HF 1457

as introduced - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to commerce; regulating cigarette delivery 
  1.3             sales; providing penalties; proposing coding for new 
  1.4             law in Minnesota Statutes, chapter 325D. 
  1.5   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.6      Section 1.  [325D.425] [CIGARETTE DELIVERY SALES.] 
  1.7      Subdivision 1.  [DEFINITIONS.] For purposes of this 
  1.8   section, the following terms have the meanings given them: 
  1.9      (1) "adult" means a person who is at least the legal 
  1.10  minimum purchase age; 
  1.11     (2) "consumer" means an individual who is not licensed as a 
  1.12  wholesaler under section 297F.03 or retailer under chapter 461; 
  1.13     (3) "delivery sale" means any sale of cigarettes to a 
  1.14  consumer in the state where either (i) the purchaser submits the 
  1.15  order for the sale by means of a telephonic or other method of 
  1.16  voice transmission, the mails or any other delivery service, or 
  1.17  the Internet or other on-line service; or (ii) the cigarettes 
  1.18  are delivered by use of the mails or a delivery service. 
  1.19  A sale of cigarettes is a delivery sale regardless of whether 
  1.20  the seller is located within or without the state.  A sale of 
  1.21  cigarettes not for personal consumption to a person who is a 
  1.22  wholesale dealer or a retail dealer is not a delivery sale; 
  1.23     (4) "delivery service" means any person who is engaged in 
  1.24  the commercial delivery of letters, packages, or other 
  1.25  containers; 
  2.1      (5) "department" means the department of revenue; 
  2.2      (6) "legal minimum purchase age" is the minimum age at 
  2.3   which an individual may legally purchase cigarettes in the 
  2.4   state; 
  2.5      (7) "mails" or "mailing" means the shipment of cigarettes 
  2.6   through the United States Post Office; 
  2.7      (8) "shipping container" means a container in which 
  2.8   cigarettes are shipped in connection with a delivery sale; and 
  2.9      (9) "shipping documents" means bills of lading, airbills, 
  2.10  or any other documents used to evidence the undertaking by a 
  2.11  delivery service to deliver letters, packages, or other 
  2.12  containers. 
  2.13     Subd. 2.  [REQUIREMENTS.] (a) No person shall make a 
  2.14  delivery sale of cigarettes to any individual who is under the 
  2.15  legal minimum purchase age in the state. 
  2.16     (b) Each person accepting a purchase order for a delivery 
  2.17  sale shall comply with: 
  2.18     (1) the age verification requirements in subdivision 3; 
  2.19     (2) the disclosure requirements in subdivision 4; 
  2.20     (3) the shipping requirements in subdivision 5; 
  2.21     (4) the registration and reporting requirements in 
  2.22  subdivision 6; 
  2.23     (5) the tax collection requirements in subdivision 7; and 
  2.24     (6) all other laws of the state generally applicable to 
  2.25  sales of cigarettes that occur entirely within the state 
  2.26  including, but not limited to, those laws imposing: 
  2.27     (i) excise taxes; 
  2.28     (ii) sales taxes; and 
  2.29     (iii) license and revenue-stamping requirements. 
  2.30     Subd. 3.  [AGE VERIFICATION.] (a) No person shall mail, 
  2.31  ship, or otherwise deliver cigarettes in connection with a 
  2.32  delivery sale unless, prior to the first delivery sale to the 
  2.33  consumer, the person: 
  2.34     (1) obtains from the prospective consumer a certification 
  2.35  that includes a reliable confirmation that the consumer is at 
  2.36  least the legal minimum purchase age, and a statement signed by 
  3.1   the prospective consumer in writing that certifies the 
  3.2   prospective consumer's address and that the consumer is at least 
  3.3   18 years of age.  The statement must also confirm that (i) the 
  3.4   prospective consumer understands that signing another person's 
  3.5   name to the certification is illegal, (ii) the sale of 
  3.6   cigarettes to individuals under the legal minimum purchase age 
  3.7   is illegal, (iii) the purchase of cigarettes by individuals 
  3.8   under the legal minimum purchase age is illegal under the laws 
  3.9   of the state, and (iv) the prospective consumer wants to receive 
  3.10  mailings from a tobacco company; 
  3.11     (2) makes a good faith effort to verify the information 
  3.12  contained in the certification provided by the prospective 
  3.13  consumer pursuant to clause (1) against a commercially available 
  3.14  database, or obtains a photocopy or other image of the valid, 
  3.15  government-issued identification stating the date of birth or 
  3.16  age of the individual placing the order; 
  3.17     (3) provides to the prospective consumer, via e-mail or 
  3.18  other means, a notice that meets the requirements of subdivision 
  3.19  4; and 
  3.20     (4) in the case of an order for cigarettes pursuant to an 
  3.21  advertisement on the Internet, receives payment for the delivery 
  3.22  sale from the prospective consumer by a credit or debit card 
  3.23  that has been issued in the consumer's name, or by check. 
  3.24     (b) Persons accepting purchase orders for delivery sales 
  3.25  may request that prospective consumers provide their e-mail 
  3.26  addresses. 
  3.27     Subd. 4.  [DISCLOSURE.] The notice required under 
  3.28  subdivision 3, paragraph (a), clause (3), must include: 
  3.29     (1) a prominent and clearly legible statement that 
  3.30  cigarette sales to consumers below the legal minimum purchase 
  3.31  age are illegal; 
  3.32     (2) a prominent and clearly legible statement that consists 
  3.33  of one of the warnings set forth in section 4(a)(1) of the 
  3.34  Federal Cigarette Labeling and Advertising Act, United States 
  3.35  Code, title 15, section 1333(a)(1), rotated on a quarterly 
  3.36  basis; 
  4.1      (3) a prominent and clearly legible statement that sales of 
  4.2   cigarettes are restricted to those consumers who provide 
  4.3   verifiable proof of age in accordance with subdivision 3; and 
  4.4      (4) a prominent and clearly legible statement that 
  4.5   cigarette sales are subject to tax under subdivision 7, and an 
  4.6   explanation of how the tax has been, or is to be, paid with 
  4.7   respect to the delivery sale. 
