Bill Text: MN HF157 | 2013-2014 | 88th Legislature | Engrossed
Bill Title: Bullion coin dealers regulated, registration required, conduct prohibited; and enforcement authority, civil, and criminal penalties provided.
Sponsorship: Moderate Partisan Bill (Democrat 6-1)
Status: (Passed) 2013-05-24 - Secretary of State Chapter 120 [HF157 Detail]
Download: Minnesota-2013-HF157-Engrossed.html
1.2relating to commerce; regulating bullion coin dealers; requiring registration;
1.3prohibiting certain conduct; providing enforcement authority and civil and
1.4criminal penalties;proposing coding for new law as Minnesota Statutes, chapter
1.580G.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. [80G.01] DEFINITIONS.
1.8 Subdivision 1. Scope. For purposes of this chapter, the following terms have the
1.9meanings given to them in this section.
1.10 Subd. 2. Bullion coin. "Bullion coin" means any coin containing more than one
1.11percent by weight of silver, gold, platinum, or other precious metal.
1.12 Subd. 3. Bullion coin dealer. (a) Subject to the exceptions in paragraph (b), a
1.13"bullion coin dealer" means any person who buys, sells, solicits, or markets bullion
1.14coins or investments in bullion coins to consumers and is either incorporated, registered,
1.15domiciled, or otherwise located in this state, or who does business with a consumer
1.16domiciled, residing, or otherwise located in this state.
1.17(b) A bullion coin dealer does not include any of the following persons:
1.18(1) a person who engages only in wholesale bullion coin transactions with bullion
1.19coin dealers who sell at retail and are properly registered under this chapter;
1.20(2) a person who engages only in transactions at occasional garage or yard sales
1.21held at the seller's residence, farm auctions held at the seller's residence, or estate sales
1.22held at the decedent's residence;
1.23(3) a person who is properly registered pursuant to chapter 80A, or the federal
1.24Securities Exchange Act of 1934 and rules promulgated thereunder as a securities broker
1.25dealer or broker dealer agent;
2.1(4) an auctioneer who auctions coins at auction on behalf of an owner, if the
2.2auctioneer does not take title or ownership of the coins, or the operator of an Internet Web
2.3site that allows users to offer the sale of coins through that Web site, does not set the price,
2.4is not the seller of record, and does not take possession of any coins to be offered;
2.5(5) a person who engages only in transactions at occasional trade shows where the
2.6consumer is present and the transaction is made at the trade show; or
2.7(6) a federally or state-chartered bank, bank and trust, savings bank, savings
2.8association, or credit union or any operating subsidiary of them.
2.9 Subd. 4. Coin dealer representative. "Coin dealer representative" means any
2.10natural person acting as an employee, contractor, or agent of a bullion coin dealer and
2.11who has interactions with consumers for the purpose of the buying, selling, solicitation, or
2.12marketing of bullion coins or investments in bullion coins.
2.13 Subd. 5. Commissioner. "Commissioner" means the commissioner of commerce.
2.14 Subd. 6. Owner. "Owner" means any person who has an ownership interest in a
2.15bullion coin dealer, regardless of whether directly or indirectly, of more than ten percent
2.16and who is actively engaged in the direction, management, oversight, or operation of the
2.17bullion coin dealer or its business affairs.
2.18 Subd. 7. Person. "Person" has the same meaning given in section 325F.68,
2.19subdivision 3.
2.20 Subd. 8. Precious metal content. "Precious metal content" means the quantity,
2.21measured in grams, of gold, silver, platinum, or other precious metal in a coin and the
2.22percentage that the precious metal constitutes of the total weight of the coin.
