(a) Public automobile auctions shall be licensed and regulated by the Tennessee auctioneer commission and the Tennessee motor vehicle commission when engaged in the sale of motor vehicles.

(b) The following are minimum requirements for licensed public automobile auctions:

(1) The public automobile auction shall have a letter of compliance with local ordinances from the local zoning authority;

(2) The public automobile auction shall have garagekeeper's legal liability insurance in an amount not less than five hundred thousand dollars ($500,000);

(3) The public automobile auction shall have a surety bond of fifty thousand dollars ($50,000) issued by a licensed bonding company;

(4) The public automobile auction shall have a compiled financial statement prepared in accordance with generally accepted accounting principles by a certified public accountant or public accountant dated not earlier than twelve (12) months prior to the date of the application and shall furnish a copy of the financial statement to the commission along with any changes to the statement;

(5) The public automobile auction shall have a minimum net worth of at least one hundred thousand dollars ($100,000);

(6) The public automobile auction shall have a business telephone in the auction company name. For purposes of this subdivision (b)(6), cellular telephones are not acceptable;

(7) All signs shall be visible, and a permanent professional business sign shall be installed and have letters that are at least eight inches (8″) tall;

(8) The public automobile auction shall hold a current business tax license as required by local applicable law;

(9) The public automobile auctioneer shall obtain and have displayed on its premises a valid motor vehicle dealer license from the Tennessee motor vehicle commission; and

(10) The public automobile auction shall obtain and have displayed on its premises a valid license from the Tennessee auctioneer commission.

(c) Prior to a motor vehicle being subject to a public automobile auction, the public automobile auctioneer shall verify that the motor vehicle has a clean and unencumbered title, by obtaining a valid motor vehicle title history from the department of revenue or if the motor vehicle is registered in a state other than this state, the appropriate titling agency in the other state.

(d) All public automobile auctions must take place at the established place of business listed on the motor vehicle dealer license.

(e) The public automobile auction shall not sell new or unused motor vehicles or vehicles with a manufacturer's statement of origin.

(f) The public automobile auctioneer shall take possession of and retain title to each motor vehicle offered for sale at the auction. If the sale is finalized on a motor vehicle, the owner of the vehicle shall sign the title over to the public automobile auctioneer, who shall then sign the title over to and deliver the title to the buyer on the date of the sale. If a sale of the vehicle is not made, then the unsigned title shall be returned to the owner of the vehicle who offered the vehicle for sale at the auction. At all times, the public automobile auction shall be deemed the seller of the motor vehicle with the same duties and responsibilities as other licensed motor vehicle dealers.

(g) The public automobile auction may hire a licensed auctioneer to solicit bids at an auction.