Minnesota Session Laws - 2022, Regular Session

CHAPTER 75--H.F.No. 4030

An act

relating to commerce; modifying provisions governing bullion coins and bullion products dealers;

amending Minnesota Statutes 2020, sections 80G.01, subdivision 3, by adding a subdivision; 80G.02, subdivisions 1, 4; 80G.03, subdivision 2; 80G.04, subdivision 1; 80G.05, subdivision 1; 80G.06, subdivision 2; 80G.07, subdivision 1; Minnesota Statutes 2021 Supplement, sections 80G.06, subdivision 1; 80G.11.

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

Section 1.

Minnesota Statutes 2020, section 80G.01, subdivision 3, is amended to read:

Subd. 3.

Dealer.

(a) Subject to the exceptions in paragraph (b), a "dealer" means any person who buys, sells, solicits, or markets bullion products or investments in bullion products to consumers and deleted text begin : deleted text end new text begin conducts Minnesota transactions. new text end

deleted text begin (1) is incorporated, registered, domiciled, or otherwise located in this state; deleted text end

deleted text begin (2) has a dealer representative located in this state; or deleted text end

deleted text begin (3) does business with a consumer at a location in this state, or delivers or ships a bullion product or makes a payment to a consumer at an address in this state, unless the transaction occurs when the consumer is at a business location outside of this state. deleted text end

(b) A dealer does not include any of the following persons:

(1) a person who engages only in wholesale bullion product transactions with other persons who engage only in wholesale bullion product transactions or with dealers who buy or sell at retail and are properly registered under this chapter;

(2) a person who engages only in transactions at occasional garage or yard sales held at the seller's residence, farm auctions held at the seller's residence, or estate sales held at the decedent's residence;

(3) a person who is properly registered pursuant to chapter 80A, or the federal Securities Exchange Act of 1934 and rules promulgated thereunder as a securities broker dealer or broker dealer agent;

(4) an auctioneer who auctions bullion products on behalf of an owner, if the auctioneer does not take title or ownership of the bullion products, or the operator of an Internet website that allows users to offer the sale of bullion products through that website, does not set the price, is not the seller of record, and does not take possession of any bullion products to be offered;

(5) a person who engages only in transactions at no more than 12 trade shows per year deleted text begin in this state deleted text end where the consumer is present and the transaction is made at the trade show; or

(6) a federally or state-chartered bank, bank and trust, savings bank, savings association, or credit union or any operating subsidiary of them.

Sec. 2.

Minnesota Statutes 2020, section 80G.01, is amended by adding a subdivision to read:

new text begin Subd. 5a. new text end

new text begin Minnesota transaction. new text end

new text begin "Minnesota transaction" means a bullion product transaction conducted: new text end

new text begin (1) by a dealer that is incorporated, registered, domiciled, or otherwise located in Minnesota; new text end

new text begin (2) by a dealer representative at a location in Minnesota; new text end

new text begin (3) between a dealer and a consumer who lives in Minnesota; or new text end

new text begin (4) between a dealer and a Minnesota consumer when the transaction involves: new text end

new text begin (i) delivering or shipping a bullion product to an address in Minnesota; new text end

new text begin (ii) delivering to or shipping from a precious metal depository on behalf of a Minnesota resident; or new text end

new text begin (iii) making payment to a consumer or receiving a payment from a consumer at an address in Minnesota, unless the transaction occurs when the consumer is at a business location outside of Minnesota. new text end

Sec. 3.

Minnesota Statutes 2020, section 80G.02, subdivision 1, is amended to read:

Subdivision 1.

Registration required.

It is unlawful for a dealer or dealer representative to deleted text begin solicit, market, buy, sell, or deliver bullion products or investments in bullion products to a consumer deleted text end new text begin conduct a Minnesota transaction new text end without being registered by the commissioner as provided for in this chapter. A dealer must submit an application to register itself and each of its dealer representatives within 45 days of reaching $25,000 in the aggregate of deleted text begin bullion product transactions with consumers deleted text end new text begin Minnesota transactions new text end between July 1 and June 30 of any year, as determined by the transactions' sale or purchase prices. Once a dealer is required to register itself and its dealer representatives, the dealer must thereafter renew its registration and the registration of each of its dealer representatives in accordance with this chapter deleted text begin , regardless of the aggregate annual amount of transactions, deleted text end unless the person ceases to be a dealer. A dealer representative may not buy, sell, solicit, or market bullion products or investments in bullion products on behalf of a dealer unless the dealer is properly registered with the commissioner under this section.

Sec. 4.

Minnesota Statutes 2020, section 80G.02, subdivision 4, is amended to read:

Subd. 4.

Notice of change in registration information.

A new text begin registered new text end dealer must provide the commissioner written notice of a change in the dealer's name, assumed names, doing business as names, business addresses, including all business addresses at which it or its dealer representatives conduct business, owners, e-mail addresses, website domain names, or primary telephone number used by it or its dealer representatives to buy, sell, solicit, or market to consumers bullion products or investments in bullion products no later than 30 days after the change occurs.

Sec. 5.

Minnesota Statutes 2020, section 80G.03, subdivision 2, is amended to read:

Subd. 2.

Dealer responsibility for actions of dealer representatives.

The commissioner may take action against a dealer for any violations of this chapter by its dealer representatives conducting deleted text begin activities deleted text end new text begin Minnesota transactions new text end on behalf of or at the direction of the dealer. The commissioner may also take action against the dealer representative.

Sec. 6.

Minnesota Statutes 2020, section 80G.04, subdivision 1, is amended to read:

Subdivision 1.

Dealer registration precluded.

