving rise to the claim are based on a specific 5 violation of this chapter or related regulations. 6 (2) The applicant has made demand upon the licensee by certified 7 mail, return receipt requested, for his actual damages, and demand 8 has been refused or ignored. 9 (3) The applicant is not: 10 (a) licensed under this chapter; or 11 (b) a party jointly responsible for the claim. 12 (4) Application for recovery has been made not later than one year 13 from the date of discovery of the loss. 14 (B) Application for monies must be made under oath and upon a 15 form the commission prescribes. It must contain the following 16 minimum information: 17 (1) name and address of the applicant; 18 (2) name and address of the licensee and his last known working 19 address; 20 (3) amount of monies sought and evidence supporting the claim; 21 (4) copies of complaints and other legal process initiated; 22 (5) disclosure of partial satisfaction received, offered, or otherwise 23 available from the licensee, a bond, a policy of insurance or other 24 source; 25 (6) detailed statement of the events precipitating the loss and 26 documents and other evidence supporting the claim. 27 (C) Upon receiving a claim in proper form, the commission shall 28 forward the claim by certified mail, return receipt requested, to the 29 last known address of the licensee. The licensee within thirty days 30 shall file a verified answer to the claim. If no answer is filed 31 within thirty days, the licensee is in default, and the commission 32 shall schedule a hearing on the claim. If the licensee files a timely 33 answer, the commission shall investigate the claim for not more 34 than sixty days and promptly schedule a hearing on the claim. The 35 licensee, commission, and claimant may present evidence and 36 question and cross-examine witnesses as parties to the hearing. 37 (D) Failure of the applicant to comply with this section is a waiver 38 of rights under it. 39 40 Section 40-6-220. (A) Applications for payment from the fund 41 must be heard and decided by a majority of the members of the 42 commission. After a hearing, if the commission finds that the 43 claim must be paid from the fund, the commission or an

1 [4392] 15 1 administrative law judge as provided under Article 5 of Chapter 23 2 of Title 1, if appealed, shall enter an order requiring payment in 3 accordance with the limitations in this chapter. Subject to 4 commission approval, a claim based upon an application for 5 monies may be compromised. However, the commission is not 6 bound by the compromise or stipulation of the licensee. 7 (B) Upon payment of a claim, the license of the person against 8 whom the claim was applied is suspended or revoked, as the 9 commission determines. The licensee must not be issued another 10 license until he repays the monies from his claim to the fund, 11 including interest at the rate of eight percent a year. Nothing in 12 this section prevents the commission or other authority from 13 pursuing other remedies at law or equity. 14 (C) An applicant receiving monies from the fund shall subrogate 15 rights relative to the claim to the commission to the extent of 16 monies paid, including interest, and shall cooperate with the 17 commission in the prosecution of the subrogated claim. Amounts 18 recovered against the licensee or other responsible parties must be 19 deposited into the fund, less costs and expenses of collection. 20 21 Section 40-6-230. Payments from the fund are limited as 22 follows: 23 (1) Only the applicant’s actual damages may be paid from the 24 fund. No applicant may recover punitive, special, or consequential 25 damages or attorney’s fees. 26 (2) The fund is not liable for more than ten thousand dollars for 27 each transaction, regardless of the number of persons aggrieved. 28 (3) The liability of the fund may not exceed in the aggregate 29 twenty thousand dollars for one licensee in one calendar year. 30 (4) If the maximum liability of the fund is insufficient to pay in 31 full the valid claims of aggrieved persons whose claims relate to 32 the same transaction or to the same licensee, the amount for which 33 the fund is liable must be distributed among the claimants in a ratio 34 that their respective claims bear to the total claims or in a manner 35 the commission considers equitable. The commission in its sole 36 discretion may join in one action claims having a common factual 37 basis so that an equitable distribution from the fund may be 38 achieved. 39 (5) A party aggrieved and awarded payment by a final commission 40 decision has a vested right for payment. Claims against the fund 41 must be made in the same order as the awards were authorized. If 42 claims against the fund exceed the monies in it, the commission 43 shall satisfy unpaid claims as soon as sufficient monies are

