S-2327               _______________________________________________

                                         SUBSTITUTE SENATE BILL NO. 5561

                        _______________________________________________

State of Washington                              50th Legislature                              1987 Regular Session

By Senate Committee on Commerce & Labor (originally sponsored by Senators Warnke, Barr, Smitherman, Lee, Wojahn and Newhouse)

Read first time 3/6/87.

AN ACT Relating to bonding and trust account requirements for auctioneers; and amending RCW 18.11.121.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

        Sec. 1.  Section 8, chapter 324, Laws of 1986 and RCW 18.11.121 are each amended to read as follows:

          (1) Each auctioneer and each auction company shall as a condition to the granting and retention of a license have on file with the department an approved surety bond or other security in lieu of a bond.  The bond or other security of an auctioneer shall be in the amount of five thousand dollars.  If an auction company is a sole proprietorship or a partnership, and the sole proprietor or each individual partner has on file with the department an approved surety bond or other security in lieu of a bond, then a separate bond or other security shall not be required as an auction company.

          (2) The bond or other security of an auction company shall be in an amount not less than five thousand dollars and not more than twenty-five thousand dollars.  The amount shall be based on the value of the goods and real estate sold at auctions conducted, supervised, arranged, sponsored, or managed by the auction company during the previous calendar year or, for a new auction company, the estimated value of the goods and real estate to be sold at auction during the current calendar year.  The director shall establish by rule the procedures to be used for determining the amount of auction company bonds or other security.

          (3) In lieu of a surety bond, an auctioneer or auction company may deposit with the department any of the following:

          (a) Savings accounts assigned to the director;

          (b) Certificates of deposit payable to the director;

          (c) Investment certificates or share accounts assigned to the director; or

          (d) Any other security acceptable to the director.

          All obligations and remedies relating to surety bonds authorized by this section shall apply to deposits filed with the director.

          (4) Each bond shall comply with all of the following:

          (a) Be executed by the person seeking the license as principal and by a corporate surety licensed to do business in the state;

          (b) Be payable to the state;

          (c) Be conditioned on compliance with all provisions of this chapter and the agency rules adopted pursuant to this chapter, including payment of any administrative fines assessed against the licensee; and

          (d) Remain in effect for one year after expiration, revocation, or suspension of the license.

          (5) If any licensee fails or is alleged to have failed to comply with the provisions of this chapter or the agency rules adopted pursuant to this chapter, the director may hold a hearing in accordance with chapter 34.04 RCW, determine those persons who are proven claimants under the bond, and, if appropriate, distribute the bond proceeds to the proven claimants.  The state or an injured person may also bring an action against the bond in superior court.  The liability of the surety shall be only for actual damages and shall not exceed the amount of the bond.

          (6) Damages that exceed the amount of the bond may be remedied by actions against the auctioneer or the auction company under RCW 18.11.260 or other available remedies at law.