2.23 Sec. 2. [80G.02] REGISTRATION.
2.24 Subdivision 1. Registration required. Beginning July 1, 2014, it shall be unlawful
2.25for a bullion coin dealer or coin dealer representative to solicit, market, buy, sell, or deliver
2.26bullion coins or investments in bullion coins to a consumer without being registered by the
2.27commissioner as provided for in this chapter, if the bullion coin dealer has engaged in a
2.28bullion coin transaction or transactions with consumers during the 12-month period prior
2.29to July 1, 2014, that exceed $5,000 in the aggregate, as determined by the transactions'
2.30sale prices. If a bullion coin dealer was not required to be registered beginning on July 1,
2.312014, the bullion coin dealer must submit an application to register itself and each of its
2.32coin dealer representatives within 30 days of reaching $5,000 in the aggregate of bullion
2.33coin transactions with consumers in any 12-month period prior to July 1 of any calendar
2.34year, as determined by the transactions' sale prices. Once a bullion coin dealer is required
2.35to register itself and its coin dealer representatives, the coin dealer must thereafter renew
3.1its registration and the registration of each of its coin dealer representatives in accordance
3.2with this chapter, regardless of the aggregate amount of transactions, unless the person
3.3ceases to be a bullion coin dealer. A coin dealer representative may not buy, sell, solicit,
3.4or market bullion coins or investments in bullion coins on behalf of a bullion coin dealer
3.5unless the dealer is properly registered with the commissioner under this section.
3.6 Subd. 2. Registration obligations. Registrations issued or renewed by the
3.7commissioner under this chapter shall expire on June 30 and must be renewed.
3.8 Subd. 3. Registration application and renewal. The application and renewal
3.9forms shall include the following information, as applicable, which shall be considered by
3.10the commissioner in determining whether to issue a registration and whether to thereafter
3.11renew the registration:
3.12(1) the name, assumed names, doing business as names, including caller
3.13identification names, and business addresses of the bullion coin dealer, the name of
3.14each owner and officer, and the name and primary work location of each coin dealer
3.15representative. A bullion coin dealer who desires to carry on business in more than one
3.16location shall identify each address where business is conducted;
3.17(2) if a bullion coin dealer is doing business under any name other than the dealer's
3.18legal name, documentation that the assumed name has been properly filed with the
3.19secretary of state;
3.20(3) the telephone numbers, including cellular phone numbers, electronic mail
3.21addresses, and Web site domain names used or intended to be used by the bullion coin
3.22dealer and its coin dealer representatives to buy, sell, solicit, market, or deliver to
3.23consumers bullion coin or investments in bullion coin;
3.24(4) the disclosure of all criminal convictions by any court within the last ten years
3.25for the bullion coin dealer and each officer and owner of the bullion coin dealer and
3.26for each of its coin dealer representatives;
3.27(5) the disclosure of any civil judgments in favor of a government entity or
3.28government entity orders entered, filed, or issued against the bullion coin dealer, its
3.29officers and owners, or its coin dealer representatives within the last ten years for violation
3.30of consumer protection laws or unfair trade practice laws or for failure to account to a
3.31consumer for money or property received from the consumer;
3.32(6) the disclosure of any settlement or other agreement with any government entity
3.33within the last ten years resolving concerns that the bullion coin dealer, its officers and
3.34owners, or its coin dealer representatives violated consumer protection or unfair trade
3.35practice laws, or for failure to account to a consumer for money or property received
3.36from the consumer; and
4.1(7) the disclosure of any instance in which the bullion coin dealer, its officers and
4.2owners, and its coin dealer representatives were at any time permanently or temporarily
4.3prohibited by any court of competent jurisdiction or ordered to cease and desist as the
4.4result of a government agency action from engaging in buying, selling, soliciting, or
4.5marketing of bullion coin or investments in bullion coin. A bullion coin dealer may rely on
4.6the screening process provided for in section 80G.05 and the statements of its coin dealer
4.7representatives for the purposes of complying with the disclosure requirements of this
4.8clause relating to coin dealer representatives, provided that such reliance is reasonable, in
4.9good faith, and the bullion coin dealer has no knowledge of information suggesting that
4.10the screening results or statement are inaccurate.
4.11 Subd. 4. Notice of change in registration information. A bullion coin dealer must
4.12provide the commissioner written notice of a change in the dealer's name, assumed names,
4.13doing business as names, business addresses, including all business addresses at which it
4.14or its coin dealer representatives conduct business, owners, electronic mail addresses, Web
4.15site domain names, or telephone numbers used by it or its coin dealer representatives to
4.16buy, sell, solicit, or market to consumers bullion coin or investments in bullion coin no
4.17later than ten days after the change occurs.