1 [4392] 16 1 deposited. An award is not a claim against the State if it cannot be 2 paid due to a lack of monies in the fund. 3 4 Section 40 - 6 - 05. Unless otherwise provided for in this 5 chapter, Article 1, Chapter 1 of Title 40 applies to auctioneers 6 regulated by the Department of Labor, Licensing and Regulation. 7 However, if there is a conflict between this chapter and Article 1, 8 Chapter 1 of Title 40, the provisions of this chapter control. 9 10 Section 40 - 6 - 10. (A) There is created the South Carolina 11 Auctioneers’ Commission composed of five members to be 12 appointed by the Governor in accordance with Section 40 - 1 - 50. 13 The Governor shall consider nominations from any individual, 14 group, or association. The terms of the members are for three 15 years and until their successors are appointed and qualify. A 16 vacancy must be filled in the manner of the original appointment 17 for the unexpired portion of the term only. 18 (B) At least three members of the commission must be licensed 19 auctioneers and must be active in the auction profession. At least 20 one member must not be connected with the auction business. A 21 majority of the members of the commission constitute a quorum; 22 however, if there is a vacancy on the commission, a majority of the 23 members serving constitutes a quorum and any action taken by the 24 commission must be by a positive majority vote of the members 25 constituting a quorum. The members shall elect from among 26 themselves a chairman who serves for one year and until a 27 successor is elected and qualifies. No member may serve more 28 than two successive terms as chairman. The members of the 29 commission shall receive the same per diem, mileage, and 30 subsistence provided by law for members of state commissions, 31 committees, and commissions. 32 33 Section 40 - 6 - 20. For the purposes of this chapter: 34 (1) ‘Absolute auction’ means the sale of real or personal 35 property at auction whereby every item offered from the block is 36 sold to the highest bidder without reserve and without the 37 requirements of a minimum bid or other conditions which limit the 38 sale other than to the highest bidder. 39 (2) ‘Auction’ means the sale of goods or real estate by means 40 of exchanges between an auctioneer and a member of an audience, 41 the exchanges consisting of a series of invitations for offers made 42 by the auctioneer, offers by members of the audience, and the 43 acceptance by the auctioneer of the highest or most favorable offer.

1 [4392] 17 1 (3) ‘Auction firm’ means any business entity which engages in 2 the business of conducting or offering to conduct auctions. 3 (4) ‘Auctioneer’ means a person who conducts or offers to 4 conduct auctions, including apprentice auctioneers. 5 (5) ‘Business entity’ means a sole proprietorship, partnership, 6 limited liability partnership, corporation, limited liability company, 7 or other business association. 8 (6) ‘Commission’ means the South Carolina Auctioneers’ 9 Commission. 10 (7) ‘Estate auction’ means the sale at auction of property of a 11 specified deceased person or the property of a specified living 12 person’s estate. Estate auctions may contain property other than 13 that of the specified living or deceased person. The inclusion of 14 additional property must be included in all advertising and auction 15 announcements. 16 (8) ‘Fund’ means the Auctioneer Recovery Fund established 17 pursuant to Section 40 - 6 - 330. 18 (9) ‘Owner’ means the bona fide owner of the property being 19 offered for sale. In the case of a partnership, owner means a 20 general partner in the partnership that owns the property being 21 offered for sale; in the case of a limited partnership, the partnership 22 must have filed a certificate of limited partnership as required by 23 Section 33 - 42 - 210, and owner means a general partner as named in 24 the filing required. In the case of a corporation, owner means a 25 director of the corporation that owns the property being offered for 26 sale, and the corporation must be authorized by the Secretary of 27 State to conduct business in the State. 28 29 Section 40 - 6 - 30. It is unlawful for a person to practice as an 30 auctioneer in this State without being licensed in accordance with 31 this chapter, except as provided for in Section 40 - 6 - 370. 32 33 Section 40 - 6 - 50. (A) The Department of Labor, Licensing and 34 Regulation shall provide all administrative, fiscal, investigative, 35 inspectional, clerical, secretarial, and license renewal operations 36 and activities of the commission in accordance with Section 37 40 - 1 - 50. 38 (B) The commission is the sole licensing authority for all 39 licenses issued pursuant to this chapter and has the exclusive 40 authority to discipline licensees. 41 (C) A person licensed as an auctioneer shall pay an annual 42 license fee to the commission. Funds derived under this chapter 43 must be paid to the State Treasurer who shall keep them in the

