SF 1260

1st Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to health; regulating certain sales and
deliveries of tobacco products; imposing criminal and
civil penalties; providing remedies; amending
Minnesota Statutes 2004, section 297F.21, subdivision
1; proposing coding for new law in Minnesota Statutes,
chapter 325F.

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

Section 1.

Minnesota Statutes 2004, section 297F.21,
subdivision 1, is amended to read:

Subdivision 1.

Contraband defined.

The following are
declared to be contraband and therefore subject to civil and
criminal penalties under this chapter:

(a) Cigarette packages which do not have stamps affixed to
them as provided in this chapter, including but not limited to
(i) packages with illegible stamps and packages with stamps that
are not complete or whole even if the stamps are legible, and
(ii) all devices for the vending of cigarettes in which packages
as defined in item (i) are found, including all contents
contained within the devices.

(b) A device for the vending of cigarettes and all packages
of cigarettes, where the device does not afford at least partial
visibility of contents. Where any package exposed to view does
not carry the stamp required by this chapter, it shall be
presumed that all packages contained in the device are unstamped
and contraband.

(c) A device for the vending of cigarettes to which the
commissioner or authorized agents have been denied access for
the inspection of contents. In lieu of seizure, the
commissioner or an agent may seal the device to prevent its use
until inspection of contents is permitted.

(d) A device for the vending of cigarettes which does not
carry the name and address of the owner, plainly marked and
visible from the front of the machine.

(e) A device including, but not limited to, motor vehicles,
trailers, snowmobiles, airplanes, and boats used with the
knowledge of the owner or of a person operating with the consent
of the owner for the storage or transportation of more than
5,000 cigarettes which are contraband under this subdivision.
When cigarettes are being transported in the course of
interstate commerce, or are in movement from either a public
warehouse to a distributor upon orders from a manufacturer or
distributor, or from one distributor to another, the cigarettes
are not contraband, notwithstanding the provisions of clause (a).

(f) A device including, but not limited to, motor vehicles,
trailers, snowmobiles, airplanes, and boats used with the
knowledge of the owner, or of a person operating with the
consent of the owner, for the storage or transportation of
untaxed tobacco products intended for sale in Minnesota other
than those in the possession of a licensed distributor on or
before the due date for payment of the tax under section
297F.09, subdivision 2.

(g) Cigarette packages or tobacco products obtained from an
unlicensed seller.

(h) Cigarette packages offered for sale or held as
inventory in violation of section 297F.20, subdivision 7.

(i) Tobacco products on which the tax has not been paid by
a licensed distributor.

(j) Any cigarette packages or tobacco products offered for
sale or held as inventory for which there is not an invoice from
a licensed seller as required under section 297F.13, subdivision
4.

(k) Cigarette packages which have been imported into the
United States in violation of United States Code, title 26,
section 5754. All cigarettes held in violation of that section
shall be presumed to have entered the United States after
December 31, 1999, in the absence of proof to the contrary.

new text begin (l) Cigarettes and tobacco products sold or attempted to be
sold in violation of section 325F.781.
new text end

Sec. 2.

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

new text begin Subdivision 1. new text end

new text begin Scope of definitions. new text end

new text begin The terms in this
section have the meanings given unless the context clearly
indicates otherwise.
new text end

new text begin Subd. 2. new text end

new text begin Consumer. new text end

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

new text begin Subd. 3. new text end

new text begin Delivery sale. new text end

new text begin "Delivery sale" means a sale of
tobacco products to a consumer in this state when:
new text end

new text begin (1) 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 online
service, regardless of whether the seller is located inside or
outside of the state; or
new text end

new text begin (2) the tobacco products are delivered by use of the mail
or other delivery service.
new text end

new text begin For purposes of this subdivision, 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 Subd. 4. new text end

new text begin Distributor. new text end

new text begin "Distributor" means a person,
whether located inside or outside of 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,
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 Subd. 5. new text end

new text begin Retailer. new text end

new text begin "Retailer" means a person, whether
located inside or outside of Minnesota, who sells or distributes
tobacco products to a consumer in Minnesota.
new text end

new text begin Subd. 6. new text end

new text begin Tobacco products. new text end

new text begin "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. 7. 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 from a consumer for a
delivery sale, the 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 retailer shall request the e-mail address of
the purchaser and shall receive payment by credit card or check
prior to shipping.
new text end

new text begin (d) Before shipping the tobacco products, the 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. 8. new text end

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

new text begin (a)
This subdivision applies to a retailer shipping tobacco products
as the result of a delivery sale.
new text end

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

new text begin (c) The 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 and indicates that the person 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 that
Minnesota law requires compliance.
new text end

new text begin (e) No criminal penalty may be imposed on a person for a
violation of this section other than a violation described in
paragraph (f) or (g). If it appears to the commissioner of
revenue that any person has engaged in any act or practice
constituting a violation of this section, and the violation is
not within two years of any previous violation of this section,
the commissioner shall issue and cause to be served upon the
person an order requiring the person to cease and desist from
violating this section. The order must give reasonable notice
of the rights of the person to request a hearing and must state
the reason for the entry of the order. Unless otherwise agreed
between the parties, a hearing must be held not later than seven
days after the request for the hearing is received by the
commissioner, after which and within 20 days after the receipt
of the administrative law judge's report and subsequent
exceptions and argument the commissioner shall issue an order
vacating the cease and desist order, modifying it, or making it
permanent as the facts require. If no hearing is requested
within 30 days of the service of the order, the order becomes
final and remains in effect until modified or vacated by the
commissioner. All hearings must be conducted according to
chapter 14. If the person to whom a cease and desist order is
issued fails to appear at the hearing after being duly notified,
the person shall be deemed in default and the proceeding may be
determined against the person upon consideration of the cease
and desist order, the allegations of which may be deemed to be
true.
new text end

new text begin (f) Any person who violates this section within two years
of a violation for which a cease and desist order was issued
under paragraph (e) is guilty of a misdemeanor.
new text end

new text begin (g) Any person who commits a third or subsequent violation
of this section, including a violation for which a cease and
desist order was issued under paragraph (c), within any
subsequent two-year period is guilty of a gross misdemeanor.
new text end

new text begin Subd. 9. new text end

new text begin Common carriers. new text end

new text begin This section does not impose
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. 10. 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, a distributor shall file with the Department of
Revenue a statement setting forth the distributor's name, trade
name, and the address of the distributor's principal place of
business and any other place of business.
new text end

new text begin Subd. 11. 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 Minnesota, a retailer shall
comply with chapter 297F and shall ensure that all state excise
taxes that apply are collected and paid to the state and that
all related state excise tax stamps or other indicators of state
excise tax payment are properly affixed to those tobacco
products.
new text end

new text begin (b) In addition to any penalties under chapter 297F, a
retailer 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. 12. 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 shall apply to
delivery sellers that sell in Minnesota.
new text end

new text begin Subd. 13. new text end

new text begin Forfeiture. new text end

new text begin Any tobacco products sold or
attempted to be sold in a delivery sale that does not meet the
requirements of this section are deemed to be contraband and are
subject to forfeiture under section 297F.21.
new text end

new text begin Subd. 14. new text end

new text begin Enforcement. new text end

new text begin The remedies of section 8.31
apply to violations of this section.
new text end