HF 157

3rd Engrossment - 88th Legislature (2013 - 2014) Posted on 03/11/2013 03:54pm

A bill for an act
relating to commerce; regulating bullion coin dealers; requiring registration;
prohibiting certain conduct; providing enforcement authority and criminal
penalties; proposing coding for new law as Minnesota Statutes, chapter 80G.

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

Section 1.

new text begin [80G.01] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin For purposes of this chapter, the following terms have the
meanings given to them in this section.
new text end

new text begin Subd. 2. new text end

new text begin Bullion coin. new text end

new text begin "Bullion coin" means any coin containing more than one
percent by weight of silver, gold, platinum, or other precious metal.
new text end

new text begin Subd. 3. new text end

new text begin Bullion coin dealer. new text end

new text begin (a) Subject to the exceptions in paragraph (b), a
"bullion coin dealer" means any person who buys, sells, solicits, or markets bullion
coins or investments in bullion coins to consumers and is either incorporated, registered,
domiciled, or otherwise located in this state, or who does business with a consumer
domiciled, residing, or otherwise located in this state.
new text end

new text begin (b) A "bullion coin dealer" does not include any of the following persons:
new text end

new text begin (1) a person who engages only in wholesale bullion coin transactions with bullion
coin dealers who sell at retail and are properly registered under this chapter;
new text end

new text begin (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;
new text end

new text begin (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; or
new text end

new text begin (4) an auctioneer who auctions coins at auction on behalf of an owner, if the
auctioneer does not take title or ownership of the coins.
new text end

new text begin Subd. 4. new text end

new text begin Coin dealer representative. new text end

new text begin "Coin dealer representative" means any
natural person acting as an employee, contractor, or agent of a bullion coin dealer and who
has interactions with consumers in connection with the buying, selling, solicitation, or
marketing of bullion coins or investments in bullion coins.
new text end

new text begin Subd. 5. new text end

new text begin Commissioner. new text end

new text begin "Commissioner" means the commissioner of commerce.
new text end

new text begin Subd. 6. new text end

new text begin Owner. new text end

new text begin "Owner" means any person who has an ownership interest in a
bullion coin dealer, regardless of whether directly or indirectly, of more than one percent.
new text end

new text begin Subd. 7. new text end

new text begin Person. new text end

new text begin "Person" has the same meaning given in section 325F.68,
subdivision 3.
new text end

new text begin Subd. 8. new text end

new text begin Precious metal content. new text end

new text begin "Precious metal content" means the quantity,
measured in grams, of gold, silver, platinum, or other precious metal in a coin and the
percentage that the precious metal constitutes of the total weight of the coin.
new text end

Sec. 2.

new text begin [80G.02] REGISTRATION.
new text end

new text begin Subdivision 1. new text end

new text begin Registration required. new text end

new text begin Beginning July 1, 2014, it shall be unlawful
for a bullion coin dealer or coin dealer representative to solicit, market, buy, sell, or deliver
bullion coins or investments in bullion coins to a consumer without being registered by the
commissioner as provided for in this chapter, if the bullion coin dealer has engaged in a
bullion coin transaction or transactions with consumers during the 12-month period prior
to July 1, 2014, that exceed $5,000 in the aggregate, as determined by the transactions'
sale prices. If a bullion coin dealer was not required to be registered beginning on July 1,
2014, the bullion coin dealer must submit an application to register itself and each of its
coin dealer representatives within 30 days of reaching $5,000 in the aggregate of bullion
coin transactions with consumers in any 12-month period prior to July 1 of any calender
year, as determined by the transactions' sale prices. Once a bullion coin dealer is required
to register itself and its coin dealer representatives, the coin dealer must thereafter renew
its registration and the registration of each of its coin dealer representatives in accordance
with this chapter, regardless of the aggregate amount of transactions, unless the person
ceases to be a bullion coin dealer. A coin dealer representative may not buy, sell, solicit,
or market bullion coins or investments in bullion coins on behalf of a bullion coin dealer
unless the dealer is properly registered with the commissioner under this section.
new text end

new text begin Subd. 2. new text end

new text begin Registration obligations. new text end

new text begin If a bullion coin dealer must register itself and
each of its coin dealer representatives with the commissioner, the bullion coin dealer shall
certify in its application and the application for each of its coin dealer representatives that
the bullion coin dealer and its coin dealer representatives satisfy the requirements of
sections 80G.03 to 80G.07 Registrations issued or renewed by the commissioner under
this chapter shall expire on June 30 and must be renewed.
new text end

new text begin Subd. 3. new text end

new text begin Registration application and renewal. new text end

new text begin The application and renewal
forms shall include the following information, as applicable, which shall be considered by
the commissioner in determining whether to issue a registration and whether to thereafter
renew the registration:
new text end

