Section 1. For the purpose of this Act:

Section 2. The provisions of this Act shall not apply to the following transactions:

(1) a sale conducted by order of any United States court pursuant to Title 11 of the United States Code relating to bankruptcy;

(2) a sale conducted by an employee of the United States or the State of Texas or its political subdivision in the course and scope of his employment;

(3) a sale conducted by a charitable or nonprofit organization, if the auctioneer receives no compensation;

(4) a sale conducted by an individual of his own property if such individual is not engaged in the business of selling such property as an auctioneer on a recurring basis;

(5) a foreclosure sale of realty conducted personally by a trustee under a deed of trust;

(6) a foreclosure sale of personal property conducted personally by the mortgagee or other secured party or an employee or agent of such mortgagee or other secured party acting in the course and scope of his employment if the employee or agent is not engaged otherwise in the auction business, and if all property for sale in the auction is subject to a security agreement;

(7) a sale conducted by sealed bid;

(8) an auction conducted in a course of study, approved by the Commissioner, for auctioneers and conducted only for student training purposes;

(9) an auction conducted by a posted stockyard or market agency as defined by the Federal Packers and Stockyard Act, 1921, as amended (7 U.S.C. Section 181 et seq.);

(10) an auction of livestock conducted by a nonprofit livestock trade association chartered in this state, if the auction involves only the sale of the trade association's members' livestock; or

(11) an auction conducted by a charitable or nonprofit organization chartered in this state, if the auction involves only the property of the organization's members and the auction is part of a fair that is organized under state, county, or municipal authority.

Section 3.

(a) Except as exempted under this Act, no person may act as an auctioneer or associate auctioneer in an auction held within this state unless he holds a license issued by the commissioner under this Act.

(b) A person is eligible for an auctioneer's license if he:

(1) is at least 18 years of age;

(2) is a citizen of the United States or a legal alien;

(3) either (i) passes a written or oral examination demonstrating his knowledge of the auction business and of the laws of this state pertaining to the auction business; or (ii) shows proof of his employment by a licensed auctioneer for a period of one year during which the applicant participated in at least five auctions.

(c) A person is eligible for an associate auctioneer's license if he:

(1) is a citizen of the United States or a legal alien; and

(2) is employed under the direct supervision of a licensed auctioneer.

(d) Each person applying for a license must apply to the commissioner on a form provided by the commissioner that establishes the applicant's eligibility for the license. The application must be accompanied by the required bond, the required license fee, and either the limited sales tax permit number issued by the comptroller of public accounts or proof of exemption from the limited sales tax permit requirement.

(e) The commissioner shall prepare license examinations for an auctioneer's license and study and reference materials on which the examinations are based. The examination for auctioneers must be designed to establish the applicant's general knowledge of the auction business, the principles of conducting an auction, and the laws of this state pertaining to auctioneers. The license examination must be offered at least four times a year at locations designated by the commissioner.

(f) A person who establishes his eligibility for an auctioneer's license may apply to the commissioner for a license examination. The application must be accompanied by the examination fee. On receipt of an examination application with the required fee, the commissioner shall furnish the applicant with study materials and references on which the examination will be based and a schedule specifying the dates and places the examination will be offered. The applicant may take the examination at any scheduled offering within 90 days after receipt of the study materials. If an applicant fails the qualifying examination, he may reapply to take the license examination again. However, if the applicant fails the examination twice within a one-year period, he must wait one year to reapply.

(g) If an application for an auctioneer's license from a nonresident of this state is accompanied by a certified copy of an auctioneer's license issued to the applicant by the county, state, or political subdivision of his residence and by proof that the county, state, or political subdivision in which the applicant is licensed has competency standards at least equivalent to those of this state, and if the county, state, or political subdivision extends similar recognition and courtesies to this state, the commissioner shall accept the license as proof of the applicant's professional competence and shallwaive the examination and training requirements of Paragraph (3), Subsection (b) of this section. All other application requirements must be complied with by nonresidents, and in addition, a nonresident's application shall be accompanied by a written irrevocable consent to service of process. The consent must provide that actions growing out of any transaction subject to this Act may be commenced against the licensee in the proper court of any county of this state in which the cause of action may arise, or in which the plaintiff may reside, by a service of process upon the commissioner as the licensee's agent and stipulating and agreeing that such service of process shall be taken and held in all courts to be as valid and binding as if due service has been made upon the person according to the laws of this or any other state. The consent of service of process shall be in such form and supported by such additional information as the commissioner may by rule require.

