ENGROSSED
COMMITTEE SUBSTITUTE
FOR
Senate Bill No. 507
(By Senators Edgell and Hunter)
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[Originating in the Committee on Government Organization;
reported February 26, 2003.]
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A BILL to amend and reenact sections two, three, five, five-a, six,
six-a, six-b, six-c, seven, eight, eight-a and nine, article
two-c, chapter nineteen of the code of West Virginia, one
thousand nine hundred thirty-one, as amended; and to further
amend said article by adding thereto three new sections,
designated sections five-b, six-d and nine-a, all relating to
auctioneers; license requirements; fees; requiring notice of
change of address; apprentice sponsorship requirements;
reciprocity between states; continuing education requirements;
penalties for violating statutory provisions; license
revocation; and contract requirements.
Be it enacted by the Legislature of West Virginia:
That sections two, three, five, five-a, six, six-a, six-b,
six-c, seven, eight, eight-a and nine, article two-c, chapter
nineteen of the code of West Virginia, one thousand nine hundred
thirty-one, as amended, be amended and reenacted; and that said article be further amended by adding thereto three new sections,
designated section five-b, six-d and nine-a, all to read as
follows:
ARTICLE 2C. AUCTIONEERS.
§19-2C-2. License required.
After the thirtieth day of June, one thousand nine hundred
seventy-four, no person shall conduct an auction as an auctioneer
in this the state of West Virginia unless he or she shall have
first obtained from the commissioner a license therefor.
§19-2C-3. Procedure for license; department of agriculture as
statutory agent for licensees; fee.
Any person who wishes to conduct an auction as an auctioneer
may apply for a license on forms prescribed by the commissioner and
containing such information as the commissioner may require by a
legislative rule promulgated in accordance with article three,
chapter twenty-nine-a of this code. A nonreturnable nonrefundable
application fee of fifty dollars shall accompany each application
for an auctioneer or apprentice auctioneer license, as well as a
license fee of fifty dollars. All fees collected under this
article shall be paid into a special revenue fund known as the
agricultural fees fund as provided in section four-c, article one
of this chapter. in the state treasury to be used by the
department of agriculture for the expressed purpose of
administering and enforcing this article and for providing
continuing education for auctioneers: Provided, That for the fiscal year ending the thirtieth day of June, one thousand nine
hundred ninety-seven, fees collected under this article shall be
paid into the state fund, general revenue
In addition to the payment of fees, an applicant shall file
with his or her application a bond as required in section four of
this article.
The commissioner shall, within thirty days after the receipt
of an application, notify the applicant of his or her eligibility
to be examined at the next regularly scheduled examination, as well
as the date of the examination.
In the event the license is denied, the commissioner shall
refund the license fee submitted with the application to the
applicant.
Licenses issued expire on the thirty-first day of December of
each year but are renewable upon the payment of the annual license
fee within sixty days of the expiration date. Renewals will be
mailed to current licensees. Failure to receive this notice shall
not relieve the individual licensee of the obligation to renew.
Renewals received more than sixty days after the expiration date
are subject to a late renewal fee of twenty-five dollars in
addition to the annual renewal fee. The commissioner shall not
renew licenses which have been expired for more than two years and
the auctioneer or apprentice auctioneer shall take the written and
oral examination and pay the examination fee in order to renew his
or her license. The commissioner shall not renew a license unless
the applicant complies with the other requirements of this article No renewal will be made unless the other requirements of this
article are complied with.
The commissioner shall not issue or renew a license if the
applicant or licensee has been convicted of a felony or crime
involving forgery, embezzlement, obtaining money under false
pretenses, larceny, extortion, conspiracy to defraud or other like
offense or offenses or has been convicted of any other crime in a
court of competent jurisdiction of this or any other state,
district or territory of the United States or of a foreign country
during the five years immediately preceding application or renewal.
Where an auctioneer or apprentice auctioneer requires a
duplicate or replacement license or a license reflecting a change
in information, the auctioneer or apprentice auctioneer shall
submit a fee of five dollars with the request. Should a duplicate
or replacement license or a license reflecting a change in
information be required, the auctioneer or apprentice auctioneer
must submit with such request a fee of ten dollars.
Should a letter of good standing be needed by an auctioneer to
become licensed in another state with whom we maintain reciprocity
or for any valid reason, they must put their request in writing and
submit a 25-dollar processing fee.
The state department of agriculture is the agent for the
purpose of service of process on any licensed auctioneer for any
action occasioned by the performance of the duties of the
auctioneer. Every licensed auctioneer, by virtue of his or her
application for a license, shall be considered to have consented to the statutory agency.