new text begin (1) the name, assumed names, doing business as names, including caller
identification names, and business addresses of the bullion coin dealer, the name of
each owner and officer, and the name and primary work location of each coin dealer
representative. A bullion coin dealer who desires to carry on business in more than one
location shall identify each address where business is conducted;
new text end

new text begin (2) if a bullion coin dealer is doing business under any name other than the dealer's
legal name, documentation that the assumed name has been properly filed with the
secretary of state;
new text end

new text begin (3) the telephone numbers, including cellular phone numbers, electronic mail
addresses, and Web site domain names used or intended to be used by the bullion coin
dealer and its coin dealer representatives to buy, sell, solicit, market, or deliver to
consumers bullion coin or investments in bullion coin;
new text end

new text begin (4) the disclosure of all criminal convictions by any court within the last ten years
for the bullion coin dealer and each officer and owner of the bullion coin dealer and
for each of its coin dealer representatives;
new text end

new text begin (5) the certification that the bullion coin dealer, its officers and owners, and its coin
dealer representatives have not engaged in any conduct prohibited by this chapter since
its effective date, or in any conduct prohibited by sections 45.027; 325D.43 to 325D.48;
325F.67; 325F.68 to 325F.69; 325F.694; and 325F.73 to 325F.744;
new text end

new text begin (6) the disclosure of any civil judgments or government agency orders, including
but not limited to, conciliation court or equivalent judgments against the bullion coin
dealer, its officers and owners, or its coin dealer representatives for violation of consumer
protection laws or unfair trade practice laws or for failure to account to a customer for
money or property received from the consumer;
new text end

new text begin (7) the disclosure of any settlement or other agreement with any person or any
government entity resolving allegations by the person or government entity that the
bullion coin dealer, its officers and owners, or its coin dealer representatives violated
consumer protection or unfair trade practice laws, or for failure to account to a consumer
for money or property received from the consumer; and
new text end

new text begin (8) the certification that the bullion coin dealer, its officers and owners, and its coin
dealer representatives were not at any time permanently or temporarily prohibited by any
court of competent jurisdiction or ordered to cease and desist as the result of a government
agency action from engaging in buying, selling, soliciting, or marketing of bullion coin
or investments in bullion coin.
new text end

new text begin Subd. 4. new text end

new text begin Notice of change in registration information. new text end

new text begin A bullion coin 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 coin dealer representatives conduct business, ownership, electronic mail addresses,
Web site domain names, or telephone numbers used by it or its coin dealer representatives
to buy, sell, solicit, or market to consumers bullion coin or investments in bullion coin no
later than ten days after the change occurs.
new text end

new text begin Subd. 5. new text end

new text begin Registration fee. new text end

new text begin (a) The fee for each registration under this chapter
shall be as follows:
new text end

new text begin (1) bullion coin dealers, $25; and
new text end

new text begin (2) coin dealer representatives, $10.
new text end

new text begin (b) The commissioner, based on the cost of processing registrations, may adjust the
registration fee on an annual basis as needed.
new text end

Sec. 3.

new text begin [80G.03] REGISTRATION DENIAL, NONRENEWAL, REVOCATION
AND SUSPENSION.
new text end

new text begin Subdivision 1. new text end

new text begin Authority. new text end

new text begin The commissioner may, by order, suspend, revoke, or
refuse to issue or renew a bullion coin dealer or coin dealer representative registration for
any one or more of the following causes:
new text end

new text begin (1) providing incorrect, false, misleading, or incomplete information to the
commissioner or refusing to allow a reasonable inspection of information and documents
in the possession of the bullion coin dealer, coin dealer representative, or a third party or
to allow a reasonable inspection of premises;
new text end

new text begin (2) obtaining or attempting to obtain a registration through misrepresentation or fraud;
new text end

new text begin (3) having a bullion coin dealer or coin dealer representative registration or its
equivalent, including licensure under section 325F.73, denied, suspended, or revoked, or
having been the subject of a fine or any other discipline in any locality within the state or
other state, province, district, or territory;
new text end

new text begin (4) being permanently or temporarily enjoined by any court of competent jurisdiction
or being ordered to cease and desist by a government agency from engaging in or
continuing any conduct or practice involving the buying, selling, soliciting, or marketing
of bullion coins, investments in bullion coins, or precious metal to consumers;
new text end

new text begin (5) violating any federal, state, or local law or rule related to selling, purchasing,
solicitation, or marketing of bullion coin, investments in bullion coin, or precious metal;
new text end

