By Kuempel H.B. No. 667
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the regulation of auctions and auctioneers.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Subsection 1(10), Chapter 320, Acts of the 64th
1-5 Legislature, Regular Session 1975, as amended (Article 8700,
1-6 Vernon's Texas Civil Statutes), is amended to read as follows:
1-7 (10) "Auction business <company>" means a person,
1-8 partnership, corporation, association, or other legal entity that
1-9 engages in the regular course of business in <of> arranging,
1-10 managing, sponsoring, advertising, or conducting auctions, or
1-11 regularly using or allowing the use of its facilities for auctions.
1-12 SECTION 2. Section 2, Chapter 320, Acts of the 64th
1-13 Legislature, Regular Session 1975, as amended (Article 8700,
1-14 Vernon's Texas Civil Statutes), is amended to read as follows:
1-15 Sec. 2. EXEMPT TRANSACTIONS. The provisions of this Act
1-16 shall not apply to the following transactions:
1-17 (a) <(1)> a sale conducted by order of any United States
1-18 court pursuant to Title 11 of the United States Code relating to
1-19 bankruptcy;
1-20 (b) <(2)> a sale conducted by an employee of the United
1-21 States or the State of Texas or its political subdivisions in the
1-22 course and scope of his employment;
1-23 (c) <(3)> a sale conducted by a charitable or nonprofit
2-1 organization, if the auctioneer receives no compensation;
2-2 <(4) a sale conducted by an individual of his own
2-3 property if such individual is not engaged in the business of
2-4 selling such property as an auctioneer on a recurring basis;>
2-5 (d) <(5)> a foreclosure sale of realty conducted personally
2-6 by a trustee under a deed of trust;
2-7 (e) <(6)> a foreclosure sale of personal property conducted
2-8 personally by the mortgagee or other secured party or an employee
2-9 <or agent> of such mortgagee or other secured party acting in the
2-10 course and scope of his employment if the employee <or agent> is
2-11 not engaged otherwise in the auction business and if all property
2-12 for sale in the auction is subject to a security agreement;
2-13 (f) <(7)> a sale conducted by sealed bid;
2-14 (g) <(8)> an auction conducted by a licensed auctioneer in a
2-15 course of study, approved by the commissioner, for auctioneers and
2-16 conducted <only> for student training purposes;
2-17 (h) <(9)> an auction conducted by a posted stockyard or
2-18 market agency as defined by the Federal Packers and Stockyard Act,
2-19 1921, as amended (7 U.S.C. Section 181 et seq.); or
2-20 (i) <(10)> an auction of livestock conducted by a nonprofit
2-21 livestock trade association chartered in this state, if the auction
2-22 involves only the sale of the trade association's members'
2-23 livestock<; or>
2-24 <(11) an auction conducted by a charitable or
2-25 nonprofit organization chartered in this state, if the auction
3-1 involves only the property of the organization's members and the
3-2 auction is part of a fair that is organized under state, county, or
3-3 municipal authority>.
3-4 SECTION 3. Section 3, Chapter 320, Acts of the 64th
3-5 Legislature, Regular Session 1975, as amended (Article 8700,
3-6 Vernon's Texas Civil Statutes), is amended to read as follows:
3-7 Sec. 3. LICENSE REQUIREMENTS. (a)(1) Except as expressly
3-8 exempted under this Act, no person may act as an auctioneer or
3-9 associate auctioneer in an auction held within this state unless
3-10 the person <he> holds a license issued by the commissioner under
3-11 this Act.
3-12 (2) Except as expressly exempted under this Act, no
3-13 auction business may be owned, managed, or operated in this state
3-14 unless the owner, manager, or operator holds an auctioneer's
3-15 license issued by the commissioner. Such auctioneer's license or
3-16 true copy thereof must be conspicuously displayed during the
3-17 conduct of any auction on the premises of the auction business or
3-18 auction site.