§19-2C-5. Requirements for license; rules; duties of licensee.
(1) Each person seeking a license hereunder after the
effective date of this section shall submit satisfactory evidence
to the commissioner showing:
(a) That he or she has successfully completed the written and
oral examinations provided for in this article;
(b) That he or she has a good reputation;
(c) That he or she is of trustworthy character;
(d) That he or she has met the apprenticeship requirements set
forth in this article, if applicable;
(e) That he or she is a citizen of the United States; and
(f) That he or she has a general knowledge of the
auctioneering profession and the principles involved in conducting
an auction; and
(g) That he or she is at least eighteen years of age.
(2) The commissioner shall promulgate such reasonable rules
and regulations as he or she considers necessary to carry out the
intent and the administration and enforcement of this article,
which said rules and regulations shall be promulgated in accordance
with the applicable provisions of chapter twenty-nine-a of this
code.
(3) Each auctioneer and apprentice auctioneer must carry his
or her pocket license on his or her person and promptly produce for
inspection such license at all sales conducted by or participated
in by such licensee when requested to do so by any person and it upon request. The auctioneer shall keep complete and accurate
records of all transactions engaged in for a period of six months,
which records shall be open to inspection by the commissioner or
his or her authorized representative.
(4) Each applicant must provide a photo ID when taking the
examination.
(5) If a licensed West Virginia auctioneer or auction firm is
contracted by a nonlicensed West Virginia person or company to
conduct auctions in West Virginia, the West Virginia auctioneer,
corporation or firm shall be considered the principal and shall
assume full responsibility for the auction and auctioneers
subcontracted.
(6) If a buyer premium or any surcharge is a condition to sale
at any auction, the amount of the premium or surcharge must be
placed in the advertisement and announced at the beginning of the
auction. A written notice of this information must also be
conspicuously displayed or distributed to the public at the auction
site.
§19-2C-5a. Examinations of applicants; excuse for illness; fee
renewal.
Examinations shall be held in April and October of each year
at a time and place to be designated by the commissioner or his or
her authorized representative.
Any individual auctioneer applicant may take the examination
for auctioneer or apprentice auctioneer at the regularly scheduled
time and place. The apprentice auctioneer's examination shall consist of a written examination. The auctioneer's examination
will consist of both a written and oral examination. The passing
grade for any written examination shall be seventy seventy-five
percent out of one hundred percent. The oral portion will be
scored by the commissioner or his or her authorized representative.
If the applicant fails either the written or oral portion of the
examination, no license will be issued and he or she shall not be
administered the examination again until the next regularly
scheduled examination date. Each applicant applying for an
auctioneer license or apprentice auctioneer license must pay an
application fee of fifty dollars. A person who is qualified for a
auctioneer's license as provided for in this article is considered
to be a professional in his or her trade.
One notice only of the examination shall be mailed to the
applicant at the address given on the application. If the
applicant fails to appear for such examination, except as provided
herein, a new application and a new fee shall be required. No fee
shall be returned except when the applicant fails to take the
examination because of illness evidenced by a doctor's certificate
sent to the commissioner. If excused because of illness the
applicant shall be admitted to the next regularly scheduled
examination without paying an additional fee. No applicant shall
be excused from taking the scheduled examination for any reason
other than illness unless in the judgment of the commissioner the
applicant would suffer undue hardship by not being excused.
An examination fee of fifty dollars, in addition to any other fees required by this article, shall be collected from each person
taking such examination. If the applicant has previously paid the
examination fee and successfully completed the apprentice
auctioneer's examination, no additional examination fee will be
required to take the auctioneer's examination as provided for in
this article.
If the commissioner determines that an applicant does not
qualify for a license, he or she shall so notify the applicant by
certified United States mail. The notice shall state the reason
for refusal to grant a license and the applicant's right to appeal
the commissioner's decision within twenty days of receipt of the
notice.
An examination shall not be required for the renewal of any
license unless such license has been revoked or suspended, in which
case the applicant may be required, by the commissioner, to take
and pass any written or oral examination required by the
department. In order to utilize this section, a license holder
must place a notarized affidavit on file each year stating the
license holder held no sales during that calendar year. In cases
where a license has been expired for more than two years and not
been revoked or suspended, the applicant is required to take and
pass any written and oral examinations required by the department.
The commissioner is hereby authorized to promulgate rules as he or
she considers necessary for the renewal of auctioneer licenses,
including, but not limited to, requirements for continuing
education of auctioneers.
§19-2C-5b. Change of address.