4.18 Sec. 3. [80G.03] REGISTRATION DENIAL, NONRENEWAL, REVOCATION,
4.19AND SUSPENSION.
4.20 Subdivision 1. Authority. The commissioner may, by order, suspend, revoke, or
4.21refuse to issue or renew a bullion coin dealer or coin dealer representative registration for
4.22any one or more of the following causes:
4.23(1) providing incorrect, false, misleading, or incomplete information to the
4.24commissioner or refusing to allow a reasonable inspection of information and documents
4.25in the possession of the bullion coin dealer, coin dealer representative, or a third party or
4.26to allow a reasonable inspection of premises;
4.27(2) obtaining or attempting to obtain a registration through misrepresentation or fraud;
4.28(3) having a bullion coin dealer or coin dealer representative registration or its
4.29equivalent, including licensure under section 325F.73, denied, suspended, or revoked by
4.30any locality within the state or other state, province, district, or territory;
4.31(4) being permanently or temporarily enjoined by any court of competent jurisdiction
4.32or being ordered to cease and desist by a government agency from engaging in or
4.33continuing any conduct or practice involving the buying, selling, soliciting, or marketing
4.34of bullion coins, investments in bullion coins, or precious metal to consumers;
5.1(5) violating the provisions of this chapter or of sections 45.027; 325D.43 to
5.2325D.48; 325F.67; 325F.68 to 325F.69; 325F.694; and 325F.73 to 325F.744, or federal
5.3or state taxation or labor law; or
5.4(6) violating a subpoena or order of the commissioner or a court issued pursuant
5.5to this chapter or sections 45.027; 325D.43 to 325D.48; 325F.67; 325F.68 to 325F.69;
5.6325F.694; 325F.70; and 325F.73 to 325F.744.
5.7 Subd. 2. Bullion coin dealer responsibility for actions of coin dealer
5.8representatives. The commissioner may take action against a bullion coin dealer for
5.9any violations of this chapter by its coin dealer representatives conducting activities on
5.10behalf of or at the direction of the bullion coin dealer. The commissioner may also take
5.11action against the coin dealer representative.
5.12 Subd. 3. Other authority of the commissioner. If a registration lapses, is
5.13surrendered, withdrawn, terminated, or otherwise becomes ineffective, the commissioner
5.14may institute a proceeding under this subdivision within two years after the registration
5.15was last effective and enter a revocation order as of the last date on which the registration
5.16was in effect, and impose a civil penalty as provided for in section 45.027, subdivision 6.
5.17 Subd. 4. Effect of revocation. A revocation of a registration prohibits the bullion
5.18coin dealer or coin dealer representatives from making a new application for a registration
5.19for at least two years from the effective date of the revocation.
5.20 Sec. 4. [80G.04] CRIMINAL CONVICTIONS.
5.21 Subdivision 1. Bullion coin dealer registration precluded. The commissioner
5.22must deny an application for registration or renewal of a bullion coin dealer, or revoke such
5.23registration, if the bullion coin dealer or its owners or officers have within the last ten years
5.24been convicted in any court of any financial crime or other crime involving fraud or theft.
5.25 Subd. 2. Coin dealer representative registration precluded. The commissioner
5.26must deny an application for registration or renewal of a coin dealer representative, or
5.27revoke such registration, if the coin dealer representative has within the last ten years been
5.28convicted in any court of any financial crime or other crime involving fraud or theft.
5.29 Sec. 5. [80G.05] SCREENING.
5.30 Subdivision 1. Screening process required. Each bullion coin dealer must
5.31establish procedures to screen each of its owners and officers and each of its coin
5.32dealer representatives prior to submitting the application to the commissioner for initial
5.33registration and at each renewal. The results of such screenings shall be provided to the
6.1commissioner as part of the initial registration and all renewal registrations if requested by
6.2the commissioner.
6.3 Subd. 2. Initial screening. The screening process for initial registration must be
6.4done no more than 60 days before the submission of an application for registration. The
6.5process must include a national criminal history record search, a judgment search, and a
6.6county criminal history search for all counties where the owner, officer, or coin dealer
6.7representative has resided within the immediately preceding ten years. Each bullion
6.8coin dealer shall use a reputable, reliable, and accurate vendor authorized to do business
6.9in Minnesota to conduct the background screening process on its owners, officers, and
6.10coin dealer representatives.