new text begin (6) violating the provisions of this chapter or of sections 45.027; 325D.43 to
325D.48; 325F.67; 325F.68 to 325F.69; 325F.694; and 325F.73 to 325F.744, or federal
or state taxation or labor law; or
new text end

new text begin (7) violating a subpoena or order of the commissioner or a court issued pursuant
to this chapter or sections 45.027; 325D.43 to 325D.48; 325F.67; 325F.68 to 325F.69;
325F.694; 325F.70; and 325F.73 to 325F.744.
new text end

new text begin Subd. 2. new text end

new text begin Bullion coin dealer responsibility for actions of coin dealer
representatives. new text end

new text begin The commissioner may take action against a bullion coin dealer for any
violations of this chapter by its coin dealer representatives. The commissioner may also
take action against the coin dealer representative.
new text end

new text begin Subd. 3. new text end

new text begin Other authority of the commissioner. new text end

new text begin If a registration lapses, is
surrendered, withdrawn, terminated, or otherwise becomes ineffective, the commissioner
may institute a proceeding under this subdivision within two years after the registration
was last effective and enter a revocation order as of the last date on which the registration
was in effect, and impose a civil penalty as provided for in section 45.027, subdivision 6.
new text end

new text begin Subd. 4. new text end

new text begin Effect of revocation. new text end

new text begin A revocation of a registration prohibits the bullion
coin dealer or coin dealer representatives from making a new application for a registration
for at least two years from the effective date of the revocation.
new text end

Sec. 4.

new text begin [80G.04] CRIMINAL CONVICTIONS AND FALSE CERTIFICATIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Registration precluded. new text end

new text begin The commissioner must deny an
application for registration or renewal of a coin dealer representative or a bullion coin
dealer, or revoke such registration if the coin dealer representative, the bullion coin dealer,
or its owners or officers have:
new text end

new text begin (1) within the last ten years been convicted in any court of any financial crime or
other crime involving fraud, theft, dishonesty, or moral turpitude;
new text end

new text begin (2) been unable to truthfully certify that they have no civil judgments or government
agency orders, including but not limited to, conciliation court or equivalent judgments
against them for violation of consumer protection or unfair trade practices laws or failure
to account to a customer for money or property received from the customer; or
new text end

new text begin (3) been unable to truthfully certify that they have not entered into a settlement or
other agreement with any person or with any government entity resolving concerns by
the person or government entity that they had violated consumer protection or unfair
trade practices laws.
new text end

Sec. 5.

new text begin [80G.05] SCREENING.
new text end

new text begin Subdivision 1. new text end

new text begin Screening process required. new text end

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

new text begin Subd. 2. new text end

new text begin Initial screening. new text end

new text begin The screening process for initial registration must be
done no more than 60 days before the submission of an application for registration. The
process must include a national criminal history record search, a judgment search, and a
county criminal history search for all counties where the owner, officer, or coin dealer
representative has resided within the immediately preceding ten years. Each bullion coin
dealer shall use a vendor that is a member of the National Association of Professional
Background Screeners, or an equivalent vendor, to conduct the background screening
process on its owners, officers, and coin dealer representatives.
new text end

new text begin Subd. 3. new text end

new text begin Renewal screening. new text end

new text begin The screening process for the renewal of a
registration must include a national criminal history record search, a judgment search, and
county criminal history search for all counties where the owner, officer, or coin dealer
representative has resided since satisfactorily completing the last screening process
conducted pursuant to this section. Screening for renewal of the owner, officer, and coin
dealer representative registrations must take place no more than 60 days before the
submission of an application for renewal of a registration.
new text end

Sec. 6.

new text begin [80G.06] SURETY BOND.
new text end

new text begin Subdivision 1. new text end

new text begin Surety bond requirement. new text end

new text begin Every bullion coin dealer shall maintain a
current, valid surety bond issued by a surety company admitted to do business in Minnesota
in an amount no less than the transactions (purchases from and sales to consumers at retail)
during the 12-month period prior to registration, or renewal, whichever is applicable. In
no event shall the surety bond required under this subdivision be more than $200,000.
new text end

new text begin Subd. 2. new text end

new text begin Action on bond permitted. new text end

new text begin A consumer injured in money or property by a
bullion coin dealer's or coin dealer representative's failure to provide bullion coins 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 coins 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.
new text end

Sec. 7.