1 [4392] 18 1 manner provided for other agencies and commissions of the State. 2 The commission shall establish license and examination fees by 3 regulation. 4 5 Section 40 - 6 - 60. The commission may adopt rules governing 6 its proceedings and may promulgate regulations necessary to carry 7 out the provisions of this chapter. 8 9 Section 40 - 6 - 70. If the Director of the Department of Labor, 10 Licensing and Regulation or the commission has reason to believe 11 that an individual or firm has become unfit to engage in the 12 conducting of auctions or has violated a provision of this chapter 13 or a regulation promulgated under this chapter or if an individual 14 files a written complaint with the commission or the director of the 15 Department of Labor, Licensing and Regulation, charging an 16 individual or firm with the violation of a provision of this chapter 17 or a regulation promulgated under this chapter, the commission 18 must approve the initiation of an investigation. 19 20 Section 40 - 6 - 80. For the purpose of an investigation or 21 proceeding under this chapter, the commission or its designated 22 agent may administer oaths and upon its own motion or upon 23 request of any party, shall subpoena witnesses, compel their 24 attendance, take evidence, and require the production of any matter 25 which is relevant to the investigation, including the existence, 26 description, nature, custody, condition, and location of any books, 27 documents, or other tangible items and the identity and location of 28 persons having knowledge of relevant facts or any other matter 29 reasonably calculated to lead to the discovery of material evidence. 30 Upon failure to obey a subpoena or to answer questions 31 propounded by the commission or its designated agent and upon 32 reasonable notice to all persons affected, the commission may 33 apply to the circuit court for an order compelling compliance. 34 35 Section 40 - 6 - 90. Any hearing that is conducted as a result of 36 an investigation must be conducted in accordance with Section 37 40 - 1 - 90. 38 39 Section 40 - 6 - 100. (A) In addition to other remedies provided 40 for in this chapter or Chapter 1 of Title 40, the commission in 41 accordance with Section 40 - 1 - 100 may issue a cease and desist 42 order or may petition an administrative law judge for a temporary

1 [4392] 19 1 restraining order or other equitable relief to enjoin a violation of 2 this chapter or a regulation promulgated under this chapter. 3 (B) If the commission has reason to believe that a person is 4 violating or intends to violate a provision of this chapter or a 5 regulation promulgated under this chapter, it may, in addition to all 6 other remedies, order the person to desist immediately and refrain 7 from the conduct. The commission may apply to an administrative 8 law judge for an injunction restraining the person from the 9 conduct. The judge may issue a temporary injunction ex parte not 10 to exceed ten days and, upon notice and full hearing, may issue 11 any other order in the manner it considers proper. No bond may be 12 required of the commission by the judge as a condition to the 13 issuance of an injunction or order contemplated by the provisions 14 of this section. 15 16 Section 40 - 6 - 110. (A) In addition to the grounds of 17 misconduct provided for in Section 40 - 1 - 110, the commission may 18 take action, pursuant to Section 40 - 6 - 210, against a licensee or a 19 person who has unlawfully assumed to act in the capacity as an 20 auctioneer if the person or licensee is found by the commission to 21 have: 22 (1) violated this chapter or a regulation promulgated under 23 this chapter or a directive of the commission; or 24 (2) engaged in a continued and flagrant course of 25 misrepresentation or made false promises or authorized an agent of 26 the licensee to make misrepresentations or false promises; 27 (3) failed to account for or to pay over within a reasonable 28 time, not to exceed thirty days, money belonging to another which 29 has come into the licensee’s possession through an auction sale; 30 (4) used misleading or untruthful advertising; 31 (5) engaged in conduct in connection with a sales 32 transaction, which demonstrates bad faith or dishonesty; 33 (6) knowingly used false bidders, cappers, or pullers or 34 knowingly made a material false statement or representation; 35 (7) been convicted of a felony or an act involving fraud or 36 moral turpitude. Forfeiture of a bond or a plea of nolo contendere 37 is the equivalent of a conviction; 38 (8) willfully failed to properly and fully complete an 39 application or made a false statement or gave false information in 40 connection with an application for a license or renewal or 41 reinstatement of a license or an investigation by the commission or 42 the commission’s designated agent;