  4.8      Subd. 5.  [SHIPPING.] (a) Each person who mails, ships, or 
  4.9   otherwise delivers cigarettes in connection with a delivery sale 
  4.10  shall: 
  4.11     (1) include as part of the bill of lading or other shipping 
  4.12  documents a clear and conspicuous statement providing as follows:
  4.13  "Cigarettes:  Minnesota Law Prohibits Shipping to Individuals 
  4.14  Under 18, and Requires the Payment of all Applicable Taxes"; 
  4.15     (2) use a method of mailing, shipping, or delivery that 
  4.16  obligates the delivery service to require (i) the consumer 
  4.17  placing the purchase order for the delivery sale, or another 
  4.18  adult of legal minimum purchase age residing at the consumer's 
  4.19  address, to sign to accept delivery of the shipping container, 
  4.20  and (ii) proof, in the form of a valid, government-issued 
  4.21  identification bearing a photograph of the individual who signs 
  4.22  to accept delivery of the shipping container, demonstrating that 
  4.23  this individual is either the addressee or another adult of 
  4.24  legal minimum purchase age residing at the consumer's address.  
  4.25  However, proof of the legal minimum purchase age is required 
  4.26  only if the individual appears to be under 27 years of age; and 
  4.27     (3) provide to the delivery service retained for the 
  4.28  delivery sale evidence of full compliance with subdivision 7. 
  4.29     (b) If the person accepting a purchase order for a delivery 
  4.30  sale delivers the cigarettes without using a delivery service, 
  4.31  the person shall comply with all requirements of this section 
  4.32  applicable to a delivery service and is in violation of the 
  4.33  provisions of this section if the person fails to comply with 
  4.34  any such requirement. 
  4.35     Subd. 6.  [REGISTRATION AND REPORTING.] (a) Prior to making 
  4.36  delivery sales or mailing, shipping, or otherwise delivering 
  5.1   cigarettes in connection with any such sales, every person shall 
  5.2   file with the department a statement setting forth the person's 
  5.3   name, trade name, and the address of the person's principal 
  5.4   place of business and any other place of business. 
  5.5      (b) No later than the tenth day of each calendar month, 
  5.6   each person that has made a delivery sale or mailed, shipped, or 
  5.7   otherwise delivered cigarettes in connection with any such sale 
  5.8   during the previous calendar month shall file with the 
  5.9   department a memorandum or a copy of the invoice that provides 
  5.10  for each and every such delivery sale: 
  5.11     (1) the name and address of the consumer to whom the 
  5.12  delivery sale was made; 
  5.13     (2) the brand or brands of the cigarettes that were sold in 
  5.14  the delivery sale; and 
  5.15     (3) the quantity of cigarettes that were sold in the 
  5.16  delivery sale. 
  5.17     (c) Any person that satisfies the requirements of United 
  5.18  States Code, title 15, section 376, satisfies the requirements 
  5.19  of this section. 
  5.20     Subd. 7.  [COLLECTION OF TAXES.] Each person accepting a 
  5.21  purchase order for a delivery sale shall collect and remit to 
  5.22  the department all cigarette taxes imposed by the state with 
  5.23  respect to the delivery sale, except that the collection and 
  5.24  remission is not required to the extent the person has obtained 
  5.25  proof, in the form of the presence of applicable tax stamps or 
  5.26  otherwise, that the taxes already have been paid to the state. 
  5.27     Subd. 8.  [PENALTIES.] (a) Except as otherwise provided in 
  5.28  this section, a first violation of any provision of this section 
  5.29  is punishable by a fine of $1,000 or five times the retail value 
  5.30  of the cigarettes involved, whichever is greater.  A second or 
  5.31  subsequent violation of any provision of this section is 
  5.32  punishable by a fine of $5,000 or five times the retail value of 
  5.33  the cigarettes involved, whichever is greater. 
  5.34     (b) Any person who knowingly violates any provision of this 
  5.35  section, or who knowingly and falsely submits a certification 
  5.36  under subdivision 3, paragraph (a), clause (1), in another 
  6.1   person's name, shall, for each such offense, be fined $10,000 or 
  6.2   five times the retail value of the cigarettes involved, 
  6.3   whichever is greater, or imprisoned for not more than five 
  6.4   years, or both. 
  6.5      (c) Any person failing to collect or remit to the 
  6.6   department any tax required in connection with a delivery sale 
  6.7   must be assessed, in addition to any other penalty, a penalty of 
  6.8   five times the retail value of the cigarettes involved. 
  6.9      (d) Any cigarettes sold or attempted to be sold in a 
  6.10  delivery sale that do not meet the requirements of this section 
  6.11  must be forfeited to the state and destroyed. 
  6.12     (e) All fixtures, equipment, and all other materials and 
  6.13  personal property on the premises of any person who, with the 
  6.14  intent to defraud the state, violates any of the requirements of 
  6.15  this section, must be forfeited to the state. 
  6.16     Subd. 9.  [ENFORCEMENT.] The attorney general, or any 
  6.17  person who holds a valid permit under United States Code, title 
  6.18  26, section 5712, may bring an action in the appropriate court 
  6.19  in the state to prevent or restrain violations of this section 
  6.20  by any person, or any person controlling such person.