(h) A license issued under this Act shall be issued for the period set by the commission.

(i) Repealed by Acts 1989, 71st Leg., ch. 1039, Section 5.01(15), eff. Sept. 1, 1989.

Section 3A.

(a) Not later than the 30th day after the date on which an examination is administered under this Act, the commissioner shall notify each examinee of the results of the examination. However, if an examination is graded or reviewed by a national testing service, the commissioner shall notify examinees of the results of the examination not later than the 14th day after the date on which the commissioner receives the results from the testing service. If the notice of examination results graded or reviewed by a national testing service will be delayed for longer than 90 days after the examination date, the commissioner shall notify the examinee of the reason for the delay before the 90th day.

(b) If requested in writing by a person who fails the examination, the commissioner shall furnish the person with an analysis of the person's performance on the examination.

Section 3B.

The commissioner may recognize, prepare, or administer continuing education programs for licensees. Participation in the programs is voluntary.

Section 4. Repealed by Acts 1989, 71st Leg., ch. 1039, Section 5.01(15), eff. Sept. 1, 1989.

Section 5. Repealed by Acts 1991, 72nd Leg., ch. 402, Section 3, eff. Sept. 1, 1991.

Section 5A.

(a) The auctioneer education and recovery fund is established as a special trust fund with the state treasurer administered by the department, without appropriation, for the payment of claims against auctioneers licensed under this Act.

(b) In addition to any other fees required under this Act, a person entitled to receive a license under this Act shall pay a fee of $100 before the commissioner issues the person a license.

(c) If, as of December 31 of any year, the balance remaining in the auctioneer education and recovery fund is less than $300,000, each licensee shall pay at the next license renewal, in addition to the renewal fee, the greater of $50, or a pro rata share of the amount necessary to bring the fund to $300,000.

(d) The fees received under this section shall be deposited in the education and recovery fund and held by the commissioner in trust for implementing the purpose of the fund. Those amounts may be invested and reinvested in the same manner as funds of the Employees Retirement System of Texas, and the income from the investments shall be deposited to the credit of the fund. However, an investment may not be made that would impair the liquidity required to satisfy payments awarded under this section.

(e) The department is the manager of the fund. The manager shall administer the fund, keep books and records as required by the commissioner, appear at hearings or judicial proceedings, and invest and reinvest the fund's assets in accordance with instructions from the commissioner. The manager of the fund shall be paid for reasonable and necessary costs and expenses for the management of the fund out of the earnings from the fund.

(f) The fund, or the department, is not liable to a consumer for recovery if the fund has insufficient assets to pay amounts awarded. If the fund contains insufficient assets to pay the consumer, the manager shall record the time and date of receipt of an order for payment to a consumer. As funds become available, the commissioner shall pay consumers with unpaid orders by time and date of the order.

(g) The commissioner may use all funds in excess of $250,000 to:

(1) implement the advancement of education and research in the auctioneering profession for the benefit of those licensed under this section and the improvement and increased efficiency of the industry;

(2) underwrite educational seminars, training centers, and other forms of educational projects for the use and benefit of licensees;

(3) sponsor, contract, and underwrite all other educational and research projects advancing the auctioneer profession in this state; and

(4) cooperate with associations of auctioneers and other groups for the education and advancement of the auctioneer profession in this state.

Section 5B.

(a) The Auctioneer Education Advisory Board is created to advise the commissioner on educational matters. The advisory board consists of:

(1) three licensed auctioneers appointed by the commissioner who individually reside in noncontiguous senatorial districts;

(2) the executive director of the Texas Department of Commerce, or the director's designee; and

(3) the commissioner of education, or the commissioner's designee.

(b) Appointments to the advisory board shall be made without regard to the race, color, handicap, sex, religion, age, or national origin of the appointees.