6.11 Subd. 3. Renewal screening. The screening process for the renewal of a
6.12registration must include a national criminal history record search, a judgment search, and
6.13county criminal history search for all counties where the owner, officer, or coin dealer
6.14representative has resided since satisfactorily completing the last screening process
6.15conducted pursuant to this section. Screening for renewal of the owner, officer, and coin
6.16dealer representative registrations must take place no more than 60 days before the
6.17submission of an application for renewal of a registration.
6.18 Sec. 6. [80G.06] SURETY BOND.
6.19 Subdivision 1. Surety bond requirement. Every bullion coin dealer shall maintain a
6.20current, valid surety bond issued by a surety company admitted to do business in Minnesota
6.21in an amount based on the transactions (purchases from and sales to consumers at retail)
6.22during the 12-month period prior to registration, or renewal, whichever is applicable.
6.23The amount of the surety bond shall be as specified in the table below:
6.31 Subd. 2. Action on bond permitted. A consumer injured in money or property by a
6.32bullion coin dealer's or coin dealer representative's failure to provide bullion coins that
6.33the consumer has paid for or failure to remit money or goods owed to the consumer in
6.34connection with the consumer's sale of bullion coins may file a claim with the surety and
6.35if the claim is not paid, is authorized to bring an action based on the bond and recover
7.1against the surety. The commissioner or attorney general may also file a claim and bring
7.2an action on the bond and recover against the surety on behalf of a consumer so injured.
7.3 Sec. 7. [80G.07] PROHIBITED CONDUCT.
7.4 Subdivision 1. Sales practices. No bullion coin dealer or coin dealer representative
7.5shall:
7.6(1) prior to a transaction regarding bullion coins, or concurrent with the delivery
7.7thereof, fail to provide to the consumer in writing, in a clear and conspicuous manner,
7.8the sale or purchase price and the precious metal content of the bullion coins involved in
7.9the transaction. The written notice shall also include the bullion coin dealer's registration
7.10identification information issued by the commissioner, and the Department of Commerce's
7.11e-mail address and telephone number. A copy of the written notice shall be provided to
7.12the consumer and a copy retained by the bullion coin dealer;
7.13(2) fail to deliver bullion coins to a consumer within the time agreed upon with
7.14the consumer or, if no such agreement exists, within 30 days after the consumer has
7.15paid for the coins;
7.16(3) fail to pay a consumer for purchased bullion coins within the time agreed upon
7.17with the consumer or, if no such agreement exists, within 30 days after the consumer
7.18has provided the coins;
7.19(4) fail to provide a written invoice at the time of the transaction specifically
7.20identifying and describing the bullion coins involved in the transaction, the quantity of
7.21bullion coins involved in the transaction, and the bullion coins' sale or purchase price and
7.22precious metal content. The written invoice shall include the bullion coin dealer registration
7.23identification information issued by the commissioner, and the Department of Commerce's
7.24e-mail address and telephone number. A copy of the transaction documentation shall be
7.25provided to the consumer and a copy retained by the bullion coin dealer;
7.26(5) misrepresent the delivery date of bullion coins or payment for bullion coins, or
7.27the dealer or representative's professional qualifications, affiliations, or registration;
7.28(6) misrepresent any material aspect of a bullion coin, including its performance,
7.29efficacy, nature, investment value, central characteristics, liquidity, earnings potential,
7.30or profitability;
7.31(7) misrepresent the manner in which any bullion coins a consumer provides will be
7.32stored or otherwise handled once received;
7.33(8) renegotiate the terms of a sale or purchase after receiving a consumer's payment
7.34or bullion coins without first obtaining the consumer's agreement to renegotiate and
8.1offering the consumer the option to have the payment fully refunded or the entirety of
8.2the bullion coins returned;
8.3(9) fail to respond within three business days to a consumer inquiry about the
8.4delivery status of bullion coins that the consumer has paid for but not yet received or the
8.5status of a payment for bullion coins that the consumer has already provided;
8.6(10) telephone or solicit a consumer, or sell or provide the consumer's name to
8.7any other bullion coin dealer or coin dealer representative, after the consumer requests
8.8not to be contacted;
8.9(11) violate a subpoena or order of the commissioner or a court;
8.10(12) make any communication to a potential buyer or seller of bullion coins that
8.11misrepresents the relationship, if any, between the bullion coin dealer or coin dealer
8.12representative and any government agency or mint;
8.13(13) improperly withhold, misappropriate, or convert any money or properties
8.14received in the course of buying, selling, soliciting, or marketing bullion coins or
8.15investments in bullion coins to consumers;
8.16(14) misrepresent the terms of an actual or proposed purchase or sale of bullion coins
8.17or investment in bullion coins to a consumer; or
8.18(15) violate any other federal, state, or local law or rule related to selling, purchasing,
8.19soliciting, or marketing of bullion coin, investments in bullion coin, or precious metals, or
8.20any federal, state, or local law related to fraudulent, coercive, or dishonest practices, or
8.21federal, state, or local law related to taxation or labor standards.