1 [4392] 20 1 (9) failed to maintain or to deposit in a trust or escrow 2 account in an insured bank or savings and loan association within 3 three business days funds received for another person through sale 4 at auction, unless otherwise required by law; 5 (10) failed to pay a fine assessed or ordered by the 6 commission under Section 40 - 6 - 210; 7 (11) willfully failed to properly make a disclosure or to 8 provide documents or information required by this chapter or the 9 commission; 10 (12) demonstrated lack of financial responsibility; 11 (13) knowingly performed an act, which substantially assists 12 a person to conduct an auction illegally; 13 (14) sustained physical or mental impairment or disability 14 which renders practice dangerous to the public; 15 (15) practiced during the time his license has lapsed or been 16 suspended or revoked; 17 (16) practiced the profession or occupation while under the 18 influence of alcohol or drugs or uses alcohol or drugs to such a 19 degree as to render him unfit to practice his profession or 20 occupation. 21 (B) In addition to other remedies and actions incorporated in 22 this chapter, the license of a licensee adjudged mentally 23 incompetent by a court of competent jurisdiction must be 24 suspended automatically by the commission until the licensee is 25 adjudged competent by a court of competent jurisdiction. 26 27 Section 40 - 6 - 115. The commission has jurisdiction over the 28 actions of licensees and former licensees as provided in Section 29 40 - 1 - 115. 30 31 Section 40 - 6 - 120. (A) The commission, in addition to the 32 authority granted to it pursuant to Section 40 - 1 - 120, may deny, 33 suspend, revoke, or restrict a license and may assess a fine in 34 accordance with Section 40 - 6 - 210. The authority of the 35 commission to revoke or suspend a license for violation of this 36 chapter or a regulation promulgated under this chapter includes the 37 authority to place a licensee on probation upon conditions to be 38 determined by the commission. 39 (B) A final order of the commission finding that a licensee is 40 guilty of any offense charged in a formal accusation becomes 41 public knowledge except for a final order dismissing the 42 accusation or imposing a private reprimand.

1 [4392] 21 1 (C) The commission may impose a civil fine of up to five 2 thousand dollars for each violation of a provision of this chapter or 3 a regulation promulgated under this chapter; however, the total 4 fines may not exceed ten thousand dollars. 5 6 Section 40 - 6 - 130. The Commission may deny licensure to an 7 applicant based on the same grounds for which the commission 8 may take disciplinary action against a licensee as provided in 9 Section 40 - 1 - 130. 10 11 Section 40 - 6 - 140. A license may be denied based on a person’s 12 prior criminal record as provided for in Section 40 - 1 - 140. 13 14 Section 40 - 6 - 150. A licensee under investigation for a violation 15 of this chapter or a regulation promulgated under this chapter may 16 voluntarily surrender the license in accordance with Section 17 40 - 1 - 150. 18 19 Section 40 - 6 - 160. A person aggrieved by a final action of the 20 commission may seek review of the decision in accordance with 21 Section 40 - 1 - 160. 22 23 Section 40 - 6 - 170. A person found in violation of this chapter or 24 regulations promulgated under this chapter may be required to pay 25 costs associated with the investigation and prosecution of the case 26 in accordance with Section 40 - 1 - 170. 27 28 Section 40 - 6 - 180. All costs and fines imposed pursuant to this 29 chapter must be paid in accordance with and are subject to the 30 collection and enforcement provisions of Section 40 - 1 - 180. 31 32 Section 40 - 6 - 190. Investigations and proceedings conducted 33 under the provisions of this chapter are confidential and all 34 communications are privileged as provided for in Section 35 40 - 1 - 190. 36 37 Section 40 - 6 - 200. A person who violates the provisions of this 38 chapter is guilty of a misdemeanor and, upon conviction, must be 39 imprisoned not more than one year or fined not more than one 40 thousand dollars. 41 42 Section 40 - 6 - 210. The Department of Labor, Licensing and 43 Regulation, on behalf of the commission and in accordance with

1 [4392] 22 1 Section 40 - 1 - 210, may petition an administrative law judge in the 2 name of the State, for injunctive relief against a person violating 3 this chapter. 4 5 Section 40 - 6 - 220. (A) To be licensed as an apprentice 6 auctioneer, an individual must: 7 (1) be eighteen years of age or older; 8 (2) submit a written application on a form approved by the 9 commission naming a licensed auctioneer to serve as the 10 supervisor of the apprentice along with the required fee; 11 (3) achieve a passing score on a written examination 12 approved by the commission testing the applicant’s understanding 13 of the law relating to auctioneers and auctions, ethical practices for 14 auctioneers, and the mathematics applicable to the auctioneer 15 business. The examination may not be taken more than one time 16 during any six - month period following the second failure of the 17 examination; 18 (4) provide a criminal history conviction record from the 19 South Carolina Law Enforcement Division and affirm that the 20 applicant has not been convicted of a felony or any other crime 21 involving fraud or moral turpitude during the preceding five years; 22 (5) provide a credit record satisfactory to the commission 23 which must be obtained by the commission. A fee of ten dollars 24 must be paid to the commission for the credit investigation. 25 (B) No apprentice auctioneer may enter into an agreement to 26 conduct an auction or conduct an auction without the express 27 written approval of the supervisor of the apprentice auctioneer. 28 The supervisor shall review, at regular intervals, the records that 29 the apprentice auctioneer is required to maintain to ensure they are 30 current and accurate. 31 32 Section 40 - 6 - 230. (A) To be licensed as an auctioneer, an 33 individual must: 34 (1) be eighteen years of age or older; 35 (2) submit a written application on a form approved by the 36 commission along with the required fee; 37 (3) have satisfactorily completed: 38 (a) one year of apprenticeship; or 39 (b) eighty hours of classroom instruction in a course in 40 auctioneering at an institution approved by the commission, or the 41 substantial equivalent and achieve a passing score on a written 42 examination approved by the commission testing the applicant’s 43 understanding of the law relating to auctioneers and auctions,