(c) A member of the advisory board is not liable in a civil action for an act performed in good faith in the execution of duties as a board member.

(d) The three auctioneer members of the advisory board may not receive compensation for serving on the board or reimbursement for expenses.

(e) Auctioneer members of the advisory board hold office for terms of two years. An auctioneer member's term expires September 1 of each year. The other members serve ex officio for the term of their public office.

(f) If an auctioneer vacancy occurs during a term, the commissioner shall appoint a replacement to fill the unexpired part of the term.

(g) The advisory board shall designate one of its members as presiding officer. The presiding officer serves for two years.

(h) An auctioneer member may be removed by a four-fifths vote of the advisory board.

(i) The advisory board shall meet at least once in each quarter of the calendar year and at the call of the presiding officer.

(j) The advisory board shall evaluate educational programs, seminars, and training projects and make recommendations to the commissioner on their usefulness and merit as continuing education tools. On the recommendation of the advisory board, the commissioner may fund or underwrite specific classes, seminars, or events for the education and advancement of the auctioneer profession in this state.

Section 5C.

(a) A person who deals with an auctioneer licensed under this Act and who is aggrieved by an action of the auctioneer as a result of a violation of a contract made with the auctioneer may initiate a claim against the fund by filing with the department:

(1) a sworn complaint against the auctioneer; and

(2) a filing fee of $50.

(b) After a claim is filed, the department shall investigate the complaint and determine the amount due the aggrieved party. If the amount determined by the department is disputed by the auctioneer or the aggrieved party, the department's hearings examiner shall conduct a hearing in accordance with departmental rules on the claim and determine the amount due the aggrieved party.

(c) The hearings examiner shall prepare a proposal for decision for the commissioner. A party may appeal a decision of the commissioner in the manner provided for contested cases under the Administrative Procedure and Texas Register Act (Article 6252-13a, Vernon's Texas Civil Statutes).

(d) A hearing on a claim may be conducted at the department's Austin office, or at another location as provided by department rule.

(e) If the amount determined by the department's investigation to be due the aggrieved party is not disputed by the auctioneer or the aggrieved party, the commissioner shall pay the claim within the limits of this Act.

(f) If a hearing is held on a disputed amount, the commissioner shall pay to the aggrieved party the amount of actual damages determined by the commissioner. The amount may not include attorneys' fees, speculative damages, or lost profits. The amount must be within the following limits:

(1) in making payments from the fund the commissioner may not pay a single aggrieved party more than $10,000;

(2) the total payment of all claims by more than one aggrieved party arising from one auction at one location, regardless of the length of the auction, may not exceed $20,000; and

(3) the total payment of claims against a single auctioneer may not exceed $20,000.

(g) The commissioner may not pay a claim against an auctioneer who was not licensed at the time of the transaction on which the claim is based.

(h) If the commissioner pays a claim against an auctioneer, the auctioneer shall:

(1) reimburse the fund immediately or agree in writing to reimburse the fund on a schedule to be determined by rule of the commissioner; and

(2) immediately pay the aggrieved party any amount due to that party or agree in writing to pay the aggrieved party on a schedule to be determined by rule of the commissioner.

(i) Payments made by the auctioneer to the fund or to the aggrieved party under this section shall include interest accruing at the rate of eight percent a year beginning on the date that the commissioner pays the claim.

(j) A license granted under this Act may be revoked by the commissioner on proof that the commissioner has made a payment from the recovery fund for actions of the licensee. The commissioner may probate an order revoking a license. An auctioneer is not eligible to receive a new license until the auctioneer has repaid in full, plus interest, the amount paid from the recovery fund on the auctioneer's account unless, after a hearing, the commissioner issues a new probated license.

(k) If the commissioner pays a claim against an auctioneer, the department is subrogated to all rights of the aggrieved party against the auctioneer to extent of the amount paid to the aggrieved party.

(l) This section does not limit the authority of the commissioner to take disciplinary action against a license for a violation of this section or the rules and regulations of the commissioner, nor shall the repayment in full of all obligation to the recovery fund by a licensee nullify or modify the effect of any other disciplinary proceeding brought under this Act.