8.22 Subd. 2. Application. From August 1, 2013, to June 30, 2014, this section shall
8.23apply to any bullion coin dealer and its coin dealer representatives if the bullion coin
8.24dealer is engaged in a bullion coin transaction or transactions with consumers which
8.25exceed $5,000 in the aggregate, as determined by the transaction sale prices, during the
8.2612-month period prior to August 1, 2013. On or after July 1, 2014, this section shall
8.27apply to any bullion coin dealer and its coin dealer representatives which is or should be
8.28registered in accordance with the provisions of this chapter.
8.29 Sec. 8. [80G.08] CRIMINAL VIOLATION.
8.30A person who conducts business as a bullion coin dealer or as a coin dealer
8.31representative without having first registered with the commissioner, or who carries on
8.32such business after the revocation, suspension, or expiration of a registration, or who
8.33violates section 80G.07, subdivision 1, clause (2) or (3), is guilty of a misdemeanor.
8.34 Sec. 9. [80G.09] OTHER ACTION; LOCAL AUTHORITY.
9.1Nothing in this chapter precludes an action under chapter 80A or preempts local
9.2government authority under section 325F.742.
9.3 Sec. 10. [80G.10] INVESTIGATIONS AND CIVIL ENFORCEMENT.
9.4 Subdivision 1. Civil action instituted by commissioner. If the commissioner
9.5believes that a person has engaged, is engaging, or is about to engage in an act, practice,
9.6or course of business constituting a violation of this chapter or a rule adopted or order
9.7issued under this chapter or that a person has, is, or is about to engage in an act, practice,
9.8or course of business that materially aids a violation of this chapter or a rule adopted or
9.9order issued under this chapter, the commissioner may maintain an action in the district
9.10court to enjoin the act, practice, or course of business and to enforce compliance with this
9.11chapter or a rule adopted or order issued under this chapter.
9.12 Subd. 2. Relief available. In an action under this section and on a proper showing,
9.13the court may:
9.14(1) issue a permanent or temporary injunction, restraining order, or declaratory
9.15judgment;
9.16(2) order other appropriate or ancillary relief, which may include:
9.17(i) an asset freeze, accounting, writ of attachment, writ of general or specific
9.18execution, and appointment of a receiver or conservator, that may be the commissioner,
9.19for the defendant or the defendant's assets;
9.20(ii) ordering the commissioner to take charge and control of a defendant's property,
9.21including investment accounts and accounts in a depository institution, rents, and profits;
9.22to collect debts; and to acquire and dispose of property;
9.23(iii) imposing a civil penalty up to $10,000 for each violation; an order of rescission,
9.24restitution, or disgorgement directed to a person that has engaged in an act, practice, or
9.25course of business constituting a violation of this chapter or a rule adopted or order issued
9.26under this chapter or the predecessor act; and
9.27(iv) ordering the payment of prejudgment and postjudgment interest; or
9.28(3) order such other relief as the court considers appropriate.
9.29 Subd. 3. No bond required. The commissioner may not be required to post a bond
9.30in an action or proceeding under this chapter.
