Minnesota Legislature
HF 3717
as introduced - 91st Legislature (2019 - 2020) Posted on 02/27/2020 08:20pm
Current Version - as introduced
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A bill for an act
relating to tobacco products; modifying the application of registration and reporting
requirements for out-of-state retailers of tobacco products; modifying requirements
for tobacco product delivery sales; modifying the definition of electronic delivery
device; making changes to criminal penalties; amending Minnesota Statutes 2018,
sections 297F.01, subdivision 10a; 297F.031; 297F.09, subdivision 4a; 325F.781;
609.685, subdivision 1; proposing coding for new law in Minnesota Statutes,
chapter 325F.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2018, section 297F.01, subdivision 10a, is amended to read:
Subd. 10a.
Out-of-state retailer.
"Out-of-state retailer" means a person engaged outside
of this state in the business of selling, or offering to sell, cigarettes or tobacco products to
deleted text begin consumersdeleted text end new text begin distributors or retailersnew text end located in this state.
Sec. 2.
Minnesota Statutes 2018, section 297F.031, is amended to read:
297F.031 REGISTRATION REQUIREMENT.
Prior to making delivery sales or shipping cigarettes or tobacco products in connection
with any salesnew text begin to a distributor or retailer located in this statenew text end , an out-of-state retailer shall
file with the Department of Revenue a statement setting forth the out-of-state retailer's name,
trade name, and the address of the out-of-state retailer's principal place of business and any
other place of business.
Sec. 3.
Minnesota Statutes 2018, section 297F.09, subdivision 4a, is amended to read:
Subd. 4a.
Reporting requirements.
No later than the 18th day of each calendar month,
an out-of-state retailer that has made a delivery of cigarettes or tobacco products or shipped
or delivered cigarettes or tobacco products into the state deleted text begin in a delivery saledeleted text end in the previous
calendar month shall file with the Department of Revenue reportsnew text begin ,new text end in the form and in the
manner prescribed by the commissioner of revenuenew text begin ,new text end that deleted text begin providesdeleted text end new text begin providenew text end for each deleted text begin deliverydeleted text end
saledeleted text begin ,deleted text end the name and address of the purchaser and the brand or brands and quantity of cigarettes
or tobacco products sold. A tobacco retailer that meets the requirements of United States
Code, title 15, section 375 et seq. satisfies the requirements of this subdivision.
Sec. 4.
Minnesota Statutes 2018, section 325F.781, is amended to read:
325F.781 deleted text begin REQUIREMENTS;deleted text end TOBACCO PRODUCT DELIVERY SALESnew text begin TO
CONSUMERSnew text end .
Subdivision 1.
Definitions.
(a) For purposes of this section, the following terms have
the meanings given, unless the language or context clearly provides otherwise.
(b) "Consumer" means an individual who purchases, receives, or possesses tobacco
products for personal consumption and not for resale.
(c) "Delivery sale" meansdeleted text begin :
deleted text end
deleted text begin (1)deleted text end a sale of tobacco products new text begin by a retailer in this state new text end to a consumer in this state new text begin who
resides in the jurisdiction where the retailer is licensed, new text end when:
deleted text begin (i)deleted text end new text begin (1)new text end the deleted text begin purchaserdeleted text end new text begin consumernew text end submits the order for the sale by means of a telephonic
or other method of voice transmission, the mail deleted text begin or any other delivery servicedeleted text end , or the Internet
or other online service; deleted text begin ordeleted text end new text begin and
new text end
deleted text begin (ii)deleted text end new text begin (2)new text end the tobacco products are delivered deleted text begin by use of the mail or other delivery service;
ordeleted text end new text begin in-person by the retailer to the consumer.
new text end
deleted text begin
(2) a sale of tobacco products that satisfies the criteria in clause (1), item (i), regardless
of whether the seller is located inside or outside of the state.
deleted text end
A sale of tobacco products to an individual in this state must be treated as a sale to a
consumer, unless the individual new text begin who purchases the tobacco products new text end is licensed new text begin in this state
new text end as a distributor or retailer of tobacco products.
