1.1 	A bill for an act
1.2 	relating to health; regulating certain sales and
1.3 	deliveries of tobacco products; imposing criminal and
1.4 	civil penalties; providing remedies; amending
1.5 	Minnesota Statutes 2004, section 297F.21, subdivision
1.6 	1; proposing coding for new law in Minnesota Statutes,
1.7 	chapter 325F.
1.8 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.9 	Section 1. Minnesota Statutes 2004, section 297F.21,
1.10 	subdivision 1, is amended to read:
1.11 		Subdivision 1.Contraband defined.  The following are
1.12 	declared to be contraband and therefore subject to civil and
1.13 	criminal penalties under this chapter:
1.14 	(a) Cigarette packages which do not have stamps affixed to
1.15 	them as provided in this chapter, including but not limited to
1.16 	(i) packages with illegible stamps and packages with stamps that
1.17 	are not complete or whole even if the stamps are legible, and
1.18 	(ii) all devices for the vending of cigarettes in which packages
1.19 	as defined in item (i) are found, including all contents
1.20 	contained within the devices.
1.21 	(b) A device for the vending of cigarettes and all packages
1.22 	of cigarettes, where the device does not afford at least partial
1.23 	visibility of contents.  Where any package exposed to view does
1.24 	not carry the stamp required by this chapter, it shall be
1.25 	presumed that all packages contained in the device are unstamped
1.26 	and contraband.
2.1 	(c) A device for the vending of cigarettes to which the
2.2 	commissioner or authorized agents have been denied access for
2.3 	the inspection of contents.  In lieu of seizure, the
2.4 	commissioner or an agent may seal the device to prevent its use
2.5 	until inspection of contents is permitted.
2.6 	(d) A device for the vending of cigarettes which does not
2.7 	carry the name and address of the owner, plainly marked and
2.8 	visible from the front of the machine.
2.9 	(e) A device including, but not limited to, motor vehicles,
2.10 	trailers, snowmobiles, airplanes, and boats used with the
2.11 	knowledge of the owner or of a person operating with the consent
2.12 	of the owner for the storage or transportation of more than
2.13 	5,000 cigarettes which are contraband under this subdivision.
2.14 	When cigarettes are being transported in the course of
2.15 	interstate commerce, or are in movement from either a public
2.16 	warehouse to a distributor upon orders from a manufacturer or
2.17 	distributor, or from one distributor to another, the cigarettes
2.18 	are not contraband, notwithstanding the provisions of clause (a).
2.19 	(f) A device including, but not limited to, motor vehicles,
2.20 	trailers, snowmobiles, airplanes, and boats used with the
2.21 	knowledge of the owner, or of a person operating with the
2.22 	consent of the owner, for the storage or transportation of
2.23 	untaxed tobacco products intended for sale in Minnesota other
2.24 	than those in the possession of a licensed distributor on or
2.25 	before the due date for payment of the tax under section
2.26 	297F.09, subdivision 2.
2.27 	(g) Cigarette packages or tobacco products obtained from an
2.28 	unlicensed seller.
2.29 	(h) Cigarette packages offered for sale or held as
2.30 	inventory in violation of section 297F.20, subdivision 7.
2.31 	(i) Tobacco products on which the tax has not been paid by
2.32 	a licensed distributor.
2.33 	(j) Any cigarette packages or tobacco products offered for
2.34 	sale or held as inventory for which there is not an invoice from
2.35 	a licensed seller as required under section 297F.13, subdivision
2.36 	4.
3.1 	(k) Cigarette packages which have been imported into the
3.2 	United States in violation of United States Code, title 26,
3.3 	section 5754.  All cigarettes held in violation of that section
3.4 	shall be presumed to have entered the United States after
3.5 	December 31, 1999, in the absence of proof to the contrary.
3.6 	(l) Cigarettes and tobacco products sold or attempted to be
3.7 	sold in violation of section 325F.781.

3.8 	Sec. 2. [325F.781] REQUIREMENTS OF TOBACCO PRODUCT
3.9 	DELIVERY SALES.
3.10 		Subdivision 1.Scope of definitions. The terms in this
3.11 	section have the meanings given unless the context clearly
3.12 	indicates otherwise.
