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Key: (1) language to be deleted (2) new language

CHAPTER 120--H.F.No. 157
An act
relating to commerce; regulating bullion coin dealers; requiring
registration; prohibiting certain conduct; providing enforcement authority and
civil 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. [80G.01] DEFINITIONS.
    Subdivision 1. Scope. For purposes of this chapter, the following terms have the
meanings given to them in this section.
    Subd. 2. Bullion coin. "Bullion coin" means any coin containing more than one
percent by weight of silver, gold, platinum, or other precious metal.
    Subd. 3. Bullion coin dealer. (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.
(b) A bullion coin dealer does not include any of the following persons:
(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;
(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 coins at auction on behalf of an owner, if the
auctioneer does not take title or ownership of the coins, or the operator of an Internet Web
site that allows users to offer the sale of coins through that Web site, does not set the price,
is not the seller of record, and does not take possession of any coins to be offered;
(5) a person who engages only in transactions at occasional trade shows 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.
    Subd. 4. Coin dealer representative. "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 for the purpose of the buying, selling, solicitation, or
marketing of bullion coins or investments in bullion coins.
    Subd. 5. Commissioner. "Commissioner" means the commissioner of commerce.
    Subd. 6. Owner. "Owner" means any person who has an ownership interest in a
bullion coin dealer, regardless of whether directly or indirectly, of more than ten percent
and who is actively engaged in the direction, management, oversight, or operation of the
bullion coin dealer or its business affairs.
    Subd. 7. Person. "Person" has the same meaning given in section 325F.68,
subdivision 3.
    Subd. 8. Precious metal content. "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.

    Sec. 2. [80G.02] REGISTRATION.
    Subdivision 1. Registration required. 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 calendar
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.
    Subd. 2. Registration obligations. Registrations issued or renewed by the
commissioner under this chapter shall expire on June 30 and must be renewed.
    Subd. 3. Registration application and renewal. 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:
(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;
(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;
(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;
(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;
(5) the disclosure of any civil judgments in favor of a government entity or
government entity orders entered, filed, or issued against the bullion coin dealer, its
officers and owners, or its coin dealer representatives within the last ten years for violation
of consumer protection laws or unfair trade practice laws or for failure to account to a
consumer for money or property received from the consumer;
(6) the disclosure of any settlement or other agreement with any government entity
within the last ten years resolving concerns 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
(7) the disclosure of any instance in which the bullion coin dealer, its officers and
owners, and its coin dealer representatives were 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. A bullion coin dealer may rely on
the screening process provided for in section 80G.05 and the statements of its coin dealer
representatives for the purposes of complying with the disclosure requirements of this
clause relating to coin dealer representatives, provided that such reliance is reasonable, in
good faith, and the bullion coin dealer has no knowledge of information suggesting that
the screening results or statement are inaccurate.
    Subd. 4. Notice of change in registration information. 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, owners, 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.

    Sec. 3. [80G.03] REGISTRATION DENIAL, NONRENEWAL, REVOCATION,
AND SUSPENSION.
    Subdivision 1. Authority. 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:
(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;
(2) obtaining or attempting to obtain a registration through misrepresentation or fraud;
(3) having a bullion coin dealer or coin dealer representative registration or its
equivalent, including licensure under section 325F.73, denied, suspended, or revoked by
any locality within the state or other state, province, district, or territory;
(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;
(5) 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
(6) 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.
    Subd. 2. Bullion coin dealer responsibility for actions of coin dealer
representatives. The commissioner may take action against a bullion coin dealer for
any violations of this chapter by its coin dealer representatives conducting activities on
behalf of or at the direction of the bullion coin dealer. The commissioner may also take
action against the coin dealer representative.
    Subd. 3. Other authority of the commissioner. 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.
    Subd. 4. Effect of revocation. 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.

    Sec. 4. [80G.04] CRIMINAL CONVICTIONS.
    Subdivision 1. Bullion coin dealer registration precluded. The commissioner
must deny an application for registration or renewal of a bullion coin dealer, or revoke such
registration, if the bullion coin 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.
    Subd. 2. Coin dealer representative registration precluded. The commissioner
must deny an application for registration or renewal of a coin dealer representative, or
revoke such registration, if the coin dealer representative has within the last ten years been
convicted in any court of any financial crime or other crime involving fraud or theft.

    Sec. 5. [80G.05] SCREENING.
    Subdivision 1. Screening process required. 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.
    Subd. 2. Initial screening. 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 reputable, reliable, and accurate vendor authorized to do business
in Minnesota to conduct the background screening process on its owners, officers, and
coin dealer representatives.
    Subd. 3. Renewal screening. 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.

    Sec. 6. [80G.06] SURETY BOND.
    Subdivision 1. Surety bond requirement. 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 based on the transactions (purchases from and sales to consumers at retail)
during the 12-month period prior to registration, or renewal, whichever is applicable.
The amount of the surety bond shall be as specified in the table below:


Transaction Amount in Preceding 12-month
Period
Surety Bond Required

$0 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
    Subd. 2. Action on bond permitted. 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.

