GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1999

H	2 

HOUSE BILL 301
Committee Substitute Favorable 4/12/99

Short Title:  Auctioneer Amendments.	(Public)

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Sponsors:

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Referred to: 

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March 4, 1999

A BILL TO BE ENTITLED
AN ACT TO AMEND THE EDUCATIONAL REQUIREMENTS FOR AUCTIONEERS, APPRENTICE AUCTIONEERS, AND PRINCIPALS IN AN AUCTION FIRM, TO  ALLOW THE AUCTIONEERS COMMISSION TO ASSESS A CIVIL PENALTY IN CERTAIN CIRCUMSTANCES, TO INCREASE FEES, AND TO AUTHORIZE CRIMINAL HISTORY CHECKS FOR APPLICANTS FOR AN AUCTIONEER'S LICENSE.
The General Assembly of North Carolina enacts:
Section 1. G.S. 85B-3 reads as rewritten:
"§ 85B-3.  Auctioneers Commission.
(a)	There shall be a five-member North Carolina Auctioneers Commission having the powers and responsibilities set out in this Chapter. The Governor shall appoint the members of the Commission, at least three of whom, and their successors, shall be from nominations submitted by the Auctioneers Association of North Carolina. The Auctioneers Association shall submit, within 45 days of when the vacancy occurs, at least three names for each position for which it is entitled to make a nomination. Of the initial five members of the Commission one shall be appointed for a one-year term, two shall be appointed for two-year terms and two for three-year terms; thereafter, each new member shall be appointed for a term of three years. Any vacancy shall be filled for the remainder of the unexpired term only. Each member shall continue in office until his successor is appointed and qualified. No member shall serve more than two complete consecutive terms.
(b)	At least three members of the Commission shall be experienced auctioneers who are licensed under this Chapter. One member shall be a person who shall represent the public at large and shall not be licensed under this Chapter.
(c)	The Commission shall employ an executive director and other employees as needed to carry out the duties of this Chapter. All employees shall serve at the pleasure of the Commission.
(d)	Any action that may be taken by the Commission may be taken by vote of any three of its members.
(e)	The members of the Commission shall elect from among themselves a chairman to serve a one-year term. No person shall serve more than two consecutive terms as chairman.
	(g)	Members of the Commission shall receive the compensation set for members of occupational licensing boards by G.S. 93B-5."
Section 2.  Chapter 85B of the General Statutes is amended by adding a new section to read:
"§ 85B-3.1.  Auctioneers Commission; powers and duties.
(a)	The Commission shall have the following powers and duties:
(1)	To receive and act upon applications for licenses.
(2)	To issue licenses.
(3)	To deny, suspend, and revoke licenses pursuant to G.S. 85B-8.
(3)	To adopt rules for auctioneers and auctions that are consistent with the provisions of this Chapter and the General Statutes.
(4)	To issue declaratory rulings.
(b)	The Commission may assess a civil penalty not in excess of two thousand dollars ($2,000) for acts prohibited in G.S. 85B-8.  All civil penalties collected by the Commission shall be remitted to the school fund of the county in which the violation occurred.  Before imposing and assessing a civil penalty and fixing the amount thereof, the Commission shall, as a part of its deliberations, take into consideration the following factors:
(1)	The nature, gravity, and persistence of the particular violation.
(2)	The appropriateness of the imposition of a civil penalty when considered alone or in combination with other punishment.
(3)	Whether the violation was willful.
(4)	Any other factors that would tend to mitigate or aggravate the violations found to exist."
Section 3.  Chapter 85B of the General Statutes is amended by adding a new section to read:
"§ 85B-3.2.  Criminal history record checks of applicants for licensure.
(a)	Definitions. – The following definitions shall apply in this section:
(1)	Applicant – An applicant for initial licensure as an auctioneer.
(2)	Criminal history – A State or federal history of conviction of a crime, whether a misdemeanor or felony, that bears upon an applicant's fitness to be licensed as an auctioneer.
(b)	The Commission shall ensure that the State criminal history of an applicant is checked. National criminal history  checks are authorized for an applicant who has not resided in the State of North Carolina during the past five years.  The Commission shall provide to the North Carolina Department of Justice the fingerprints of the applicant to be checked, a form signed by the applicant to be checked consenting to the check of the criminal history and to the use of fingerprints and other identifying information required by the State or National Repositories, and any additional information required by the Department of Justice.
(c)	All releases of criminal history information to the Commission shall be subject to, and in compliance with, rules governing the dissemination of criminal history record checks as adopted by the North Carolina Division of Criminal Information. All of the information the Commission  receives through the checking of the criminal history is for the exclusive use of the Commission and shall be kept confidential.