3.13 		Subd. 2.Consumer. "Consumer" means an individual who
3.14 	purchases, receives, or possesses tobacco products for personal
3.15 	consumption and not for resale.
3.16 		Subd. 3.Delivery sale. "Delivery sale" means a sale of
3.17 	tobacco products to a consumer in this state when:
3.18 	(1) the purchaser submits the order for the sale by means
3.19 	of a telephonic or other method of voice transmission, the mail
3.20 	or any other delivery service, or the Internet or other online
3.21 	service, regardless of whether the seller is located inside or
3.22 	outside of the state; or 
3.23 	(2) the tobacco products are delivered by use of the mail
3.24 	or other delivery service.
3.25 	For purposes of this subdivision, a sale of tobacco
3.26 	products to an individual in this state must be treated as a
3.27 	sale to a consumer, unless the individual is licensed as a
3.28 	distributor or retailer of tobacco products.
3.29 		Subd. 4.Distributor. "Distributor" means a person,
3.30 	whether located inside or outside of this state, other than a
3.31 	retailer, who sells or distributes tobacco products in the
3.32 	state.  Distributor does not include a tobacco products
3.33 	manufacturer, export warehouse proprietor, or importer with a
3.34 	valid permit under United States Code, title 26, section 5712,
3.35 	if the person sells or distributes tobacco products in this
3.36 	state only to distributors who hold valid and current licenses
4.1 	under the laws of a state, or to an export warehouse proprietor
4.2 	or another manufacturer.  Distributor does not include a common
4.3 	or contract carrier that is transporting tobacco products under
4.4 	a proper bill of lading or freight bill that states the
4.5 	quantity, source, and destination of tobacco products, or a
4.6 	person who ships tobacco products through this state by common
4.7 	or contract carrier under a bill of lading or freight bill.
4.8 		Subd. 5.Retailer. "Retailer" means a person, whether
4.9 	located inside or outside of Minnesota, who sells or distributes
4.10 	tobacco products to a consumer in Minnesota.
4.11 		Subd. 6.Tobacco products. "Tobacco products" means:
4.12 	(1) cigarettes, as defined in section 297F.01, subdivision
4.13 	3; and 
4.14 	(2) smokeless tobacco as defined in section 325F.76.
4.15 		Subd. 7.Requirements for accepting order for delivery
4.16 	sale. (a) This subdivision applies to acceptance of an order
4.17 	for a delivery sale of tobacco products.
4.18 	(b) When accepting the first order from a consumer for a
4.19 	delivery sale, the retailer shall obtain the following
4.20 	information from the person placing the order:
4.21 	(1) a copy of a valid government-issued document that
4.22 	provides the person's name, current address, photograph, and
4.23 	date of birth; and 
4.24 	(2) an original written statement signed by the person
4.25 	documenting that the person:
4.26 	(i) is of legal age to purchase tobacco products in the
4.27 	state;
4.28 	(ii) has made a choice whether to receive mailings from a
4.29 	tobacco retailer;
4.30 	(iii) understands that providing false information may be a
4.31 	violation of law; and 
4.32 	(iv) understands that it is a violation of law to purchase
4.33 	tobacco products for subsequent resale or for delivery to
4.34 	persons who are under the legal age to purchase tobacco products.
4.35 	(c) If an order is made as a result of advertisement over
4.36 	the Internet, the retailer shall request the e-mail address of
5.1 	the purchaser and shall receive payment by credit card or check
5.2 	prior to shipping.
5.3 	(d) Before shipping the tobacco products, the retailer
5.4 	shall verify the information provided under paragraph (b)
5.5 	against a commercially available database.  Any such database or
5.6 	databases may also include age and identity information from
5.7 	other government or validated commercial sources, if that
5.8 	additional information is regularly used by government and
5.9 	businesses for the purpose of identity verification and
5.10 	authentication, and if the additional information is used only
5.11 	to supplement and not to replace the government-issued
5.12 	identification data in the age and identity verification process.
5.13 		Subd. 8.Requirements for shipping a delivery sale. (a)
5.14 	This subdivision applies to a retailer shipping tobacco products
5.15 	as the result of a delivery sale.
5.16 	(b) The retailer shall clearly mark the outside of the
5.17 	package of tobacco products to be shipped "tobacco products -
5.18 	adult signature required" and show the name of the retailer.
