1.1                          A bill for an act 
  1.2             relating to tobacco; regulating sales of certain 
  1.3             cigarettes; prohibiting sales of certain cigarettes; 
  1.4             defining contraband; providing a private cause of 
  1.5             action; amending Minnesota Statutes 1998, section 
  1.6             297F.21, subdivision 1, as amended by Laws 2000, 
  1.7             chapter 490, article 10, section 20; proposing coding 
  1.8             for new law in Minnesota Statutes, chapter 325D. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 1998, section 297F.21, 
  1.11  subdivision 1, as amended by Laws 2000, chapter 490, article 10, 
  1.12  section 20, is amended to read: 
  1.13     Subdivision 1.  [CONTRABAND DEFINED.] The following are 
  1.14  declared to be contraband and therefore subject to civil and 
  1.15  criminal penalties under this chapter: 
  1.16     (a) Cigarette packages which do not have stamps affixed to 
  1.17  them as provided in this chapter, including but not limited to 
  1.18  (i) packages with illegible stamps and packages with stamps that 
  1.19  are not complete or whole even if the stamps are legible, and 
  1.20  (ii) all devices for the vending of cigarettes in which packages 
  1.21  as defined in item (i) are found, including all contents 
  1.22  contained within the devices. 
  1.23     (b) A device for the vending of cigarettes and all packages 
  1.24  of cigarettes, where the device does not afford at least partial 
  1.25  visibility of contents.  Where any package exposed to view does 
  1.26  not carry the stamp required by this chapter, it shall be 
  1.27  presumed that all packages contained in the device are unstamped 
  2.1   and contraband. 
  2.2      (c) A device for the vending of cigarettes to which the 
  2.3   commissioner or authorized agents have been denied access for 
  2.4   the inspection of contents.  In lieu of seizure, the 
  2.5   commissioner or an agent may seal the device to prevent its use 
  2.6   until inspection of contents is permitted. 
  2.7      (d) A device for the vending of cigarettes which does not 
  2.8   carry the name and address of the owner, plainly marked and 
  2.9   visible from the front of the machine. 
  2.10     (e) A device including, but not limited to, motor vehicles, 
  2.11  trailers, snowmobiles, airplanes, and boats used with the 
  2.12  knowledge of the owner or of a person operating with the consent 
  2.13  of the owner for the storage or transportation of more than 
  2.14  5,000 cigarettes which are contraband under this subdivision.  
  2.15  When cigarettes are being transported in the course of 
  2.16  interstate commerce, or are in movement from either a public 
  2.17  warehouse to a distributor upon orders from a manufacturer or 
  2.18  distributor, or from one distributor to another, the cigarettes 
  2.19  are not contraband, notwithstanding the provisions of clause (a).
  2.20     (f) Cigarette packages or tobacco products obtained from an 
  2.21  unlicensed seller. 
  2.22     (g) Cigarette packages offered for sale or held as 
  2.23  inventory in violation of section 297F.20, subdivision 7. 
  2.24     (h) Tobacco products on which the tax has not been paid by 
  2.25  a licensed distributor. 
  2.26     (i) Any cigarette packages or tobacco products offered for 
  2.27  sale or held as inventory for which there is not an invoice from 
  2.28  a licensed seller as required under section 297F.13, subdivision 
  2.29  4.  