1 [4392] 23 1 ethical practices for auctioneers, and the mathematics applicable to 2 the auctioneer business. The examination may not be taken more 3 than one time during any six - month period following the second 4 failure of the examination; 5 (4) provide a criminal history conviction record from the 6 South Carolina Law Enforcement Division and affirm that the 7 applicant has not been convicted of a felony or any other crime 8 involving fraud or moral turpitude during the preceding five years; 9 (5) provide a credit record satisfactory to the commission 10 and pay a ten dollar fee to the commission to obtain the credit 11 report. 12 (B) To be licensed as a purebred livestock auctioneer, an 13 individual must: 14 (1) be eighteen years of age or older; 15 (2) submit a written application on a form approved by the 16 commission along with the required fee; 17 (3) have satisfactorily completed: 18 (a) one year of apprenticeship; or 19 (b) eighty hours of classroom instruction in a course in 20 auctioneering at an institution approved by the commission, or the 21 substantial equivalent; 22 (4) provide a criminal history conviction record from the 23 South Carolina Law Enforcement Division and affirm that the 24 applicant has not been convicted of a felony or any other crime 25 involving fraud or moral turpitude during the preceding five years; 26 (5) provide a credit record satisfactory to the commission 27 and pay a ten dollar fee to the commission to obtain the credit 28 report. 29 (C) To be licensed as a tobacco auctioneer, an individual must: 30 (1) be eighteen years of age or older; 31 (2) submit a written application on a form approved by the 32 commission along with the required fee; 33 (3) have satisfactorily completed: 34 (a) one year of apprenticeship; or 35 (b) eighty hours of classroom instruction in a course in 36 auctioneering at an institution approved by the commission, or the 37 substantial equivalent; 38 (4) provide a criminal history conviction record from the 39 South Carolina Law Enforcement Division and affirm that the 40 applicant has not been convicted of a felony or any other crime 41 involving fraud or moral turpitude during the preceding five years;

1 [4392] 24 1 (5) provide a credit record satisfactory to the commission 2 and pay a ten dollar fee to the commission to obtain the credit 3 report. 4 5 Section 40 - 6 - 235. (A) To be licensed as an auction firm, a 6 business entity must: 7 (1) submit an application on forms approved by the 8 commission, along with the required fee; 9 (2) provide the commission with an authorization by the 10 South Carolina Secretary of State’s office to transact business in 11 this State; 12 (3) if owned or managed by a: 13 (a) licensed auctioneer, provide the commission with the 14 name of the auctioneer and written evidence of the auctioneer’s 15 authority to make the decisions affecting the manner in which the 16 firm does business; or 17 (b) person not licensed as an auctioneer under this 18 chapter, achieve a passing score on a written examination 19 approved by the commission intended to demonstrate a thorough 20 understanding of the law relating to the conduct of the auction 21 business and other matters the commission considers appropriate. 22 23 Section 40 - 6 - 240. (A) All licenses issued under this chapter 24 must be issued by the commission and are valid from July first of 25 the year issued or from the date issued, whichever is later, through 26 the following June thirtieth unless revoked or suspended pursuant 27 to this chapter. Any license other than an apprentice license may 28 be renewed annually. An apprentice license may be renewed one 29 time. No examination is required for renewal of a license if the 30 application for renewal is made within ninety days of the 31 expiration of the license. 32 (B) When a licensee applies for renewal, the licensee shall 33 submit proof with the renewal form, in a form acceptable to the 34 commission, that the licensee has acquired commission - approved 35 continuing education of at least four hours within the previous 36 twelve months. Continuing education is not required of apprentice 37 auctioneers and auction firm license holders unless the owner or 38 manager is a licensed auctioneer. 39 (C) The renewal of a lapsed license is not retroactive and does 40 not limit the authority of the courts or the commission to take 41 disciplinary action against a licensee who engages in the auction 42 profession without a current license. 43