3-19 (b) A person is eligible for an auctioneer's license if the
3-20 person <he>:
3-21 (1) is at least 18 years of age;
3-22 (2) is a citizen of the United States or a legal
3-23 alien;
3-24 (3) is a high school graduate or has passed the GED
3-25 equivalent;
4-1 (4) has not been convicted of a felony involving moral
4-2 turpitude within the preceding five years;
4-3 (5) shall have completed eighty (80) hours of
4-4 classroom instruction at an auction school whose curriculum has
4-5 been approved by the department; and
4-6 (6) <either (i)> passes a written or oral examination
4-7 demonstrating the person's <his> knowledge of the auction business
4-8 and of the laws of this state pertaining to the auction business<;
4-9 or (ii) shows proof of his employment by a licensed auctioneer for
4-10 a period of one year during which the applicant participated in at
4-11 least five auctions>.
4-12 (c) A person is eligible for an associate auctioneer's
4-13 license if the person <he>:
4-14 (1) is a citizen of the United States or a legal
4-15 alien; and
4-16 (2) is employed under the direct supervision of a
4-17 licensed auctioneer, and
4-18 (3) is under the age of eighteen years at the time the
4-19 license is issued or renewed.
4-20 (d) Each person applying for a license must apply to the
4-21 commissioner on a form provided by the commissioner that
4-22 establishes the applicant's eligibility for the license. The
4-23 application must be accompanied by all required fees <the required
4-24 bond, the required license fee>, and either the limited sales tax
4-25 permit number issued by the comptroller of public accounts or proof
5-1 of exemption from the limited sales tax permit requirement.
5-2 (e) The commissioner shall prepare license examinations for
5-3 an auctioneer's license and study and reference materials on which
5-4 the examinations are based. The examination for auctioneers must
5-5 be designed to establish the applicant's general knowledge of the
5-6 auction business, the principles of conducting an auction, and the
5-7 laws of this state pertaining to auctioneers. The license
5-8 examination must be offered at least four times a year at locations
5-9 designated by the commissioner.
5-10 (f) A person who establishes his eligibility for an
5-11 auctioneer's license may apply to the commissioner for a license
5-12 examination. The application must be accompanied by the
5-13 examination fee as set by the commissioner. On receipt of an
5-14 examination application with the required fee, the commissioner
5-15 shall furnish the applicant with study materials and references on
5-16 which the examination will be based and a schedule specifying the
5-17 dates and places the examination will be offered. The applicant may
5-18 take the examination at any scheduled offering within 90 days after
5-19 receipt of the study materials. If an applicant fails the
5-20 qualifying examination, he or she may reapply to take the license
5-21 examination again. However, if the applicant fails the examination
5-22 twice within a one-year period, he or she must wait one year to
5-23 reapply.
5-24 (g) If an application for an auctioneer's license from a
5-25 nonresident of this state is accompanied by a certified copy of an
6-1 auctioneer's license issued to the applicant by the county, state,
6-2 or political subdivision of his residence and by proof that the
6-3 county, state, or political subdivision in which the applicant is
6-4 licensed has competency standards at least equivalent to those of
6-5 this state, and if the county, state, or political subdivision
6-6 extends similar recognition and courtesies to this state, the
6-7 commissioner shall accept the license as proof of the applicant's
6-8 professional competence and shall waive the examination and
6-9 training requirements of Paragraph (3), Subsection (b) of this
6-10 section. All other application requirements must be complied with
6-11 by nonresidents, and in addition, a nonresident's application shall
6-12 be accompanied by a written irrevocable consent to service of
6-13 process. The consent must provide that actions growing out of any
6-14 transaction subject to this Act may be commenced against the
6-15 licensee in the proper court of any county of this state in which
6-16 the cause of action may arise, or in which the plaintiff may
6-17 reside, by a service of process upon the commissioner as the
6-18 licensee's agent and stipulating and agreeing that such service of
6-19 process shall be taken and held in all courts to be as valid and
6-20 binding as if due service has been made upon the person according
6-21 to the laws of this or any other state. The consent of service of
6-22 process shall be in such form and supported by such additional
6-23 information as the commissioner may by rule require.
6-24 (h) A license issued under this Act shall be issued for a
6-25 <the> period of one year <set by the commission>.
7-1 (j) A license issued to an auctioneer or an associate
7-2 auctioneer is not transferrable.