  2.30     (j) Cigarette packages which have been imported into the 
  2.31  United States in violation of United States Code, title 26, 
  2.32  section 5754.  All cigarettes held in violation of that section 
  2.33  shall be presumed to have entered the United States after 
  2.34  December 31, 1999, in the absence of proof to the contrary. 
  2.35     Sec. 2.  [325D.421] [UNLAWFUL CIGARETTE TRADE PRACTICES.] 
  2.36     Subdivision 1.  [PROHIBITIONS.] (a) It is unlawful for any 
  3.1   person to sell or distribute in this state; to acquire, hold, 
  3.2   own, possess, or transport, for sale or distribution in this 
  3.3   state; or to import, or cause to be imported, into this state 
  3.4   for sale or distribution in this state, any cigarettes: 
  3.5      (1) the package of which: 
  3.6      (i) bears any statement, label, stamp, sticker, or notice 
  3.7   indicating that the manufacturer did not intend the cigarettes 
  3.8   to be sold, distributed, or used in the United States, 
  3.9   including, but not limited to, labels stating "For Export Only," 
  3.10  "U.S. Tax-Exempt," "For Use Outside U.S.," or similar wording; 
  3.11  or 
  3.12     (ii) does not comply with all requirements imposed by or 
  3.13  pursuant to federal law regarding warnings and other information 
  3.14  on packages of cigarettes manufactured, packaged, or imported 
  3.15  for sale, distribution, or use in the United States, including, 
  3.16  but not limited to, the precise warning labels specified in the 
  3.17  federal Cigarette Labeling and Advertising Act, United States 
  3.18  Code, title 15, section 1333; 
  3.19     (2) imported into the United States in violation of United 
  3.20  States Code, title 26, section 5754, or any other federal law or 
  3.21  regulation; or 
  3.22     (3) for which there has not been submitted to the secretary 
  3.23  of the United States Department of Health and Human Services the 
  3.24  list or lists of the ingredients added to tobacco in the 
  3.25  manufacture of the cigarettes required by the federal Cigarette 
  3.26  Labeling and Advertising Act, United States Code, title 15, 
  3.27  section 1335a. 
  3.28     (b) It is unlawful for any person to alter the package of 
  3.29  any cigarettes, prior to sale or distribution to the ultimate 
  3.30  consumer, so as to remove, conceal, or obscure: 
  3.31     (1) any statement, label, stamp, sticker, or notice 
  3.32  described in paragraph (a), clause (1), item (i); or 
  3.33     (2) any health warning that is not specified in, or does 
  3.34  not conform with the requirements of the federal Cigarette 
  3.35  Labeling and Advertising Act, United States Code, title 15, 
  3.36  section 1333. 
  4.1      (c) If cigarettes are sold or distributed under any trade 
  4.2   name, trade dress, or trademark that is the same as, or is 
  4.3   confusingly similar to, any trade name, trade dress, or 
  4.4   trademark used for other cigarettes previously sold or 
  4.5   distributed, it is unlawful for a wholesaler, as defined in 
  4.6   section 325D.32, subdivision 4, or a retailer, as defined in 
  4.7   section 325D.32, subdivision 5, to sell the cigarettes at a 
  4.8   price lower than the minimum price presently permitted under 
  4.9   sections 325D.30 to 325D.42 for the cigarettes which were 
  4.10  previously sold or distributed in this state.  For purposes of 
  4.11  this subdivision, "previously sold or distributed" means 
  4.12  cigarettes using a trade name, trade dress, or trademark that 
  4.13  were sold or distributed in this state before January 1, 1998.  
  4.14  No provision of sections 325D.30 to 325D.42 authorizes or 
  4.15  permits sales of cigarettes, subject to this paragraph, at 
  4.16  prices lower than the minimum prices under this paragraph.  The 
  4.17  commissioner of revenue is not responsible for enforcing this 
  4.18  paragraph.  None of the enforcement mechanisms or remedies under 
  4.19  sections 325D.30 to 325D.42 apply to violations of this 
  4.20  paragraph. 
  4.21     Subd. 2.  [PRIVATE CAUSE OF ACTION.] (a) In addition to any 
  4.22  other private remedy provided by law, any person that sustains 
  4.23  economic damages or commercial injury as a result of any 
  4.24  violation of subdivision 1 may bring an action for appropriate 
  4.25  injunctive or other equitable relief, actual damages, if any, 
  4.26  sustained by reason of the violation, and, as determined by the 
  4.27  court, interest on the damages from the date of the complaint, 
  4.28  taxable costs, and reasonable attorney fees.  
  4.29     (b) If the trier of fact finds that the violation is 
  4.30  egregious, it may increase the recovery to an amount not in 
  4.31  excess of three times the actual damages sustained by reason of 
  4.32  the violation.  The trier of fact may, in addition, award 
  4.33  exemplary damages for violations of subdivision 1, paragraph 
  4.34  (c), equal to the difference between the permitted legal price 
  4.35  and the actual price for the sales. 
  4.36     Subd. 3.  [APPLICABILITY.] This section does not apply to 
  5.1   cigarettes imported or reimported into the United States for 
  5.2   personal use and cigarettes sold or intended to be sold as 
  5.3   duty-free merchandise by a duty-free sales enterprise in 
  5.4   accordance with the provisions of United States Code, title 19, 
  5.5   section 1555(b), and any implementing regulations; unless the 
  5.6   cigarettes are brought back into the customs territory for 
  5.7   resale within the customs territory. 
  5.8      Subd. 4.  [VIOLATION.] A violation of this section is a 
  5.9   misdemeanor. 
  5.10     Sec. 3.  [EFFECTIVE DATE.] 
  5.11     This act is effective July 1, 2000.