9.31 Subd. 4. Commissioner authority. (a) If the commissioner determines that a
9.32person has engaged, is engaged, or is about to engage in an act, practice, or course of
9.33conduct constituting a violation of this chapter or a rule adopted or order issued under this
9.34chapter or that a person has materially aided, is materially aiding, or is about to materially
10.1aid an act, practice, or course of conduct constituting a violation of this chapter or rule
10.2adopted or order issued under this chapter the commissioner may:
10.3(1) issue an order directing the person to cease and desist from engaging in the
10.4act, practice, or conduct or to take other action necessary or appropriate to comply with
10.5this chapter; or
10.6(2) issue an order denying, suspending, revoking, or conditioning the registration of
10.7the bullion coin dealer or coin dealer representative.
10.8(b) Upon issuance of an order, the commissioner shall promptly serve each person
10.9subject to the order with a copy of the order and a notice that the order has been
10.10issued. The order must include a statement of the reasons for the order and whether the
10.11commissioner will seek a civil penalty or costs of the investigation, and notice that the
10.12person must within 30 days of being served with the order, request in writing a hearing
10.13and that within 15 days after receipt of a written hearing request from the person, the
10.14matter will be scheduled for a hearing. If a person subject to the order does not request a
10.15hearing within 30 days after the date of service of the order, the order becomes final as to
10.16that person by operation of law. If a hearing is requested, the commissioner, after notice of
10.17an opportunity for hearing to each person subject to the order, may modify or vacate the
10.18order or extend it until final determination.
10.19(c) If a hearing is requested pursuant to paragraph (b), a hearing must be held under
10.20chapter 14 and a final order may not be issued unless the commissioner makes findings of
10.21fact and conclusions of law in a record according to chapter 14. The final order may make
10.22final, vacate, or modify the order issued under paragraph (a).
10.23(d) If a petition for judicial review of a final order is not filed in accordance with
10.24chapter 14, the commissioner may file a certified copy of the final order with the clerk of a
10.25court of competent jurisdiction. The order so filed has the same effect as a judgment of the
10.26court and may be recorded, enforced, or satisfied in the same manner as a judgment of
10.27the court.
10.28(e) If a person does not comply with an order under this section, the commissioner
10.29may petition a court of competent jurisdiction to enforce the order. The court may not
10.30require the commissioner to post a bond in an action or proceeding under this section.
10.31If the court finds, after service and opportunity for hearing, that the person was not in
10.32compliance with the order, the court may adjudge the person in civil contempt of the order.
10.33The court may impose a further civil penalty against the person for contempt in an amount
10.34up to $10,000 for each violation and may grant any other relief the court determines is just
10.35and proper in the circumstances.
11.1(f) In addition to the authority granted under this chapter, the commissioner has all
11.2the authority provided under section 45.027 to ensure compliance with this chapter.
11.3 Sec. 11. EFFECTIVE DATE.
11.4This act is effective August 1, 2013.
1.3prohibiting certain conduct; providing enforcement authority and civil and
1.4criminal penalties;proposing coding for new law as Minnesota Statutes, chapter
1.580G.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. [80G.01] DEFINITIONS.
1.8 Subdivision 1. Scope. For purposes of this chapter, the following terms have the
1.9meanings given to them in this section.
1.10 Subd. 2. Bullion coin. "Bullion coin" means any coin containing more than one
1.11percent by weight of silver, gold, platinum, or other precious metal.
1.12 Subd. 3. Bullion coin dealer. (a) Subject to the exceptions in paragraph (b), a
1.13"bullion coin dealer" means any person who buys, sells, solicits, or markets bullion
1.14coins or investments in bullion coins to consumers and is either incorporated, registered,
1.15domiciled, or otherwise located in this state, or who does business with a consumer
1.16domiciled, residing, or otherwise located in this state.