(d) "Delivery service" means a person, including the United States Postal Service, deleted text begin thatdeleted text end new text begin
whonew text end is engaged in the commercial delivery of letters, packages, new text begin products, new text end or other containers.
(e) "Distributor" means a person, whether located inside or outside of this state, other
than a retailer, who deleted text begin sells or distributes tobacco products in the statedeleted text end new text begin is required to be licensed
as a cigarette distributor or tobacco products distributor under section 297F.03new text end . Distributor
does not include a tobacco products manufacturer, export warehouse proprietor, or importer
with a valid permit under United States Code, title 26, section 5712 (1997), if the person
sells or distributes tobacco products in this state only to distributors who hold valid and
current licenses under the laws of a state, or to an export warehouse proprietor or another
manufacturer. Distributor does not include a common or contract carrier that is transporting
tobacco products under a proper bill of lading or freight bill that states the quantity, source,
and destination of tobacco products, or a person who ships tobacco products through this
state by common or contract carrier under a new text begin proper new text end bill of lading or freight bill.
(f) "Retailer" means a persondeleted text begin , whetherdeleted text end located deleted text begin inside or outsidedeleted text end new text begin innew text end this statedeleted text begin ,deleted text end who deleted text begin sells
or distributesdeleted text end new text begin is required to be licensed under chapter 461 to sellnew text end tobacco products to a
consumer in this statenew text begin , and who is licensed and engaged in the business of selling or offering
to sell tobacco products to consumersnew text end .
(g) "Tobacco products" means:
(1) cigarettes, as defined in section 297F.01, subdivision 3;
deleted text begin
(2) smokeless tobacco as defined in section 325F.76; and
deleted text end
deleted text begin
(3) premium cigars as defined in section 297F.01, subdivision 13a.
deleted text end
new text begin
(2) electronic delivery devices, as defined in section 609.685, subdivision 1;
new text end
new text begin
(3) nicotine or lobelia delivery products, as described in section 609.6855;
new text end
new text begin
(4) tobacco products, as defined in section 297F.01, subdivision 19; and
new text end
new text begin
(5) tobacco-related devices, as defined in section 609.685, subdivision 1.
new text end
new text begin
(h) "Unlicensed seller" means any person who is not licensed under section 297F.03 or
chapter 461 to sell the particular tobacco product to the purchaser or possessor of the product.
new text end
Subd. 2.
new text begin Retailer new text end requirements for accepting deleted text begin orderdeleted text end new text begin consumer ordersnew text end for delivery
deleted text begin saledeleted text end new text begin salesnew text end .
(a) This subdivision applies to new text begin a retailer's new text end acceptance of an order for a delivery
sale of tobacco productsnew text begin to a consumer in this state who resides in the jurisdiction where
the retailer is licensednew text end .
(b) When accepting the first order for a delivery sale from a consumer, the deleted text begin tobaccodeleted text end
retailer shall obtain the following information from the person placing the order:
(1) a copy of a valid government-issued document that provides the person's name,
current address, photograph, and date of birth; and
(2) an original written statement signed by the person documenting that the person:
(i) is of legal age to purchase tobacco products in the state;
(ii) has made a choice whether to receive deleted text begin mailingsdeleted text end new text begin delivery salesnew text end from deleted text begin a tobaccodeleted text end new text begin thenew text end
retailer;
(iii) understands that providing false information may be a violation of law; and
(iv) understands that it is a violation of law to purchase tobacco products for subsequent
resale or for delivery to persons who are under the legal age to purchase tobacco products.
(c) If an order is made as a result of advertisement over the Internet, the deleted text begin tobaccodeleted text end retailer
shall request the e-mail address of the deleted text begin purchaserdeleted text end new text begin consumernew text end and shall receive payment new text begin only
new text end by credit card or check prior to deleted text begin shippingdeleted text end new text begin deliverynew text end .
(d) Prior to deleted text begin shippingdeleted text end new text begin deliveringnew text end the tobacco products, the deleted text begin tobaccodeleted text end retailer shall verify
the information provided under paragraph (b) against a commercially available database.