(d)	If the applicant's verified criminal history record check reveals one or more convictions of a crime that is punishable as a felony offense, or the conviction of any crime involving fraud or moral turptitude, the Commission may deny the applicant's license.  However, the conviction shall not automatically prohibit licensure, and the following factors shall be considered by the Commission in determining whether licensure shall be denied:
(1)	The level and seriousness of the crime.
(2)	The date of the crime.
(3)	The age of the person at the time of the crime.
(4)	The circumstances surrounding the commission of the crime, if known.
(5)	The nexus between the criminal conduct of the applicant and the applicant's duties as an auctioneer.
(6)	The prison, jail, probation, parole, rehabilitation, and employment records of the applicant since the date the crime was committed.
(7)	The subsequent commission by the person of a crime.
(e)	The Commission may deny licensure to an applicant who refuses to consent to a criminal history record check or use of fingerprints or other identifying information required by the State or National Repositories of Criminal Histories.
(f)	The Commission shall notify the applicant of the applicant's right to review the criminal history information, the procedure for challenging the accuracy of the criminal history, and the applicant's right to contest the Commission's denial of licensure."
Section 4.  G.S. 85B-4 reads as rewritten:
"§ 85B-4.  Licenses required.
(a)	No person who is not exempt under G.S. 85B-2, shall sell, or offer to sell, goods or real estate at auction in this State or perform any act for which an auction firm license is required unless the person holds a currently valid license issued under this Chapter.
(b)	No person shall be licensed as an apprentice auctioneer, auctioneer, or receive an auction firm license if the person:
(1)	Is under 18 years of age.
(1a)	Is not a high school graduate or the equivalent.  However, a person licensed under this Chapter prior to July 1, 1999, does not need to meet this requirement.
(2)	Repealed by Session Laws 1983, c. 751, s. 6.
(3)	Has within the preceding five years pleaded guilty to, entered a plea of nolo contendere or been convicted of any felony, or committed or been convicted of any act involving fraud or moral turpitude.
(4)	Has had an auctioneer or apprentice auctioneer or auction firm license revoked.
(5)	Has, within the preceding five years, committed any act that constitutes grounds for license suspension or revocation under this Chapter or a Commission rule.
(c)	Each applicant for an apprentice auctioneer license shall submit a written application in a form approved by the Commission and containing at least two statements by residents of the community in which the applicant resides attesting to the applicant's good moral character.
(c1)	Each apprentice auctioneer application and license shall 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 his supervisor. The supervisor shall review all contracts before approving them and shall regularly review the records his apprentice is required to maintain under G.S. 85B-7 to see that they are accurate and current, and shall perform such other supervisory duties as may be required by the Commission.
(d)	No person shall be licensed as an auctioneer unless the person has held an apprentice auctioneer license and served as an apprentice auctioneer for the two preceding years, accumulated sufficient knowledge and experience in such areas of the auctioneer profession as the Commission may deem appropriate, and has taken an examination approved by the Commission and performed on it to the satisfaction of the Commission. The examination shall 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 such other matters relating to auctions as the Commission considers appropriate. The examination shall be given at least twice each year in Raleigh, and at other times and places the Commission designates, but no person shall be allowed to take the examination within six months after having failed it a second time.
Any person who has successfully completed the equivalent of at least 80 hours of classroom instruction in a course in auctioneering at an institution  whose curriculum and instructors meet the qualifications approved or established by the Commission may be licensed as an auctioneer without holding an apprentice license and serving as an apprentice for two years, but shall take the examination required by this subsection and perform on it to the satisfaction of the Commission.
Each applicant for an auctioneer license shall submit a written application in a form approved by the Commission, pay all applicable fees, and consent in writing to a criminal history check as required by G.S. 85B-3.2. If the applicant has been previously licensed as an apprentice auctioneer, the application shall contain an evaluation by the applicant's supervisor of the applicant's performance as an apprentice auctioneer and the applicant's performance in specific areas as required by the Commission. If the applicant is exempted from apprenticeship after completion of the equivalent of at least 80 hours of classroom instruction in auctioneering, the application shall contain a transcript of the applicant's course work in auctioneering. Each application shall be accompanied by statements of at least two residents of the community in which the applicant resides attesting to the applicant's good moral character. The Commission may require verification of any information included in an application for an auctioneer license and may request other information or verification of information provided to determine whether the applicant possesses the good moral character or other qualifications for licensure.