7-3 (k) Any change in the information furnished on the license
7-4 or renewal application shall be reported to the department within
7-5 thirty days of the change by the licensee. Failure to furnish such
7-6 information may result in the imposition of sanctions authorized by
7-7 this Act.
7-8 (l) A licensee may apply for renewal of the license by
7-9 submitting a renewal application on a form provided by the
7-10 commissioner, by providing all information as may be required by
7-11 the commissioner, and by paying the required fees.
7-12 (m) The fees required for licenses are:
7-13 (1) $100 for an auctioneer's license and any renewal
7-14 thereof;
7-15 (2) $50 for an associate auctioneer's license and any
7-16 renewal thereof;
7-17 (3) $100 paid into the public protection and recovery
7-18 fund paid by each applicant for a license or any renewal thereof.
7-19 SECTION 4. Section 3B, Chapter 320, Acts of the 64th
7-20 Legislature, Regular Session 1975, as amended (Article 8700,
7-21 Vernon's Texas Civil Statutes), is amended to read as follows:
7-22 Sec. 3B. Continuing education requirements <programs>.
7-23 (a) Applicants for renewal of an auctioneer's or associate
7-24 auctioneers' license shall have completed seven and one-half hours
7-25 of continuing education since the date of issuance of the license
8-1 sought to be renewed.
8-2 (b) Continuing education courses curriculum must be approved
8-3 by the commissioner. Any non-profit corporation or foundation
8-4 approved by the commissioner or institution of higher education may
8-5 conduct continuing education courses covering the approved
8-6 curriculum and issue certificates of completion to licensees for
8-7 the course hours actually attended and completed <The commissioner
8-8 may recognize, prepare, or administer continuing education programs
8-9 for licensees. Participation in the programs is voluntary>.
8-10 SECTION 5. Chapter 320, Acts of the 64th Legislature,
8-11 Regular Session 1975, as amended (Article 8700, Vernon's Texas
8-12 Civil Statutes), is amended by adding a new Section 3C to read as
8-13 follows:
8-14 Sec. 3C. ADVISORY BOARD. (a) An Auctioneer Advisory Board
8-15 is created to advise the commissioner on educational matters, on
8-16 the curriculum for approved auction schools and for approved
8-17 continuing education courses and on rules and regulations for the
8-18 implementation of this Act. The Board shall consist of six members
8-19 to be appointed by the commissioner.
8-20 (b) The advisory board shall consist of four licensed
8-21 auctioneers and two consumers appointed for a term of four years.
8-22 Any vacancy during the four year term shall be filled by
8-23 appointment of the commissioner. No person who has served a full
8-24 four year term shall be reappointed to a successive four year term.
8-25 (c) Appointments to the advisory board shall be made without
9-1 regard to the race, color, handicap, sex, religion, age, or
9-2 national origin of the appointees. A member of the advisory board
9-3 is not liable in a civil action for an act performed in good faith
9-4 in the execution of duties as a board member.
9-5 SECTION 6. Chapter 320, Acts of the 64th Legislature,
9-6 Regular Session 1975, as amended (Article 8700, Vernon's Texas
9-7 Civil Statutes), is amended by adding a new Section 4A to read as
9-8 follows:
9-9 Sec. 4A. PUBLIC PROTECTION AND RECOVERY FUND. (a) The
9-10 auctioneer public protection recovery fund is established as a
9-11 special trust fund with the state treasurer as trustee, to be
9-12 administered by the commissioner, without appropriation, for the
9-13 protection of the public and for the payment of claims as
9-14 authorized by the provisions of this section. All fees paid by
9-15 licensees to the public protection and recovery fund shall be
9-16 invested and reinvested in the same manner as funds of the
9-17 Employees Retirement System of Texas, and the income from the
9-18 investments shall be deposited to the credit of the fund; however,
9-19 no investment shall be made that would impair the liquidity
9-20 required for public protection programs and claims payments. The
9-21 fees collected and the income from investments deposited into the
9-22 fund are not assets of the state nor are collected for the general
9-23 operation of state government, and the funds shall be expended
9-24 pursuant to the provisions of this section for the benefit and
9-25 protection of persons who consign, sell, or purchase goods at
10-1 auctions or who may be damaged by the acts or omissions of
10-2 auctioneers in the conduct of an auction.