Any such database or databases may also include age and identity information from other
government or validated commercial sources, if that additional information is regularly used
by government and businesses for the purpose of identity verification and authentication,
and if the additional information is used only to supplement and not to replace the
government-issued identification data in the age and identity verification process.
new text begin Subd. 2a. new text end
new text begin Prohibited sales to consumers. new text end
new text begin
A delivery sale of any tobacco product to a
consumer in this state by any person other than a retailer is prohibited. A retailer must not
offer to deliver, attempt to deliver, or deliver any tobacco product to a consumer in this state
in any manner other than by delivery sale. A retailer must not use a delivery service to
deliver tobacco products purchased by a consumer in a delivery sale. A retailer must not
offer to deliver, attempt to deliver, or deliver tobacco products to a consumer who resides
outside the jurisdiction where the retailer is licensed.
new text end
Subd. 3.
Requirements for deleted text begin shippingdeleted text end new text begin delivery ofnew text end a delivery sale.
(a) This subdivision
applies to a deleted text begin tobaccodeleted text end retailer deleted text begin shippingdeleted text end new text begin deliveringnew text end tobacco products new text begin to a consumer in this state
who resides in the jurisdiction where the retailer is licensed, new text end pursuant to a delivery sale.
(b) The deleted text begin tobaccodeleted text end retailer shall clearly mark the outside of the package of tobacco products
to be deleted text begin shippeddeleted text end new text begin deliverednew text end "tobacco products - adult signature required" and to show the name
new text begin and address new text end of the deleted text begin tobaccodeleted text end retailer.
(c) deleted text begin The tobaccodeleted text end new text begin Anew text end retailer new text begin engaging in in-person delivery of tobacco products new text end shall deleted text begin utilize
a delivery service that imposesdeleted text end new text begin comply withnew text end the following requirements:
(1) an adult new text begin of legal age to purchase tobacco products in this state new text end must sign for the
delivery; and
(2) the person signing for the delivery must show valid government-issued identification
that contains a photograph of the person signing for the delivery and indicates that the person
signing for the delivery is of legal age to purchase tobacco products and resides at the
delivery address.
(d) The retailer must provide new text begin to the retailer's delivery employees new text end delivery instructions
that clearly indicate the requirements of this subdivision and must declare new text begin to the retailer's
delivery employees new text end that state law requires compliance with the requirements.
(e) No criminal penalty may be imposed on a deleted text begin persondeleted text end new text begin retailer, distributor, or unlicensed
sellernew text end for a violation of this section other than a violation described in paragraph (f) or (g).
Whenever it appears to the commissioner that deleted text begin any persondeleted text end new text begin a retailer, distributor, or unlicensed
sellernew text end has engaged in any act or practice constituting a violation of this section, and the
violation is not within deleted text begin twodeleted text end new text begin threenew text end years of any previous violation of this section, the
commissioner shall issue and cause to be served upon the deleted text begin persondeleted text end new text begin retailer, distributor, or
unlicensed sellernew text end an order requiring deleted text begin thedeleted text end new text begin thatnew text end person to cease and desist from violating this
section. The order must give reasonable notice of the rights of the deleted text begin persondeleted text end new text begin retailer, distributor,
or unlicensed sellernew text end to request a hearing and must state the reason for the entry of the order.
Unless otherwise agreed between the parties, a hearing shall be held not later than seven
days after the request for the hearing is received by the commissioner after which and within
20 days after the receipt of the administrative law judge's report and subsequent exceptions
and argument, the commissioner shall issue an order vacating the cease and desist order,
modifying it, or making it permanent as the facts require. If no hearing is requested within
30 days of the service of the order, the order becomes final and remains in effect until
modified or vacated by the commissioner. All hearings shall be conducted in accordance
with the provisions of chapter 14. If the deleted text begin persondeleted text end new text begin retailer, distributor, or unlicensed sellernew text end to
whom a cease and desist order is issued fails to appear at the hearing after being duly notified,
the deleted text begin persondeleted text end new text begin retailer, distributor, or unlicensed sellernew text end shall be deemed in default, and the
proceeding may be determined against the deleted text begin persondeleted text end new text begin retailer, distributor, or unlicensed sellernew text end
upon consideration of the cease and desist order, the allegations of which may be deemed
to be true.