1 [4392] 25 1 Section 40 - 6 - 250. Unless exempt from licensure under Section 2 40 - 6 - 370, no person shall sell or offer to sell goods or real estate at 3 auction in this State or perform an act for which an auctioneer or 4 apprentice auctioneer license is required unless the person holds a 5 currently valid license issued under this chapter. 6 7 Section 40 - 6 - 260. The commission shall publish at least once a 8 year a list of names and addresses of all persons and firms holding 9 valid apprentice auctioneer, auctioneer, or firm licenses. 10 11 Section 40 - 6 - 270. (A) A person who holds a valid auctioneer 12 license in another state may apply for and be issued a license under 13 this chapter if the requirements of the state of licensure were, on 14 the date of initial licensure, substantially equivalent to the 15 requirements of this chapter. 16 (B) An applicant under this section shall submit an application 17 and other documentation and proof of eligibility for licensure as 18 required by the commission in regulation. 19 (C) A license issued pursuant to this section is valid from the 20 date of issuance to the following June thirtieth and may be 21 renewed from year to year unless suspended or revoked pursuant 22 to this chapter or a regulation promulgated under this chapter. 23 24 Section 40 - 6 - 280. It is unlawful to conduct or advertise that an 25 auction is “absolute” if minimum opening bids are required or 26 other conditions are placed on the sale which limit the sale other 27 than to the highest bidder. 28 29 Section 40 - 6 - 290. (A) No licensee may conduct an auction in 30 this State without first having a written agreement with the owner 31 of any property to be sold. The agreement shall contain the terms 32 and conditions upon which the licensee received the goods for 33 sale. The licensee shall provide the owner with a signed copy of 34 the agreement and shall keep at least one copy for three years from 35 the date of the agreement. A written agreement is not required for 36 a sale at auction if the sale is made at an auction house or similar 37 place where members of the public are generally offered the 38 opportunity to present goods for sale. Copies of all contracts must 39 be made available to the commission or its designated agent upon 40 request. 41 (B) A licensee shall maintain accurate records upon receipt of 42 goods for auction and before their sale, which shall include the 43 name and address of the person who employed the licensee to sell

1 [4392] 26 1 the goods at auction and the name and address of the owner of the 2 goods to be sold. These records must be open for inspection by the 3 commission or its designated agent upon request. 4 (C) A licensee shall have his pocket card license in his 5 possession at each auction he conducts. 6 7 Section 40 - 6 - 300. (A) A licensee who handles the proceeds of 8 an auction shall maintain a trust or escrow account with an insured 9 bank or savings and loan association and shall deposit in this 10 account within three business days all funds received for the 11 benefit of another person, unless otherwise required by law or the 12 owner or consignor of the property auctioned is paid within three 13 business days. 14 (B) Upon issuance or renewal of a license, the licensee must 15 provide the commission with the name of the bank and the account 16 number of the trust or escrow account in which the funds of others 17 are maintained and authorization permitting the examination of the 18 account by the commission or its authorized representative, unless 19 the licensee has provided certification to the commission that 20 funds are paid within three business days. A licensee must notify 21 the commission by certified mail, return receipt requested, of a 22 change of bank, account number, or location of the trust or escrow 23 account and, at that time, shall complete the required authorization 24 for examination of the account by the commission or its authorized 25 representative. 26 (C) A licensed auctioneer or licensed apprentice auctioneer in 27 this State who works directly for a licensed auction firm or who 28 works directly for another licensed auctioneer who maintains an 29 active escrow account may use that escrow account and number in 30 all applications for licensure or renewal, if the escrow account is 31 used solely for the purpose of holding funds of others in relation to 32 auctions. 33 (D) A licensee shall maintain complete records for at least three 34 years showing the deposit, maintenance, and withdrawal of trust or 35 escrow funds. These records must be open for inspection by the 36 commission or its designated agent periodically, upon request, and 37 without prior notice. 38 39 Section 40 - 6 - 310. No property other than the property of a 40 specified deceased person or the property of a specified living 41 person’s estate may be sold at auction if the auction is conducted 42 or advertised only as an ‘estate sale’. However, items other than 43 those of the specified estate may be sold at the sale if all