(m) A person commits an offense if, with intent to obtain a benefit for himself or herself or to harm another, the person:

(1) institutes a claim under this Act in which the person knows the person has no interest; or

(2) institutes a frivolous suit under this Act or a claim under this Act that the person knows is false.

(n) An offense under Subsection (m) of this section is a Class B misdemeanor.

Section 6.

No municipality or other political subdivision of this state has authority, after the effective date of this amendment, to levy or collect any license tax or fee, as a regulatory or revenue measure, or to require the licensing in any manner of any auctioneer or associate auctioneer who is licensed and complies with all applicable provisions of this Act.

Section 7.

(a) The commissioner may deny, suspend, or revoke the license of any auctioneer for any of the following causes:

(1) for obtaining a license through false or fraudulent representation;

(2) for making any substantial misrepresentation in an application for an auctioneer's license;

(3) for a continued and flagrant course of misrepresentation or for making false promises through agents, advertising, or otherwise;

(4) for failing to account for or remit, within a reasonable time, any money belonging to others that comes into his possession and for commingling funds of others with his own or failing to keep such funds of others in an escrow or trustee account;

(5) for conviction in a court of competent jurisdiction of this state or any other state of a criminal offense involving moral turpitude or a felony;

(6) for violation of this Act or of any rule or regulation of the department; or

(7) for any violation of the Business & Commerce Code in the conduct of an auction.

(b) Before denying an application for a license or before suspending or revoking any license, the commissioner shall in all cases set the matter for a hearing and shall, at least 30 days before the date set for the hearing, notify in writing the applicant orlicensee of the charges made against him or of the question to be determined, including notice of when and where the hearing will be held.

(c) The applicant or licensee is entitled to an opportunity to be present and to be heard in person or by counsel and to an opportunity to offer evidence by oral testimony, by affidavit, or by deposition.

(d) Written notice may be served by delivery of the notice personally to the applicant or licensee or by mailing the notice by certified mail to the last known mailing address of the applicant or licensee. In the event the applicant or licensee is an associate auctioneer, the commissioner shall also notify the auctioneer employing him or in whose employ he is about to enter by mailing the notice by certified mail to the auctioneer's last known mailing address.

(e) The hearing must be conducted in a manner that will give to the applicant or licensee due process of law and that is consistent with the provisions of the Administrative Procedure and Texas Register Act (Article 6252-13a, Vernon's Texas Civil Statutes).

(f) If, after a hearing, the commissioner determines that a license should be denied, revoked, or suspended, the applicant or licensee has 30 days in which to appeal the commissioner's decision to the district court of Travis County or of the county in which the violation is alleged to have occurred.

Section 8.

The commissioner may, upon his own motion, and shall, on the written and verified complaint of any person aggrieved by the actions of an auctioneer in the conduct of an auction, investigate alleged violations of this Act by any licensed or unlicensed auctioneer or any applicant.

Section 9.

The commissioner may make reasonable rules and regulations relating to the form and manner of filing applications for licenses, the issuance, denial, suspension, and revocation of licenses, and the conduct of hearings consistent with the provisions of the Administrative Procedures Act. The commissioner or other person authorized by him may administer oaths and hear testimony in matters relating to the duties imposed on the commissioner.

Section 10.

Any auctioneer who advertises to hold or conduct an auction within this state shall indicate in such advertisement his name and license number.

Section 10A.

A person who holds a license issued under this Act may not act as an auctioneer for an auction company unless the company is owned or operated by a person who is licensed under this Act.

Section 11.

(a) Whoever acts as an auctioneer as defined in this Act without first obtaining a license commits a Class B misdemeanor.

(b) Whoever violates any other provisions of this Act or any rule or regulation promulgated by the commissioner in the administration of this Act, for the violation of which no other penalty is provided, commits a Class C misdemeanor.

Historical and Statutory Notes

Section 12 of the 1975 Act repealed V.A.T.S. Tax.-Gen. art. 1901, Section 1

Section 4 of the 1991 amendatory act provides: "This act takes effect September 1, 1991, and applies only to a claim accruing on or after that date. A claim accruing before that date is governed by the law in effect at the time the cause of action accrued, and that law is continued in effect for that purpose."