(f) Any deleted text begin persondeleted text end new text begin retailer, distributor, or unlicensed sellernew text end who violates this section within
deleted text begin twodeleted text end new text begin threenew text end years of a violation for which a cease and desist order was issued under paragraph
(e)deleted text begin ,deleted text end is guilty of a misdemeanor.
(g) Any deleted text begin persondeleted text end new text begin retailer, distributor, or unlicensed sellernew text end who commits a third or subsequent
violation of this section, including a violation for which a cease and desist order was issued
under paragraph deleted text begin (c),deleted text end new text begin (e)new text end within any subsequent deleted text begin two-yeardeleted text end new text begin three-yearnew text end period is guilty of a
gross misdemeanor.
new text begin
(h) Each incidence of a sale, offer to sell, or attempt to sell a tobacco product in violation
of this section is a separate violation. Each incidence of a delivery or shipment, offer to
deliver or ship, or attempt to deliver or ship a tobacco product in violation of this section
is a separate violation.
new text end
Subd. 4.
Common carriers.
This section may not be construed as imposing liability
upon any common carrier, or officers or employees of the common carrier, when acting
within the new text begin legal new text end scope of business of the common carrier.
deleted text begin Subd. 5. deleted text end
deleted text begin Registration requirement. deleted text end
deleted text begin
Prior to making delivery sales or shipping tobacco
products in connection with any sales, an out-of-state retailer must meet the requirements
of section 297F.031.
deleted text end
deleted text begin Subd. 6. deleted text end
deleted text begin Collection of taxes. deleted text end
deleted text begin
(a) Prior to shipping any tobacco products to a purchaser
in this state, the out-of-state retailer shall comply with all requirements of chapter 297F and
shall ensure that all state excise taxes and fees that apply to such tobacco products have
been collected and paid to the state and that all related state excise tax stamps or other
indicators of state excise tax payment have been properly affixed to those tobacco products.
deleted text end
deleted text begin
(b) In addition to any penalties under chapter 297F, a distributor who fails to pay any
tax due according to paragraph (a) shall pay, in addition to any other penalty, a penalty of
50 percent of the tax due but unpaid.
deleted text end
deleted text begin Subd. 7. deleted text end
deleted text begin Application of state laws. deleted text end
deleted text begin
All state laws that apply to in-state tobacco product
retailers shall apply to Internet and mail-order sellers that sell into this state.
deleted text end
Subd. 8.
Forfeiture.
Any tobacco product sold or attempted to be sold new text begin to a consumer
in this state new text end in a delivery sale that does not meet the requirements of this section is deemed
to be contraband and is subject to forfeiture in the same manner as and in accordance with
the provisions of section 297F.21.
Subd. 9.
Civil penalties.
A deleted text begin tobaccodeleted text end retailer deleted text begin ordeleted text end new text begin ,new text end distributornew text begin , or unlicensed sellernew text end who
violates this section deleted text begin or rules adopted under this sectiondeleted text end new text begin or section 325F.782 new text end is subject to the
following fines:
(1) for the first violation, a fine of not more than $1,000; and
(2) for the second and any subsequent violation, a fine of not more than $5,000.
new text begin
Each incidence of a sale, offer to sell, or attempt to sell a tobacco product in violation of
this section or section 325F.782 is a separate violation. Each incidence of a delivery or
shipment, offer to deliver or ship, or attempt to deliver or ship a tobacco product in violation
of this section or section 325F.782 is a separate violation.
new text end
Subd. 10.
Enforcement.
The attorney general may bring an action to enforce this section
new text begin and section 325F.782 new text end and may seek injunctive relief, including a preliminary or final
injunction, and fines, penalties, and equitable relief and may seek to prevent or restrain
actions in violation of this section by any person or any person controlling such person. In
addition, a violation of this section is a violation of the Unlawful Trade Practices Act,
sections 325D.09 to 325D.16.