10-3 (b) The department at the direction of the commissioner
10-4 shall develop public protection programs which may include the
10-5 distribution of educational materials to the public at auctions for
10-6 information as to the law and regulations, the monitoring of
10-7 auctions and auctioneer education programs to assure compliance by
10-8 auctioneers and auction businesses, and the conduct of an informal
10-9 dispute resolution process for the settlement of claims.
10-10 (c)(1) As a part of the public protection and recovery fund,
10-11 the commissioner shall reserve out of the fees paid into the fund
10-12 an amount not to exceed $250,000, for the payment of valid claims
10-13 pursuant to the provisions of this subsection (c). Any amount in
10-14 excess of $250,000 shall be spent for the public protection
10-15 programs pursuant to the provisions of subsection (b) of this
10-16 section.
10-17 (2) Any aggrieved person who obtains a final judgment
10-18 in any court against any licensee to recover damages for any acts
10-19 or omissions of the licensee in the conduct of an auction, upon
10-20 termination of all proceedings, including appeals and proceedings
10-21 supplemental to judgment for collection purposes, may file a
10-22 verified application in the court in which the judgment was entered
10-23 for an order directing payment out of the public protection and
10-24 recovery fund subject to the limitations set forth in this section.
10-25 (3) Prior to the commencement of any litigation, the
11-1 aggrieved person must file notice of the claim with the
11-2 commissioner; this notice must be received by the commissioner
11-3 within one year from the time of the act or omission giving rise to
11-4 the claim or within one year from the time the act or omission is
11-5 discovered or should reasonably have been discovered. Failure to
11-6 file the notice timely precludes any recovery from the fund.
11-7 (4) After the notice is received by the commissioner,
11-8 the department shall investigate the claim and shall conduct an
11-9 informal dispute resolution process to attempt to settle the claim,
11-10 if valid, on a reasonable basis. The results of the department's
11-11 investigation and of the informal dispute resolution process shall
11-12 be admissible in litigation against the licensee.
11-13 (5) A court shall not enter any order for payment of a
11-14 claim out of the fund except for the actual cash loss of the
11-15 aggrieved person in an amount not to exceed $10,000 per aggrieved
11-16 person. Actual cash loss shall not include attorney's fees,
11-17 speculative or punitive damages, court costs, or consequential
11-18 damages.
11-19 (6) The commissioner shall not pay, and the fund shall
11-20 not be liable for, total payment of all claims by more than one
11-21 aggrieved person arising from one auction at one location any
11-22 amount in excess of $20,000. The total payment of claims against a
11-23 single auctioneer shall not exceed $20,000.
11-24 (7) If the commissioner pays a claim against an
11-25 auctioneer, the auctioneer shall:
12-1 (A) reimburse the fund immediately or agree in
12-2 writing to reimburse the fund on a schedule to be determined by
12-3 rule of the commissioner; and
12-4 (B) immediately pay the aggrieved party any
12-5 amount due to that party or agree in writing to pay the aggrieved
12-6 party on a schedule to be determined by rule of the commissioner.
12-7 (8) Payments made by the auctioneer to the fund or to
12-8 the aggrieved party under this section shall include interest
12-9 accruing at the rate of eight percent a year beginning on the date
12-10 that the commissioner pays the claim.
12-11 (9) A license granted under this Act may be revoked by
12-12 the commissioner on proof that the commissioner has made a payment
12-13 from the recovery fund for actions of the licensee. The
12-14 commissioner may probate an order revoking a license. An
12-15 auctioneer is not eligible to receive a new license until the
12-16 auctioneer has repaid in full, plus interest, the amount paid from
12-17 the recovery fund on the auctioneer's account unless, after a
12-18 hearing, the commissioner issues a new probated license.
12-19 (10) If the commissioner pays a claim against an
12-20 auctioneer, the department is subrogated to all rights of the
12-21 aggrieved party against the auctioneer to the extent of the amount
12-22 paid to the aggrieved party.