    Sec. 7. [80G.07] PROHIBITED CONDUCT.
    Subdivision 1. Sales practices. No bullion coin dealer or coin dealer representative
shall:
(1) prior to a transaction regarding bullion coins, or concurrent with the delivery
thereof, 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;
(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;
(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;
(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;
(5) misrepresent the delivery date of bullion coins or payment for bullion coins, or
the dealer or representative's professional qualifications, affiliations, or registration;
(6) misrepresent any material aspect of a bullion coin, including its performance,
efficacy, nature, investment value, central characteristics, liquidity, earnings potential,
or profitability;
(7) misrepresent the manner in which any bullion coins 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 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;
(9) 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;
(10) 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
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 coins that
misrepresents the relationship, if any, between the bullion coin dealer or coin 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 coins or
investments in bullion coins to consumers;
(14) misrepresent the terms of an actual or proposed purchase or sale of bullion coins
or investment in bullion coins to a consumer; or
(15) 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.
    Subd. 2. Application. 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.

    Sec. 8. [80G.08] CRIMINAL VIOLATION.
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.

    Sec. 9. [80G.09] OTHER ACTION; LOCAL AUTHORITY.
Nothing in this chapter precludes an action under chapter 80A or preempts local
government authority under section 325F.742.

    Sec. 10. [80G.10] INVESTIGATIONS AND CIVIL ENFORCEMENT.
    Subdivision 1. Civil action instituted by commissioner. If the commissioner
believes that a person has engaged, is engaging, or is about to engage in an act, practice,
or course of business constituting a violation of this chapter or a rule adopted or order
issued under this chapter or that a person has, is, or is about to engage in an act, practice,
or course of business that materially aids a violation of this chapter or a rule adopted or
order issued under this chapter, the commissioner may maintain an action in the district
court to enjoin the act, practice, or course of business and to enforce compliance with this
chapter or a rule adopted or order issued under this chapter.
    Subd. 2. Relief available. In an action under this section and on a proper showing,
the court may:
(1) issue a permanent or temporary injunction, restraining order, or declaratory
judgment;
(2) order other appropriate or ancillary relief, which may include:
(i) an asset freeze, accounting, writ of attachment, writ of general or specific
execution, and appointment of a receiver or conservator, that may be the commissioner,
for the defendant or the defendant's assets;
(ii) ordering the commissioner to take charge and control of a defendant's property,
including investment accounts and accounts in a depository institution, rents, and profits;
to collect debts; and to acquire and dispose of property;
(iii) imposing a civil penalty up to $10,000 for each violation; an order of rescission,
restitution, or disgorgement directed to a person that has engaged in an act, practice, or
course of business constituting a violation of this chapter or a rule adopted or order issued
under this chapter or the predecessor act; and
(iv) ordering the payment of prejudgment and postjudgment interest; or
(3) order such other relief as the court considers appropriate.
    Subd. 3. No bond required. The commissioner may not be required to post a bond
in an action or proceeding under this chapter.
    Subd. 4. Commissioner authority. (a) If the commissioner determines that a
person has engaged, is engaged, or is about to engage in an act, practice, or course of
conduct constituting a violation of this chapter or a rule adopted or order issued under this
chapter or that a person has materially aided, is materially aiding, or is about to materially
aid an act, practice, or course of conduct constituting a violation of this chapter or rule
adopted or order issued under this chapter the commissioner may:
(1) issue an order directing the person to cease and desist from engaging in the
act, practice, or conduct or to take other action necessary or appropriate to comply with
this chapter; or
(2) issue an order denying, suspending, revoking, or conditioning the registration of
the bullion coin dealer or coin dealer representative.
(b) Upon issuance of an order, the commissioner shall promptly serve each person
subject to the order with a copy of the order and a notice that the order has been
issued. The order must include a statement of the reasons for the order and whether the
commissioner will seek a civil penalty or costs of the investigation, and notice that the
person must within 30 days of being served with the order, request in writing a hearing
and that within 15 days after receipt of a written hearing request from the person, the
matter will be scheduled for a hearing. If a person subject to the order does not request a
hearing within 30 days after the date of service of the order, the order becomes final as to
that person by operation of law. If a hearing is requested, the commissioner, after notice of
an opportunity for hearing to each person subject to the order, may modify or vacate the
order or extend it until final determination.
(c) If a hearing is requested pursuant to paragraph (b), a hearing must be held under
chapter 14 and a final order may not be issued unless the commissioner makes findings of
fact and conclusions of law in a record according to chapter 14. The final order may make
final, vacate, or modify the order issued under paragraph (a).
(d) If a petition for judicial review of a final order is not filed in accordance with
chapter 14, the commissioner may file a certified copy of the final order with the clerk of a
court of competent jurisdiction. The order so filed has the same effect as a judgment of the
court and may be recorded, enforced, or satisfied in the same manner as a judgment of
the court.
(e) If a person does not comply with an order under this section, the commissioner
may petition a court of competent jurisdiction to enforce the order. The court may not
require the commissioner to post a bond in an action or proceeding under this section.
If the court finds, after service and opportunity for hearing, that the person was not in
compliance with the order, the court may adjudge the person in civil contempt of the order.
The court may impose a further civil penalty against the person for contempt in an amount
up to $10,000 for each violation and may grant any other relief the court determines is just
and proper in the circumstances.
(f) In addition to the authority granted under this chapter, the commissioner has all
the authority provided under section 45.027 to ensure compliance with this chapter.

    Sec. 11. EFFECTIVE DATE.
This act is effective August 1, 2013.
Presented to the governor May 22, 2013
Signed by the governor May 24, 2013, 2:25 p.m.

700 State Office Building, 100 Rev. Dr. Martin Luther King Jr. Blvd., St. Paul, MN 55155 ♦ Phone: (651) 296-2868 ♦ TTY: 1-800-627-3529 ♦ Fax: (651) 296-0569