(e)	Each license issued under this Chapter shall be valid from July 1 of the year issued, or from the date issued, whichever is later, to the following June 30 unless sooner revoked or suspended pursuant to this Chapter or a rule of the Commission. A license may be renewed for one year at a time, except an apprentice auctioneer license may not be renewed for more than three times. No examination shall be required for renewal of an auctioneer license if the application for renewal is made within 24 months of the expiration of the previous license.
(e1)	The Commission may require licensees to complete annually not more than six hours of Commission-approved continuing education courses prior to license renewal.  The Commission may impose different continuing education requirements, including no such requirements, upon the classes of licensees under this Chapter.  The Commission may waive any or all continuing education requirements in cases of hardship, disability, or illness, or under other circumstances as the Commission deems appropriate.
(f)	No person shall be issued an auctioneer or apprentice auctioneer license until the person has made the contribution to the Fund as required by G.S. 85B-4.1.
(g)	An auction firm must be licensed by the Board even though no owner or officer of the firm acts as an auctioneer. To be licensed an auction firm must make the contribution to the Fund as required by G.S. 85B-4.1 and must pay the proper fees as set out in G.S. 85B-6. Auction firms are covered by the provisions of G.S. 85B-8.
An auction firm license issued by the Commission is restricted to the persons named in the license and does not inure to the benefit of any other person. Where a license is issued to an auction firm, authority to transact business under the license is limited to the person or persons designated in the application and named in the license.
The designated person or persons, prior to being licensed, shall be required to 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 deems 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 provided they employ or associate themselves with a licensed auctioneer to handle those aspects of the transactions peculiar to the auctioneer profession. Any person or entity, on the effective date of this Chapter, duly licensed as an auction firm in good standing is not required to take any examination in order to maintain or to renew an auction firm license provided that the license does not otherwise expire or lapse and is not suspended or revoked by the Commission.
(h)	The Commission shall publish at least once a year a list of names and addresses of all persons, sole proprietorships, partnerships and corporations holding valid apprentice auctioneer, auctioneer, or auction firm licenses.
(i)	The Commission may investigate as it deems necessary the ethical background of any applicant for licensure under this Chapter."
Section 5. G.S. 85B-4.1 reads as rewritten:
"§ 85B-4.1.  Auctioneer Recovery Fund.
(a)	In addition to license fees, upon application for a license or renewal of a license, the Commission may charge the applicant or licensee up to fifty dollars ($50.00) per year to be included in the Fund.
(b)	The Commission shall maintain at least two hundred thousand dollars ($200,000) in the Fund for use as provided in this Chapter. The Fund may be invested by the State Treasurer in interest bearing accounts, and any interest accrued shall be added to the Fund. Sufficient liquidity shall be maintained to insure that funds will be available to satisfy claims processed through the Board. The Fund may be disbursed by a warrant drawn against the State Treasurer or by other method at the discretion of the State Treasurer.
(c)	The Commission, in its discretion, may use contents of the Fund in excess of two hundred thousand dollars ($200,000) for the following purposes:
(1)	To 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)	To underwrite educational seminars, training centers, and other forms of educational projects for the use and benefit of licensees.
(3)	To sponsor, contract for, or underwrite education and research projects in order to advance the auctioneer profession in North Carolina.
(4)	To cooperate with associations of auctioneers, or other groups, in order to promote the enlightenment and advancement of the auctioneer profession in North Carolina."
Section 6. G.S. 85B-6(a) reads as rewritten:
"§ 85B-6.  Fees; local governments not to charge fees or require licenses.
(a)	The Commission shall collect and remit to the State Treasurer fees in an amount not to exceed the following:
Item	Maximum Fee
Apprentice Auctioneers:
Application for license		$125.00
Issuance or renewal of license		 125.00
Auctioneers:
Application for license		 125.00
Examination		  75.00
Issuance or renewal of license		 250.00
Auction Firms:
Application for license		 125.00
Examination		  75.00
Issuance or renewal of license		 250.00
Reinstatement of License		 75.00.
An application fee for a license and an examination fee are nonrefundable.  The amount payable by a nonresident under G.S. 85B-5 to obtain a nonresident reciprocal auctioneer license is the greater of the amount set in the above table for an examination for and the issuance of an auctioneer's license and the amount the nonresident's state would charge a resident auctioneer of this State to obtain a comparable license from that state.