Written notice shall be given within ten days to the
department by each individual or auction house licensee of any
change of principal business location or of residence address. In
the event of a change of business location address the department
shall issue a new license for the unexpired license period.
A post office box is not acceptable as a physical address.
§19-2C-6. Apprentice licenses; fees.
The department of agriculture may grant apprentice
auctioneer's licenses to those persons considered qualified by the
commissioner. Every applicant for an apprentice auctioneer's
license must take and pass a written examination relating to the
skills and knowledge and statutes and regulations rules governing
auctioneers. Each applicant must provide a photo ID when taking
the examination. Every applicant shall furnish to the commissioner
on forms provided by the department satisfactory proof of the
following:
(a) That he or she has a good reputation;
(b) That he or she is a trustworthy character; and
(c) That he or she is a citizen of the United States; and
(d) That he or she is at least eighteen years of age.
Any apprentice auctioneer may take the examination to become
an auctioneer after serving a two-year apprenticeship under a
licensed auctioneer: Provided, That if the apprentice auctioneer
has attended a nationally accredited graduate school of auctioneering, approved by the commissioner, he or she shall serve
an apprenticeship of only six months. Before an apprentice
auctioneer may take the auctioneer's examination, the apprentice
auctioneer shall conduct at least six eight auction sales under the
direct supervision of the sponsoring auctioneer. The commissioner
may waive the requirements of this section, on an individual basis,
upon the presentation of written evidence that the applicant has
educational training or exceptional experience in the auctioneering
profession and that the applicant has been unable to obtain
sponsorship by a licensed auctioneer: Provided, however, That the
commissioner shall promulgate rules and regulations setting forth
educational and experience qualifications which would entitle an
individual to a waiver of the provisions of this section: Provided
further, That the commissioner shall not waive apprenticeship
requirements for any applicant without the concurrence of the board
of review.
When any apprentice auctioneer is discharged or terminates his
or her employment with an auctioneer for any reason, the auctioneer
shall immediately provide written notification to the commissioner.
No discharged or terminated apprentice auctioneer shall thereafter
perform any acts under the authority of his or her license until
such that apprentice auctioneer applies to the West Virginia
department of agriculture. receives a new license bearing the name
and address of his new employer No more than one license shall be
issued to any apprentice auctioneer for the same period of time.
The fee for the transfer of the license of an apprentice auctioneer to a new employer auctioneer is fifteen dollars.
The fee for the annual renewal of the apprentice auctioneer's
license is fifty dollars. Bond requirements for an apprentice
auctioneer shall be established by reasonable rules and regulations
promulgated by the commissioner and both the annual renewal fee and
the bond must be filed with the department of agriculture:
Provided, That the bond required by this section shall not be less
than five thousand dollars. The department shall not issue an
apprentice auctioneer's license until bond has been filed in
accordance with this article. All apprentice auctioneer licenses
expire on the thirty-first day of December of each year but are
renewable upon the payment of the annual fee.
§19-2C-6a. Investigation of complaints; board of review.
The department of agriculture may upon its own action and
shall, upon the verified written complaint of any person,
investigate the actions of any auctioneer, apprentice auctioneer,
auction house or auction house operator, any applicant for an
auctioneer's or apprentice auctioneer's license or any person who
assumes to act in that capacity, if the complaint, together with
other evidence presented in connection with it, establishes
probable cause.
Upon verification of the complaint, the department shall
present the complaint to the board of review. The board of review
shall consider all of the facts of the complaint and recommend a
course of action to the commissioner.
The board of review shall be appointed by the governor, by and with the advice and consent of the Senate, and shall consist of
three members, each appointed for a staggered three-year term. Two
members of the board of review shall be licensed auctioneers in
West Virginia and residents of this state and shall have been
licensed and been practicing the profession of auctioneering for
five years immediately preceding their appointment. The third
member shall be a lay person from the commercial or agricultural
community who has utilized services of auctioneers for at least
three years. No more than one board member shall be from any one
congressional district and no more than two members shall be from
the same political party. Board members shall receive no
compensation for their service on the board, but shall be entitled
to receive reimbursement for expenses in accordance with the
department of agriculture travel regulations.
During the establishment of the board one member shall be
appointed for a three-year term, one member for a two-year term and
one member for a one-year term. The first year of each term
expires on the first day of January, one thousand nine hundred
ninety-two, and subsequently on the first day of January of each
year. There shall be no limit on the number of consecutive terms
a member may serve on the board. The governor is authorized to
fill a vacancy when it occurs on the board for any reason. An
appointment to fill a vacancy shall be for the remainder of the
existing term of the vacant position.
