85B Law Changes Take Effect Today!

New Laws are set to take effect once the Governor signs them.  These new laws, while do not impact the NC auction industry per se, impact how auctioneers do business overall.  The changes are below:

SECTION 1.(d)  G.S. 85B‑7.1(a) reads as rewritten:

"(a)      Each licensee who does not disburse all funds to the seller on auction day shall maintain a trust or escrow account and shall deposit in the account all funds that are received for the benefit of another person and are not disbursed to the seller on auction day. The licensee shall deposit funds that are not disbursed on auction day with a federally insured depository institution or a trust institution authorized to do business in this State.   At or before the time of all final settlements, the auctioneer shall provide the seller or consignor with a settlement statement, which includes a description of all goods sold, the selling price of the goods sold, the net proceeds due to the seller or consignor, the name and address of the person receiving the disbursement, and the amount of the disbursement. All settlement statements shall be signed by the licensee or the licensee's agent and by the person receiving the disbursement."

SECTION 1.(e)  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:

(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 a federally insured depository institution or a trust institution authorized to do business in this State  funds received for another person through sale at auction.

This means that ALL federally insured depository institutions (any banks that are FDIC insured) may now be used to deposit funds, where as previously it was an insured bank or savings and loan association located in North Carolina.  This allows auctioneers to have more diversity when it comes to deposits of auction deposits.