new text begin [80G.07] PROHIBITED CONDUCT.
new text end

new text begin Subdivision 1. new text end

new text begin Sales practices. new text end

new text begin No bullion coin dealer or coin dealer representative
shall:
new text end

new text begin (1) prior to a transaction regarding bullion coins, fail to provide to the consumer in
writing, in a clear and conspicuous manner, the sale or purchase price and the precious
metal content of the bullion coins involved in the transaction. The written notice shall
also include the bullion coin dealer's registration identification information issued by the
commissioner, and the Department of Commerce's e-mail address and telephone number.
A copy of the written notice shall be provided to the consumer and a copy retained by
the bullion coin dealer;
new text end

new text begin (2) fail to deliver bullion coins 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 coins;
new text end

new text begin (3) fail to pay a consumer for purchased bullion coins within the time agreed upon
with the consumer or, if no such agreement exists, within 30 days after the consumer
has provided the coins;
new text end

new text begin (4) fail to provide a written invoice at the time of the transaction specifically
identifying and describing the bullion coins involved in the transaction, the quantity of
bullion coins involved in the transaction, and the bullion coins' sale or purchase price and
precious metal content. The written invoice shall include the bullion coin dealer registration
identification information issued by the commissioner, and the Department of Commerce's
e-mail address and telephone number. A copy of the transaction documentation shall be
provided to the consumer and a copy retained by the bullion coin dealer;
new text end

new text begin (5) misrepresent the value of the bullion coins, the delivery date of bullion coins
or payment for bullion coins, or the dealer or representative's professional qualifications,
affiliations, or registration;
new text end

new text begin (6) misrepresent the manner in which any bullion coins a consumer provides will be
stored or otherwise handled once received;
new text end

new text begin (7) renegotiate the terms of a sale or purchase after receiving a consumer's payment
or bullion coins 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 coins returned;
new text end

new text begin (8) fail to respond within three business days to a consumer inquiry about the
delivery status of bullion coins that the consumer has paid for but not yet received or the
status of a payment for bullion coins that the consumer has already provided;
new text end

new text begin (9) telephone or solicit a consumer, or sell or provide the consumer's name to any
other bullion coin dealer or coin dealer representative after the consumer requests to
be contacted;
new text end

new text begin (10) violate a subpoena or order of the commissioner or a court;
new text end

new text begin (11) make any communication to a potential buyer or seller of bullion coins that
gives the impression that the bullion coin dealer or coin dealer representative is acting on
behalf of a government agency;
new text end

new text begin (12) improperly withhold, misappropriate, or convert any money or properties
received in the course of buying, selling, soliciting, or marketing bullion coins or
investments in bullion coins to consumers;
new text end

new text begin (13) misrepresent the terms of an actual or proposed purchase or sale of bullion coins
or investment in bullion coins to a consumer; or
new text end

new text begin (14) violate any other federal, state, or local law or rule related to selling, purchasing,
soliciting, or marketing of bullion coin, investments in bullion coin, 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.
new text end

new text begin Subd. 2. new text end

new text begin Application. new text end

new text begin From August 1, 2013, to June 30, 2014, this section shall
apply to any bullion coin dealer and its coin dealer representatives if the bullion coin
dealer is engaged in a bullion coin transaction or transactions with consumers which
exceed $5,000 in the aggregate, as determined by the transaction sale prices, during the
12-month period prior to August 1, 2013. On or after July 1, 2014, this section shall
apply to any bullion coin dealer and its coin dealer representatives which is or should be
registered in accordance with the provisions of this chapter.
new text end

Sec. 8.

new text begin [80G.08] CONSUMER FRAUD.
new text end

new text begin A violation of this chapter is a violation of section 325F.69, subdivision 1. The
provisions of section 8.31 apply to this chapter.
new text end

Sec. 9.

new text begin [80G.09] CRIMINAL VIOLATION.
new text end

new text begin A person who conducts business as a bullion coin dealer or as a coin dealer
representative without having first registered with the commissioner, or who carries on
such business after the revocation, suspension, or expiration of a registration, or who
violates section 80G.07, subdivision 1, clause (2) or (3), is guilty of a misdemeanor.
new text end

Sec. 10.

new text begin [80G.10] OTHER ACTION; LOCAL AUTHORITY.
new text end

new text begin Nothing in this chapter precludes an action under chapter 80A or preempts local
government authority under section 325F.742.
new text end

Sec. 11.

new text begin [80G.11] INVESTIGATIONS AND ENFORCEMENT.
new text end

new text begin In addition to authority granted under this chapter, the commissioner has all
the authority provided under section 45.027 to ensure compliance with this chapter,
including, but not limited to, the authority to issue an order to deny, suspend, or revoke
the registration of any bullion coin dealer or coin dealer representative, or impose civil
penalties for any violation of this chapter, section 45.027, or any other Minnesota law.
new text end

Sec. 12. new text begin EFFECTIVE DATE.
new text end

new text begin This act shall be effective August 1, 2013.
new text end