12-23 (11) This section does not limit the authority of the
12-24 commissioner to take disciplinary action against a licensee for a
12-25 violation of this section or the rules and regulations of the
13-1 commissioner, nor shall the repayment in full of all obligation to
13-2 the recovery fund by a licensee nullify or modify the effect of any
13-3 other disciplinary proceeding brought under this Act.
13-4 SECTION 7. Section 5A, Section 5B, and Section 5C, Chapter
13-5 320, Acts of the 64th Legislature, Regular Session 1975, as amended
13-6 (Article 8700, Vernon's Texas Civil Statutes), are hereby repealed.
13-7 SECTION 8. Sections 7(a) and (f), Chapter 320, Acts of the
13-8 64th Legislature, Regular Session 1975, as amended (Article 8700,
13-9 Vernon's Texas Civil Statutes), are amended to read as follows:
13-10 (a) The commissioner may deny, suspend, or revoke the
13-11 license of any auctioneer for any of the following causes:
13-12 (1) for obtaining a license through false or
13-13 fraudulent representation;
13-14 (2) for making any substantial misrepresentation in an
13-15 application for an auctioneer's license;
13-16 (3) for a continued and flagrant course of
13-17 misrepresentation or for making false promises through agents,
13-18 advertising, or otherwise;
13-19 (4) for failing to account for or remit, within a
13-20 reasonable time as determined by rules adopted by the commissioner,
13-21 any money belonging to others that comes into his possession and
13-22 for commingling funds of others with his own or failing to keep
13-23 such funds of others in an escrow or trustee account;
13-24 (5) for conviction in a court of competent
13-25 jurisdiction of this state or any other state of a criminal offense
14-1 involving moral turpitude or a felony;
14-2 (6) for violation of this Act or any rule or
14-3 regulation of the department; or
14-4 (7) for any violation of the Business & Commerce Code
14-5 in the conduct of an auction.
14-6 (f) If, after a hearing, the commissioner determines that a
14-7 license should be denied, revoked, or suspended, the applicant or
14-8 licensee may <has 30 days in which to> appeal the commissioner's
14-9 decision as provided by the Administrative Procedure and Texas
14-10 Register Act (Article 6252-13a, Vernon's Texas Civil Statutes) and
14-11 its subsequent amendments <to the district court of Travis County
14-12 or of the county in which the violation is alleged to have
14-13 occurred>.
14-14 SECTION 9. Section 11, Chapter 320, Acts of the 64th
14-15 Legislature, Regular Session 1975, as amended (Article 8700,
14-16 Vernon's Texas Civil Statutes), is amended to read as follows:
14-17 Sec. 11. Penalties. (a) Whoever acts as an auctioneer as
14-18 defined in this Act without first obtaining a license commits a
14-19 Class A <B> misdemeanor.
14-20 (b) Whoever violates any other provisions of this Act or any
14-21 rule or regulation promulgated by the commissioner in the
14-22 administration of this Act, for the violation of which no other
14-23 penalty is provided, commits a Class B <C> misdemeanor.
14-24 SECTION 10. This Act is effective September 1, 1995.
14-25 SECTION 11. All consumer claims filed with the department on
15-1 or before August 31, 1995, shall be governed by the law in effect
15-2 at the time the claim was filed, and that law is continued in
15-3 effect for that purpose.
15-4 SECTION 12. Any person licensed as an associate auctioneer
15-5 on August 31, 1995, may obtain an auctioneer's license until
15-6 September 1, 1996, by meeting the requirements of the law in effect
15-7 on the date the associate auctioneer's license was issued or last
15-8 renewed.
15-9 SECTION 13. The continuing education requirements of Section
15-10 3B of this Act apply to all license renewals on and after September
15-11 1, 1996. No license shall be renewed on and after September 1,
15-12 1996, unless the licensee has completed the continuing education
15-13 requirements.
15-14 SECTION 14. The importance of this legislation and the
15-15 crowded condition of the calendars in both houses create an
15-16 emergency and an imperative public necessity that the
15-17 constitutional rule requiring bills to be read on three several
15-18 days in each house be suspended, and this rule is hereby suspended,
15-19 and that this Act take effect and be in force from and after its
15-20 passage, and it is so enacted.