1 [4392] 27 1 advertisements of the sale specify which items do not belong to the 2 estate. 3 4 Section 40 - 6 - 320. Notwithstanding any other provision of law, 5 municipalities may not enact ordinances to provide for the 6 licensing of auctioneers. 7 8 Section 40 - 6 - 330. (A) There is created the Auctioneer 9 Recovery Fund to be maintained by the commission for the 10 payment of claims to persons injured by licensees under this 11 chapter. Monies in the fund must be held and carried forward by 12 the State Treasurer separate from the general fund. At least one 13 hundred thousand dollars for recovery and guaranty purposes must 14 be maintained in the fund. Fund monies may be invested and 15 reinvested by the State Treasurer in interest bearing accounts, 16 interest accruing to the fund. Sufficient liquidity must be 17 maintained so that there are monies available to satisfy claims 18 processed through the commission. Expenditures from the fund 19 must be made in accordance with this chapter without legislative 20 appropriation. Warrants for expenditures must be drawn by the 21 Comptroller General pursuant to claims approved and signed by 22 the chairman of the commission. 23 (B) When monies, including principal and interest, are less than 24 forty - five thousand dollars at the end of the fiscal year after 25 payment of claims and expenses, an individual or firm licensee 26 shall pay, in addition to the license fees required under this 27 chapter, a fund contribution fee to be determined by the 28 commission. After the fund is initially established, a new 29 applicant for individual or firm licensure also shall pay a fund 30 contribution fee. However, any fee assessed under this subsection 31 may not exceed fifty dollars a year. 32 (C) The commission may use contents of the fund in excess of 33 one hundred thousand dollars to: 34 (1) promote education and research in the auctioneer 35 profession in order to benefit persons licensed under this chapter 36 and to improve the efficiency of the profession; 37 (2) underwrite educational seminars, training centers, and 38 other forms of educational projects for the use and benefit of 39 licensees; 40 (3) sponsor, contract for, or underwrite education and 41 research projects in order to advance the auctioneers profession in 42 South Carolina; and

1 [4392] 28 1 (4) cooperate with associations of auctioneers or other 2 groups in order to promote the enlightenment and advancement of 3 the auctioneer profession in South Carolina. 4 (D) If monies, including principal and interest, in the fund 5 exceed one hundred twenty - five thousand dollars at the end of the 6 fiscal year after payment of claims, expenses, and educational 7 program funding, the amount in excess must be deposited in the 8 state general fund. 9 (E) Persons licensed as auctioneers pursuant to Section 10 40 - 6 - 230(B) or (C) are exempt from contributing to the fund. 11 12 Section 40 - 6 - 340. (A) A person aggrieved by the conduct of a 13 licensee may file a claim against the fund if the: 14 (1) facts giving rise to the claim are based on a specific 15 violation of this chapter or regulations promulgated under this 16 chapter; 17 (2) claimant has made demand upon the licensee by certified 18 mail, return receipt requested, for actual damages, and the demand 19 has been refused or ignored; 20 (3) claimant is not licensed under this chapter or a party 21 jointly responsible for the claim; 22 (4) the claim is filed no later than one year from the date of 23 discovery of the loss. 24 (B) The claim must be made under oath and upon a form the 25 commission prescribes and shall contain: 26 (1) name and address of the claimant; 27 (2) name and address of the licensee and his last known 28 working address; 29 (3) a detailed statement of the events precipitating the loss 30 and documents and other evidence supporting the claim; 31 (4) amount of monies sought and evidence supporting this 32 amount; 33 (5) copies of complaints and other legal process initiated, if 34 any; 35 (6) disclosure of partial satisfaction received, offered, or 36 otherwise available from the licensee, including a bond, an 37 insurance policy, or another source of funds. 38 (C) Upon receiving a claim in proper form, the commission 39 shall forward the claim by certified mail, return receipt requested, 40 to the last known address of the licensee. The licensee, within 41 thirty days, shall file a verified answer to the claim. If no answer 42 is filed within thirty days, the licensee is in default, and the 43 commission shall schedule a hearing on the claim. If the licensee