§19-2C-6b. Duties and responsibilities of an apprentice auctioneer
and a sponsoring auctioneer.
An apprentice auctioneer shall only conduct or assist in
auctions under the direct supervision of his or her sponsoring
auctioneer. A licensed apprentice auctioneer may not enter into a
contract to conduct an auction unless the contract is cosigned by
his or her sponsoring auctioneer.
The sponsoring auctioneer is responsible for the actions of an
apprentice auctioneer. It is his or her responsibility to insure
adherence to this and all applicable sections of state law:
Provided, That if the apprentice auctioneer conducts auctions
without the consent of his or her sponsor, only the apprentice
auctioneer is subject to the penalties in section eight of this
article.
An auctioneer may not sponsor more than three apprentices at
one time. Any auctioneer who serves as a sponsor must have held an
active, valid license for three consecutive years preceding the
date on which that auctioneer is named as sponsor of the
apprentice.
§19-2C-6c. Reciprocity.
To qualify for a nonresident
based on a nonresident license, as the
case may be
When an applicant's resident state has no licensing law for
auctioneers or the applicant's resident state has no written or
oral examination associated with its licensing requirements, the
department of agriculture shall require proof that the applicant
has been a practicing auctioneer for a period of two years
preceding the date of application. The proof shall be in the form
of sale bills, contracts, sale permits and other such evidence
acceptable to the commissioner. Provided this qualification is met
and the applicant meets other requirements for licensing as
required by the statutes and regulations rules, the applicant shall
be admitted to the next scheduled written and oral examination for
auctioneers without being required to first serve an
apprenticeship.
§19-2C-6d. Continuing education.
An individual who applies for license renewal under article
two-c, chapter nineteen, must complete three actual hours of
continuing education from course providers that are approved by the
commissioner of agriculture or his or her designated
representative. The three hours must be completed each year by the
thirty-first day of December of the expiring year for the next
year's license renewal.
The continuing education requirement is as follows:
At least three actual hours of courses in any of the following core subjects:
(a) West Virginia rules and statutes governing auctioneering;
(b) Federal statutes governing auctioneering;
(c) Auctioneering ethics;
(d) Escrow, trust and custodial accounts;
(e) Contracts;
(f) Business courses related to auctioneering;
(g) Auction management;
(h) Bid calling;
(i) Public speaking;
(j) Advertising;
(k) Specialty auction topics;
(l) Any other subject matter approved by the commissioner.
§19-2C-7. Orders of commissioner; hearing; review.
Any order of the commissioner shall be served by him or her
upon all persons affected thereby by registered mail. Within ten
days of the receipt of such order any party adversely affected
thereby may, in writing, request a hearing before the commissioner.
Such hearing and any judicial review thereof shall be conducted in
accordance with the applicable provisions of articles five and six,
chapter twenty-nine-a of this code as if the same were set forth
herein in extenso
§19-2C-8. Penalties for violation of article or rules.
(a) Criminal penalties. -- Any person, firm, association or corporation violating any of the provisions of this article, or of
the rules and regulations adopted pursuant to the provisions
thereof, shall be guilty of a misdemeanor and, upon conviction
thereof, shall be fined not less than fifty one hundred dollars nor
more than two hundred fifty dollars for the first offense and not
less than four five hundred dollars nor more than one thousand
dollars for the second and subsequent offenses. Magistrates have
concurrent jurisdiction with circuit courts to enforce the
provisions of this article.
(b) Civil penalties. -- (1) Any person violating a provision
of this article or any rule or regulation adopted hereunder may be
assessed a civil penalty by the commissioner. In determining the
amount of any civil penalty, the commissioner shall give due
consideration to the history of previous violations of the person,
the seriousness of the violation and the demonstrated good faith of
the person charged in attempting to achieve compliance with this
article before and after written notification of the violation; (2)
the commissioner may assess a penalty of not more than two hundred
fifty dollars for each first offense and not more than one thousand
dollars for a second and subsequent offense; and (3) the civil
penalty is payable to the state of West Virginia and is collectible
in any manner now or hereafter provided for collection of a debt.
If any person liable to pay the civil penalty neglects or refuses
to pay the same, the amount of the civil penalty, together with
interest at ten percent, is a lien in favor of the state of West
Virginia upon the property, both real and personal, of such a person after the same has been entered and docketed to record in
the county where such property is situated. The clerk of the
county, upon receipt of the certified copy of such, shall enter
same to record without requiring the payment of costs as a
condition precedent to recording.