Sec. 5.
new text begin
[325F.782] REQUIREMENTS FOR OUT-OF-STATE RETAILERS AND
DISTRIBUTORS SHIPPING OR DELIVERING TOBACCO PRODUCTS TO
IN-STATE RETAILERS OR DISTRIBUTORS.
new text end
new text begin Subdivision 1. new text end
new text begin Definitions. new text end
new text begin
For purposes of this section:
new text end
new text begin
(1) "distributor" and "tobacco products" have the meanings given in section 325F.781,
subdivision 1;
new text end
new text begin
(2) "out-of-state retailer" has the meaning given in section 297F.01, subdivision 10a;
and
new text end
new text begin
(3) "retailer in this state" has the meaning given to "retailer" in section 325F.781,
subdivision 1.
new text end
new text begin Subd. 2. new text end
new text begin License requirement. new text end
new text begin
Prior to delivering or shipping any tobacco products to
a distributor or retailer in this state in connection with any sales to a distributor or retailer
in this state, a distributor or any other person outside this state must meet the license
requirements of section 297F.03.
new text end
new text begin Subd. 3. new text end
new text begin Collection of taxes. new text end
new text begin
(a) Prior to shipping any tobacco products to a distributor
or a retailer in this state, an out-of-state retailer must: (1) comply with all requirements of
chapter 297F; (2) ensure all state excise taxes and fees that apply to such tobacco products
have been collected and paid to the state; and (3) ensure all related state excise tax stamps
or other indicators of state excise tax payments have been properly affixed to the tobacco
products.
new text end
new text begin
(b) In addition to any penalties under chapter 297F, a distributor who fails to pay any
tax due according to paragraph (a) must pay a penalty of 50 percent of the tax due but
unpaid.
new text end
new text begin Subd. 4. new text end
new text begin Application of state laws. new text end
new text begin
All state laws that apply to in-state distributors also
apply to out-of-state distributors who sell or ship tobacco products into this state.
new text end
Sec. 6.
Minnesota Statutes 2018, section 609.685, subdivision 1, is amended to read:
Subdivision 1.
Definitions.
For the purposes of this section, the following terms shall
have the meanings respectively ascribed to them in this section.
(a) "Tobacco" means cigarettes and any product containing, made, or derived from
tobacco that is intended for human consumption, whether chewed, smoked, absorbed,
dissolved, inhaled, snorted, sniffed, or ingested by any other means, or any component,
part, or accessory of a tobacco product including but not limited to cigars; cheroots; stogies;
perique; granulated, plug cut, crimp cut, ready rubbed, and other smoking tobacco; snuff;
snuff flour; cavendish; plug and twist tobacco; fine cut and other chewing tobaccos; shorts;
refuse scraps, clippings, cuttings and sweepings of tobacco; and other kinds and forms of
tobacco. Tobacco excludes any tobacco product that has been approved by the United States
Food and Drug Administration for sale as a tobacco-cessation product, as a
tobacco-dependence product, or for other medical purposes, and is being marketed and sold
solely for such an approved purpose.
(b) "Tobacco-related devices" means cigarette papers or pipes for smoking or other
devices intentionally designed or intended to be used in a manner which enables the chewing,
sniffing, smoking, or inhalation of vapors of tobacco or tobacco products. Tobacco-related
devices include components of tobacco-related devices which may be marketed or sold
separately.
(c) "Electronic delivery device" means any product containing or delivering nicotine,
lobelia, or any other substancenew text begin , whether natural or synthetic,new text end intended for human consumption
deleted text begin that can be used by a person to simulate smoking in the delivery of nicotine or any other
substancedeleted text end through inhalation ofnew text begin aerosol ornew text end vapor from the product. new text begin Electronic delivery device
includes but is not limited to devices manufactured, marketed, or sold as electronic cigarettes,
electronic cigars, electronic pipes, vape pens, mods, tank systems, or any other product
name or descriptor. new text end Electronic delivery device includes any component part of a product,
whether or not marketed or sold separately. Electronic delivery device deleted text begin does not include any
product that has been approved or certified by the United States Food and Drug
Administration for sale as a tobacco-cessation product, as a tobacco-dependence product,
or for other medical purposes, and is marketed and sold for such an approved purpose.deleted text end new text begin
excludes drugs, devices, or combination products, as those terms are defined in the federal
Food, Drug, and Cosmetic Act, that are authorized for sale by the United States Food and
Drug Administration.
new text end