5.19 	(c) The retailer shall use a delivery service that imposes
5.20 	the following requirements:
5.21 	(1) an adult must sign for the delivery; and 
5.22 	(2) the person signing for the delivery must show valid
5.23 	government-issued identification that contains a photograph of
5.24 	the person and indicates that the person is of legal age to
5.25 	purchase tobacco products and resides at the delivery address.
5.26 	(d) The retailer must provide delivery instructions that
5.27 	clearly indicate the requirements of this subdivision and that
5.28 	Minnesota law requires compliance.
5.29 	(e) No criminal penalty may be imposed on a person for a
5.30 	violation of this section other than a violation described in
5.31 	paragraph (f) or (g).  If it appears to the commissioner of
5.32 	revenue that any person has engaged in any act or practice
5.33 	constituting a violation of this section, and the violation is
5.34 	not within two years of any previous violation of this section,
5.35 	the commissioner shall issue and cause to be served upon the
5.36 	person an order requiring the person to cease and desist from
6.1 	violating this section.  The order must give reasonable notice
6.2 	of the rights of the person to request a hearing and must state
6.3 	the reason for the entry of the order.  Unless otherwise agreed
6.4 	between the parties, a hearing must be held not later than seven
6.5 	days after the request for the hearing is received by the
6.6 	commissioner, after which and within 20 days after the receipt
6.7 	of the administrative law judge's report and subsequent
6.8 	exceptions and argument the commissioner shall issue an order
6.9 	vacating the cease and desist order, modifying it, or making it
6.10 	permanent as the facts require.  If no hearing is requested
6.11 	within 30 days of the service of the order, the order becomes
6.12 	final and remains in effect until modified or vacated by the
6.13 	commissioner.  All hearings must be conducted according to
6.14 	chapter 14.  If the person to whom a cease and desist order is
6.15 	issued fails to appear at the hearing after being duly notified,
6.16 	the person shall be deemed in default and the proceeding may be
6.17 	determined against the person upon consideration of the cease
6.18 	and desist order, the allegations of which may be deemed to be
6.19 	true.
6.20 	(f) Any person who violates this section within two years
6.21 	of a violation for which a cease and desist order was issued
6.22 	under paragraph (e) is guilty of a misdemeanor.
6.23 	(g) Any person who commits a third or subsequent violation
6.24 	of this section, including a violation for which a cease and
6.25 	desist order was issued under paragraph (c), within any
6.26 	subsequent two-year period is guilty of a gross misdemeanor.
6.27 		Subd. 9.Common carriers. This section does not impose
6.28 	liability upon any common carrier, or officers or employees of
6.29 	the common carrier, when acting within the scope of business of
6.30 	the common carrier.
6.31 		Subd. 10.Registration requirement. Before making
6.32 	delivery sales or shipping tobacco products in connection with
6.33 	any sales, a distributor shall file with the Department of
6.34 	Revenue a statement setting forth the distributor's name, trade
6.35 	name, and the address of the distributor's principal place of
6.36 	business and any other place of business.
7.1 		Subd. 11.Collection of taxes. (a) Before shipping any
7.2 	tobacco products to a purchaser in Minnesota, a retailer shall
7.3 	comply with chapter 297F and shall ensure that all state excise
7.4 	taxes that apply are collected and paid to the state and that
7.5 	all related state excise tax stamps or other indicators of state
7.6 	excise tax payment are properly affixed to those tobacco
7.7 	products.
7.8 	(b) In addition to any penalties under chapter 297F, a
7.9 	retailer who fails to pay any tax due according to paragraph (a)
7.10 	shall pay, in addition to any other penalty, a penalty of 50
7.11 	percent of the tax due but unpaid.
7.12 		Subd. 12.Application of state laws. All state laws that
7.13 	apply to in-state tobacco product retailers shall apply to
7.14 	delivery sellers that sell in Minnesota.
7.15 		Subd. 13.Forfeiture. Any tobacco products sold or
7.16 	attempted to be sold in a delivery sale that does not meet the
7.17 	requirements of this section are deemed to be contraband and are
7.18 	subject to forfeiture under section 297F.21.
7.19 		Subd. 14.Enforcement. The remedies of section 8.31
7.20 	apply to violations of this section.