1 [4392] 29 1 fails to timely answer, the commission shall investigate the claim 2 for not more than sixty days and promptly schedule a hearing on 3 the claim. The licensee, commission, and claimant may present 4 evidence and question and cross - examine witnesses as parties to 5 the hearing. 6 (D) Failure of the claimant to comply with this section is a 7 waiver of rights under this section. 8 (E) No claim may be made against or paid from the fund in 9 connection with a licensee who is licensed pursuant to Section 10 40 - 6 - 230 (B) or (C). 11 12 Section 40 - 6 - 350. (A) Claims made against the fund pursuant 13 to Section 40 - 6 - 340, must be heard by the commission and if 14 ordered, must be paid in accordance with Section 40 - 6 - 360. 15 Subject to commission approval, a claim may be compromised; 16 however, the commission is not bound by the compromise or any 17 stipulation of the licensee. 18 (B) Upon payment of a claim, the license of the person against 19 whom the claim was made must be suspended immediately or 20 revoked, as the commission determines. The licensee must not be 21 issued another license until he repays the fund the monies paid on 22 the claim against him, including interest at the rate of eight percent 23 a year. Nothing in this section prevents the commission or any 24 other authority from pursuing other remedies at law or equity. 25 (C) A claimant receiving monies from the fund shall subrogate 26 his rights relative to the claim to the commission to the extent of 27 monies paid, including interest, and shall cooperate with the 28 commission in the prosecution of the subrogated claim. Amounts 29 recovered against the licensee or other responsible parties must be 30 deposited into the fund, less costs and expenses of collection. 31 32 Section 40 - 6 - 360. Payments from the fund are limited as 33 follows: 34 (1) Only the claimant’s actual damages may be paid from the 35 fund. No claimant may recover punitive, special, or consequential 36 damages or attorney’s fees. 37 (2) The fund is not liable for more than ten thousand dollars for 38 each transaction, regardless of the number of persons aggrieved. 39 (3) The liability of the fund may not exceed in the aggregate 40 twenty thousand dollars for one licensee in one calendar year. 41 (4) A party aggrieved and awarded payment by a final 42 commission decision has a vested right for payment. Claims 43 against the fund must be made in the same order as the awards

1 [4392] 30 1 were authorized. If claims against the fund exceed the monies in 2 the fund, the commission shall satisfy unpaid claims as soon as 3 sufficient monies are deposited. An award is not a claim against 4 the State if it cannot be paid due to a lack of monies in the fund. 5 (5) Notwithstanding item (4), if the maximum liability of the 6 fund is insufficient to pay in full the valid claims of aggrieved 7 persons whose claims relate to the same transaction or to the same 8 licensee, the amount for which the fund is liable must be 9 distributed among the claimants on a pro rata basis. The 10 commission may join in one action claims having a common 11 factual basis so that an equitable distribution from the fund may be 12 achieved. 13 14 Section 40 - 6 - 370. Notwithstanding Section 40 - 6 - 30, a person is 15 not required to be licensed as an auctioneer to conduct: 16 (1) auctions conducted by the owner of all of the goods 17 being offered unless the owner’s regular course of business 18 includes engaging in the sale of goods or real estate by means of 19 auction or unless the owner originally acquired the goods for the 20 purpose of resale; 21 (2) auctions conducted by or under the direction of a public 22 authority unless conducted by a person or entity engaged in the 23 business of organizing, arranging, or conducting auction sales for 24 compensation or a person or entity licensed pursuant to this 25 chapter or in any other jurisdiction to conduct auctions; 26 (3) auctions conducted pursuant to a judicial order; 27 (4) sales required by law to be at auction unless conducted 28 by a person or entity engaged in the business of organizing, 29 arranging, or conducting auction sales for compensation or a 30 person or entity licensed pursuant to this chapter or in any other 31 jurisdiction to conduct auctions; 32 (5) auctions conducted on behalf of a charitable, civic, or 33 religious organization if the person conducting the sale receives no 34 compensation unless conducted by a person or entity engaged in 35 the business of organizing, arranging, or conducting auction sales 36 for compensation or a person or entity licensed pursuant to this 37 chapter or in any other jurisdiction to conduct auctions; 38 (6) auctions of motor vehicles among motor vehicle dealers 39 if conducted by an auctioneer licensed under this chapter; 40 (7) auctions by a trustee pursuant to a valid power of sale. 41 42 Section 40 - 6 - 380. If a provision of this chapter or the 43 application of a provision to a person or circumstance is held

1 [4392] 31 1 invalid, the invalidity does not affect other provisions or 2 applications of this chapter which can be given effect without the 3 invalid provision or application, and to this end the provisions of 4 this chapter are severable.” 5 6 SECTION 2. This act takes effect upon approval by the 7 Governor. 8 ----XX----

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