A reinstatement fee is payable when a person applies for renewal of a license after the license has lapsed for failure to renew it before it expired.  The reinstatement of a lapsed license is not retroactive in effect and does not limit the authority of the courts or of the Commission to take disciplinary action against a person who engages in the auctioneer profession with a lapsed license."
Section 7. G.S. 85B-8 reads as rewritten:
"§ 85B-8.  Prohibited acts; assessment of civil penalty; denial, suspension, or revocation of license. 
(a)	The following shall be grounds for the assessment of a civil penalty in accordance with G.S. 85B-3.1(b) or the denial, suspension, or revocation of an auctioneer, auctioneer apprentice, or auction firm license:
(1)	Any violation of this Chapter or any violation of a rule or regulation duly adopted by the Commission.
(2)	A continued and flagrant course of misrepresentation or making false promises, either by the licensee, an employee of the licensee, or by someone acting on behalf of and with the licensee's consent.
(3)	Any failure to account for or to pay over within a reasonable time, not to exceed 30 days, funds belonging to another which have come into the licensee's possession through an auction sale.
(4)	Any false, misleading, or untruthful advertising.
(5)	Any act of conduct in connection with a sales transaction which demonstrates bad faith or dishonesty.
(6)	Knowingly using false bidders, cappers, or pullers, or knowingly making a material false statement or representation.
(7)	Commingling the funds or property of a client with the licensee's own or failing to maintain and deposit in a trust or escrow account in an insured bank or savings and loan association located in North Carolina funds received for another person through sale at auction.
(8)	Failure to make the required contribution to the Fund.
(9)	The commission or conviction of a crime that is punishable as a felony offense under the laws of North Carolina or the laws of the jurisdiction where committed or convicted, or the commission of any act involving fraud or moral turpitude.
(10)	Failure to properly make any disclosures or to provide documents or information required by this Chapter or by the Commission.
(11)	A demonstrated lack of financial responsibility.
(b)	to (d)	Repealed by Session Laws 1973, c. 1195, s. 5.
(e)	The Commission may upon its own motion or upon the complaint in writing of any person, provided the complaint and any evidence presented with it establishes a prima facie case, hold a hearing and investigate the actions of any auctioneer, apprentice auctioneer, or auction firm, or any person who holds himself or herself out as an auctioneer or apprentice auctioneer, and shall have the power to impose a civil penalty on any licensee, suspend or revoke any license issued under the provisions of this Chapter, or to reprimand or censure any licensee. In all proceedings for the imposition of a civil penalty or the denial, suspension, or revocation of licenses, the provisions of Chapter 150B of the General Statutes including provisions relating to summary suspension shall be applicable. Any person who desires to appeal the denial of an application for any license authorized to be issued under this Chapter shall file a written appeal with the Commission not later than 30 days following notice of denial.
(f)	A person whose license has been denied, suspended, or revoked may not apply in that person's name or in any other manner within the period during which the order of denial, suspension, or revocation is in effect, and no firm, partnership, or corporation in which any person has a substantial interest or exercises management responsibility or control may be licensed during the period."
Section 8. G.S. 85B-9(a) reads as rewritten:
"(a)	Any person, corporation or association of persons violating the provisions of G.S. 85B-4(a) shall be guilty of a Class 1 misdemeanor. The Attorney General of North Carolina, or the Attorney General's designee, shall have concurrent jurisdiction with the district attorneys of this State to prosecute violations of this Chapter."
Section 9. Article 4 of Chapter 114 of the General Statutes is amended by adding a new section to read:
"§ 114-19.8.  Criminal record checks of applicants for auctioneer license.
The Department of Justice may provide to the North Carolina Auctioneers Commission from the State and National Repositories of Criminal Histories the criminal history of any applicant for an auctioneer's license under Chapter 85B of the General Statutes.  Along with the request, the Commission shall provide to the Department of Justice the fingerprints of the applicant, a form signed by the applicant consenting to the criminal record check and the use of fingerprints and other identifying information required by the State or National Repositories, and any additional information required by the Department of Justice.  The applicant's fingerprints shall be forwarded to the State Bureau of Investigation for a check of the State's criminal history record file, and the State Bureau of Investigation shall forward a set of fingerprints to the Federal Bureau of Investigation for a national criminal history record check.  The Commission shall keep all information obtained pursuant to this section confidential.  The Department of Justice may charge a fee to offset the cost incurred by it to conduct a criminal record check under this section.  The fee shall not exceed the actual cost of locating, editing, researching, and retrieving the information."
Section 10.  Sections 3, 4, 6, and 9 of this act become effective July 1, 1999.  Sections 1, 2, and 7 of this act become effective October 1, 1999.  The remainder of this act is effective when it becomes law.