The commissioner must deny an application for registration or renewal of a dealer, or revoke such registration, if the bullion deleted text begin coin deleted text end new text begin product new text end dealer or its owners or officers have within the last ten years been convicted in any court of any financial crime or other crime involving fraud or theft.

Sec. 7.

Minnesota Statutes 2020, section 80G.05, subdivision 1, is amended to read:

Subdivision 1.

Screening process required.

Each new text begin registered new text end dealer must establish procedures to screen each of its owners and officers and each of its dealer representatives prior to submitting the application to the commissioner for initial registration and at each renewal. The results of such screenings shall be kept on file by the dealer and, if requested by the commissioner, provided to the commissioner as part of the initial registration and all renewal registrations.

Sec. 8.

Minnesota Statutes 2021 Supplement, section 80G.06, subdivision 1, is amended to read:

Subdivision 1.

Surety bond requirement.

(a) Every dealer shall maintain a current, valid surety bond issued by a surety company admitted to do business in Minnesota in an amount based on the new text begin Minnesota new text end transactions deleted text begin conducted with Minnesota consumers (purchases from and sales to consumers at retail) deleted text end during the 12-month period prior to registration, or renewal, whichever is applicable.

(b) The amount of the surety bond shall be as specified in the table below:

Transaction Amount in Preceding 12-month Period	Surety Bond Required
deleted text begin $0 deleted text end new text begin $25,000 new text end to $200,000	$25,000
$200,000.01 to $500,000	$50,000
$500,000.01 to $1,000,000	$100,000
$1,000,000.01 to $2,000,000	$150,000
Over $2,000,000	$200,000

Sec. 9.

Minnesota Statutes 2020, section 80G.06, subdivision 2, is amended to read:

Subd. 2.

Action on bond permitted.

A consumer new text begin involved in a Minnesota transaction who is new text end injured in money or property by a dealer's or dealer representative's failure to deleted text begin provide bullion products that the consumer has paid for or failure to remit money or goods owed to the consumer in connection with the consumer's sale of bullion products deleted text end new text begin comply with this chapter new text end may file a claim with the surety and if the claim is not paid, is authorized to bring an action based on the bond and recover against the surety. The commissioner or attorney general may also file a claim and bring an action on the bond and recover against the surety on behalf of a consumer so injured.

Sec. 10.

Minnesota Statutes 2020, section 80G.07, subdivision 1, is amended to read:

Subdivision 1.

Sales practices.

deleted text begin No deleted text end new text begin When conducting a Minnesota transaction, a new text end dealer or dealer representative deleted text begin shall deleted text end new text begin must not new text end :

(1) prior to a transaction regarding bullion products, or concurrent with the delivery thereof, fail to provide to the consumer an invoice, which, in a clear and conspicuous manner, discloses the dealer's registration number, the Department of Commerce's e-mail address and telephone number, the sale or purchase price, the quantity of the bullion products, and specifically identifies and describes the bullion products, as well as their precious metal content, but only if it differs from the precious metal content specified by a government mint issuing the product and struck on the product, or if the product is not issued by a government mint;

(2) fail to investigate any consumer complaint and retain records of all consumer complaints, the results of its investigations, and the dealer's response and resolution of the complaint;

(3) fail to deliver by common carrier bullion products to a consumer within the time agreed upon with the consumer or, if no such agreement exists, within 30 days after the consumer has paid for the bullion products;

(4) fail to pay a consumer for purchased bullion products within the time agreed upon with the consumer or, if no such agreement exists, within 30 days after the consumer has provided the bullion products;

(5) misrepresent the delivery date of bullion products or payment for bullion products, or the dealer or representative's professional qualifications, affiliations, or registration;

(6) misrepresent any material aspect of a bullion product, including its performance, efficacy, nature, investment value, central characteristics, liquidity, earnings potential, or profitability;

(7) misrepresent the manner in which any bullion products a consumer provides will be stored or otherwise handled once received;

(8) renegotiate the terms of a sale or purchase after receiving a consumer's payment or bullion products without first obtaining the consumer's agreement to renegotiate and offering the consumer the option to have the payment fully refunded or the entirety of the bullion products returned;

(9) fail to respond within three business days to a consumer inquiry about the delivery status of bullion products that the consumer has paid for but not yet received or the status of a payment for bullion products that the consumer has already provided;

(10) telephone or solicit a consumer, or sell or provide the consumer's name to any other dealer or dealer representative, after the consumer requests not to be contacted;

(11) violate a subpoena or order of the commissioner or a court;

(12) make any communication to a potential buyer or seller of bullion products that misrepresents the relationship, if any, between the dealer or dealer representative and any government agency or mint;

(13) improperly withhold, misappropriate, or convert any money or properties received in the course of buying, selling, soliciting, or marketing bullion products or investments in bullion products to consumers;

(14) misrepresent the terms of an actual or proposed purchase or sale of bullion products or investment in bullion products to a consumer; or

(15) violate any other federal, state, or local law or rule related to selling, purchasing, soliciting, or marketing of bullion products, investments in bullion products, or precious metals, or any federal, state, or local law related to fraudulent, coercive, or dishonest practices, or federal, state, or local law related to taxation or labor standards.

Sec. 11.

Minnesota Statutes 2021 Supplement, section 80G.11, is amended to read:

80G.11 NOTIFICATION TO COMMISSIONER.

A new text begin registered new text end dealer must notify the commissioner of any dealer representative termination within ten days of the termination if the termination is based in whole or in part on a violation of this chapter.

Presented to the governor May 20, 2022

Signed by the governor May 22, 2022, 3:42 p.m.