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HF 4030

1st Engrossment - 92nd Legislature (2021 - 2022) Posted on 05/22/2022 06:55pm

KEY: stricken = removed, old language.
underscored = added, new language.
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A bill for 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 anddeleted 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 statedeleted 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 transactionnew 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 consumersdeleted text end new text begin Minnesota transactionsnew 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 chapterdeleted 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.

Anew text begin registerednew 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 activitiesdeleted text end new text begin Minnesota transactionsnew 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 coindeleted text end new text begin productnew 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.

Eachnew text begin registerednew 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 thenew text begin Minnesotanew 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 $0deleted text end new text begin $25,000new 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 consumernew 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 Nodeleted text end new text begin When conducting a Minnesota transaction, anew text end dealer
or dealer representative deleted text begin shalldeleted text end new text begin must notnew 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.

Anew text begin registerednew 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.