(c) Notwithstanding any other provision of law to the
contrary, the commissioner may promulgate and adopt rules which
permit consent agreements or negotiated settlements for the civil
penalties assessed as a result of violation of the provisions of
this article.
(d) No state court may allow for the recovery of damages for
any administrative action taken if the court finds that there was
probable cause for such action.
§19-2C-8a. Revocation.
In addition to the penalties in section eight of this article,
the commissioner may, by order, suspend, deny or revoke any license
granted hereunder for any violation of this article or the rules
and regulations promulgated hereunder or for any of the following
reasons:
(a) Obtaining a license through false or fraudulent
representation;
(b) Making any substantial misrepresentation in any
application for an auctioneer's or apprentice auctioneer's license;
(c) Engaging in a continued or flagrant course of
misrepresentation or for making false promises through an agent,
advertisement or otherwise;
(d) Failing to account for or remit within a reasonable time
within fourteen days of settlement any money belonging to others
that comes into his or her possession as a result of a sale or
auction;
(e) Being convicted in any court of competent jurisdiction of
this state or any other state of a criminal offense involving moral
turpitude or a felony; or for failing to notify the department of
any such conviction within fifteen days of conviction;
(f) Engaging in any conduct of an auctioneer which
demonstrates dishonesty or incompetency;
(g) Engaging in any other conduct that constitutes fraudulent
or dishonest dealing; and
(h) Acting as an attorney for a client; and
(i) Failing to establish an escrow or custodial account to
hold funds that are not paid to the consignor or client at the
close of the auction on the date of sale.
Any auctioneer or apprentice auctioneer who has had his or her
license suspended or revoked shall not be issued another such
license until a period not to exceed two years has elapsed from the
date of revocation. The commissioner may also require the
successful completion of the examinations required for an
auctioneer's license or an apprentice auctioneer's license.
§19-2C-9. Written contracts; exception.
No person shall act as auctioneer may conduct any on the sale
at public auction of any goods, wares, merchandise or of any other
property, real or personal, until he or she has entered into a written contract in duplicate with the owner or consignor of the
property to be sold, containing the terms and conditions upon which
the licensee receives or accepts the property for sale at auction.
No apprentice auctioneer shall be authorized to enter into a
contract without the written consent of his or her sponsoring
auctioneer. All contracts shall be in the name of and on behalf of
the sponsoring auctioneer.
The commissioner may require by rule the following:
(a) That written contracts between the auctioneer and the
seller be made in duplicate;
(b) That the original contract is to be retained by the
auctioneer for a period of six months;
(c) That one copy of the contract is to be furnished to each
person that who entered into the contract;
(d) That an apprentice auctioneer may not contract directly
with a client but only through his or her sponsoring auctioneer;
and
(e) That an apprentice auctioneer may not engage in a sale
with an auctioneer by whom he or she is not sponsored without first
obtaining the written consent of his or her sponsoring auctioneer;
and
(f) (e) That on all contracts between an auctioneer and a
seller there shall be a prominent statement indicating that the
auctioneer is licensed by the department of agriculture and bonded
in favor of the state of West Virginia.
§19-2C-9a. Sale proceeds, accounting and escrow accounts.
(a) Funds received by any auctioneer or auction firm as a
result of a sale or auction in which any portion belongs to
consignors or others, and which are not disbursed to the seller or
consignor on auction day, must be deposited in a separate
escrow-type account for the benefit of the owner or seller of the
property within three business days after receipt of the same. The
licensee shall deposit funds that are not disbursed on auction day
with an insured bank or savings and loan association in West
Virginia. A licensee who disburses funds on auction day shall
prepare a receipt or settlement statement for the disbursed funds
that contains the name and address of the person receiving the
disbursement, the amount of the disbursement and the reason for the
disbursement. The receipt or statement shall be signed by the
licensee and the person receiving the disbursement. Accounts and
records must at all times disclose the names of buyers and the
amount of purchase and payment from each, also the names of the
sellers and the amount due and payable to each from funds in the
escrow account for sellers' proceeds. All records and accounts
related to an individual seller shall be delivered to the seller
within fourteen days of settlement.
(b) The only exception to settlement being made within the
fourteen day time frame must be specifically written in the
contract between the auctioneer and the consignor.
(c) Each licensee shall maintain for no less than five years
the complete records showing the deposit, maintenance and
withdrawal of escrow funds and the disbursement of funds on auction day. The commissioner of agriculture or his or her designated
agent may inspect these records periodically without prior notice
and may inspect these records whenever the commissioner determines
that they are pertinent to an investigation of any specific
complaint against a licensee.