HF 1338

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to commerce; regulating tobacco products
delivery sales; providing enforcement; amending
Minnesota Statutes 2004, sections 297F.01, by adding a
subdivision; 297F.09, by adding a subdivision;
proposing coding for new law in Minnesota Statutes,
chapters 297F; 325F.

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

Section 1.

Minnesota Statutes 2004, section 297F.01, is
amended by adding a subdivision to read:

new text begin Subd. 10a. new text end

new text begin Out-of-state retailer. new text end

new text begin "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
consumers located in this state.
new text end

Sec. 2.

new text begin [297F.031] REGISTRATION REQUIREMENT.
new text end

new text begin Prior to making delivery sales or shipping cigarettes or
tobacco products in connection with any sales, an out-of-state
retailer shall file with the Department of Revenue a statement
setting forth the out-of-state retailer's name and trade name,
and the address of the out-of-state retailer's principal place
of business and any other place of business.
new text end

Sec. 3.

Minnesota Statutes 2004, section 297F.09, is
amended by adding a subdivision to read:

new text begin Subd. 4a. new text end

new text begin Reporting requirements. new text end

new text begin 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 in a
delivery sale in the previous calendar month shall file with the
Department of Revenue reports in the form and in the manner
prescribed by the commissioner of revenue that provides for each
delivery sale, 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.
new text end

Sec. 4.

new text begin [325F.781] REQUIREMENTS; TOBACCO PRODUCT DELIVERY
SALES.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this
section, the terms in paragraphs (b) through (g) have the
meanings given, unless the language or context clearly provides
otherwise.
new text end

new text begin (b) "Consumer" means an individual who purchases, receives,
or possesses tobacco products for personal consumption and not
for resale.
new text end

new text begin (c)(1) "Delivery sale" means:
new text end

new text begin (i) a sale of tobacco products to a consumer in this state
when:
new text end

new text begin (A) the purchaser submits the order for the sale by means
of a telephonic or other method of voice transmission, the mail
or any other delivery service, or the Internet or other on-line
service; or
new text end

new text begin (B) the tobacco products are delivered by use of the mail
or other delivery service; or
new text end

new text begin (ii) a sale of tobacco products that satisfies the criteria
in clause (1), item (i), regardless of whether the seller is
located inside or outside the state.
new text end

new text begin (2) A sale of tobacco products to an individual in this
state must be treated as a sale to a consumer, unless the
individual is licensed as a distributor or retailer of tobacco
products.
new text end

new text begin (d) "Delivery service" means a person, including the United
States Postal Service, that is engaged in the commercial
delivery of letters, packages, or other containers.
new text end

new text begin (e) "Distributor" means a person, whether located inside or
outside this state, other than a retailer, who sells or
distributes tobacco products in the state. 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 bill of lading or freight bill.
new text end

new text begin (f) "Retailer" means a person, whether located inside or
outside this state, who sells or distributes tobacco products to
a consumer in this state.
new text end

new text begin (g) "Tobacco products" means:
new text end

new text begin (1) cigarettes, as defined in section 297F.01, subdivision
3; and
new text end

new text begin (2) smokeless tobacco as defined in section 325F.76.
new text end

new text begin Subd. 2. new text end

new text begin Requirements for accepting order for delivery
sale. new text end

new text begin (a) This subdivision applies to acceptance of an order
for a delivery sale of tobacco products.
new text end

new text begin (b) When accepting the first order for a delivery sale from
a consumer, the tobacco retailer shall obtain the following
information from the person placing the order:
new text end

new text begin (1) a copy of a valid government-issued document that
provides the person's name, current address, photograph, and
date of birth; and
new text end

new text begin (2) an original written statement signed by the person
documenting that the person:
new text end

new text begin (i) is of legal age to purchase tobacco products in the
state;
new text end

new text begin (ii) has made a choice whether to receive mailings from a
tobacco retailer;
new text end

new text begin (iii) understands that providing false information may be a
violation of law; and
new text end

new text begin (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.
new text end

new text begin (c) If an order is made as a result of advertisement over
the Internet, the tobacco retailer shall request the e-mail
address of the purchaser and shall receive payment by credit
card or check before shipping the order.
new text end

new text begin (d) Before shipping the tobacco products, the tobacco
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 end

new text begin Subd. 3. new text end

new text begin Requirements for shipping a delivery sale. new text end

new text begin (a)
This subdivision applies to a tobacco retailer shipping tobacco
products pursuant to a delivery sale.
new text end

new text begin (b) The tobacco retailer shall clearly mark the outside of
the package of tobacco products to be shipped "tobacco products -
adult signature required" and to show the name of the tobacco
retailer.
new text end

new text begin (c) The tobacco retailer shall use a delivery service that
imposes the following requirements:
new text end

new text begin (1) an adult must sign for the delivery; and
new text end

new text begin (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.
new text end

new text begin (d) The retailer must provide delivery instructions that
clearly indicate the requirements of this subdivision and must
declare that state law requires compliance with the requirements.
new text end

new text begin Subd. 4. new text end

new text begin Common carriers. new text end

new text begin 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 scope of business of the common carrier.
new text end

new text begin Subd. 5. new text end

new text begin Registration requirement. new text end

new text begin Before 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.
new text end

new text begin Subd. 6. new text end

new text begin Collection of taxes. new text end

new text begin (a) Before 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.
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) shall pay, in addition to any other penalty, a penalty of 50
percent of the tax due but unpaid.
new text end

new text begin Subd. 7. new text end

new text begin Application of state laws. new text end

new text begin All state laws that
apply to in-state tobacco product retailers apply to Internet
and mail-order sellers that sell into this state.
new text end

new text begin Subd. 8. new text end

new text begin Forfeiture. new text end

new text begin Any tobacco product sold or
attempted to be sold 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.
new text end

new text begin Subd. 9. new text end

new text begin Civil penalties. new text end

new text begin (a) A tobacco retailer or
distributor who violates this section or rules adopted under
this section is subject to the following fines:
new text end

new text begin (1) for the first violation, a fine of not more than
$1,000; and
new text end

new text begin (2) for the second and any subsequent violation, a fine of
not more than $5,000.
new text end

new text begin (b) A person who submits ordering information under
subdivision 2, paragraph (b), in another person's name is
subject to a fine of not more than $1,000.
new text end

new text begin Subd. 10. new text end

new text begin Enforcement. new text end

new text begin The attorney general may bring an
action to enforce this section 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.
new text end