1.17(b) A bullion coin dealer does not include any of the following persons:
1.18(1) a person who engages only in wholesale bullion coin transactions with bullion
1.19coin dealers who sell at retail and are properly registered under this chapter;
1.20(2) a person who engages only in transactions at occasional garage or yard sales
1.21held at the seller's residence, farm auctions held at the seller's residence, or estate sales
1.22held at the decedent's residence;
1.23(3) a person who is properly registered pursuant to chapter 80A, or the federal
1.24Securities Exchange Act of 1934 and rules promulgated thereunder as a securities broker
1.25dealer or broker dealer agent;
2.1(4) an auctioneer who auctions coins at auction on behalf of an owner, if the
2.2auctioneer does not take title or ownership of the coins, or the operator of an Internet Web
2.3site that allows users to offer the sale of coins through that Web site, does not set the price,
2.4is not the seller of record, and does not take possession of any coins to be offered;
2.5(5) a person who engages only in transactions at occasional trade shows where the
2.6consumer is present and the transaction is made at the trade show; or
2.7(6) a federally or state-chartered bank, bank and trust, savings bank, savings
2.8association, or credit union or any operating subsidiary of them.
2.9 Subd. 4. Coin dealer representative. "Coin dealer representative" means any
2.10natural person acting as an employee, contractor, or agent of a bullion coin dealer and
2.11who has interactions with consumers for the purpose of the buying, selling, solicitation, or
2.12marketing of bullion coins or investments in bullion coins.
2.13 Subd. 5. Commissioner. "Commissioner" means the commissioner of commerce.
2.14 Subd. 6. Owner. "Owner" means any person who has an ownership interest in a
2.15bullion coin dealer, regardless of whether directly or indirectly, of more than ten percent
2.16and who is actively engaged in the direction, management, oversight, or operation of the
2.17bullion coin dealer or its business affairs.
2.18 Subd. 7. Person. "Person" has the same meaning given in section 325F.68,
2.19subdivision 3.
2.20 Subd. 8. Precious metal content. "Precious metal content" means the quantity,
2.21measured in grams, of gold, silver, platinum, or other precious metal in a coin and the
2.22percentage that the precious metal constitutes of the total weight of the coin.
2.23 Sec. 2. [80G.02] REGISTRATION.
2.24 Subdivision 1. Registration required. Beginning July 1, 2014, it shall be unlawful
2.25for a bullion coin dealer or coin dealer representative to solicit, market, buy, sell, or deliver
2.26bullion coins or investments in bullion coins to a consumer without being registered by the
2.27commissioner as provided for in this chapter, if the bullion coin dealer has engaged in a
2.28bullion coin transaction or transactions with consumers during the 12-month period prior
2.29to July 1, 2014, that exceed $5,000 in the aggregate, as determined by the transactions'
2.30sale prices. If a bullion coin dealer was not required to be registered beginning on July 1,
2.312014, the bullion coin dealer must submit an application to register itself and each of its
2.32coin dealer representatives within 30 days of reaching $5,000 in the aggregate of bullion
2.33coin transactions with consumers in any 12-month period prior to July 1 of any calendar
2.34year, as determined by the transactions' sale prices. Once a bullion coin dealer is required
2.35to register itself and its coin dealer representatives, the coin dealer must thereafter renew
3.1its registration and the registration of each of its coin dealer representatives in accordance
3.2with this chapter, regardless of the aggregate amount of transactions, unless the person
3.3ceases to be a bullion coin dealer. A coin dealer representative may not buy, sell, solicit,
3.4or market bullion coins or investments in bullion coins on behalf of a bullion coin dealer
3.5unless the dealer is properly registered with the commissioner under this section.
3.6 Subd. 2. Registration obligations. Registrations issued or renewed by the
3.7commissioner under this chapter shall expire on June 30 and must be renewed.
3.8 Subd. 3. Registration application and renewal. The application and renewal
3.9forms shall include the following information, as applicable, which shall be considered by
3.10the commissioner in determining whether to issue a registration and whether to thereafter
3.11renew the registration:
3.12(1) the name, assumed names, doing business as names, including caller
3.13identification names, and business addresses of the bullion coin dealer, the name of
3.14each owner and officer, and the name and primary work location of each coin dealer
3.15representative. A bullion coin dealer who desires to carry on business in more than one
3.16location shall identify each address where business is conducted;
3.17(2) if a bullion coin dealer is doing business under any name other than the dealer's
3.18legal name, documentation that the assumed name has been properly filed with the
3.19secretary of state;
3.20(3) the telephone numbers, including cellular phone numbers, electronic mail
3.21addresses, and Web site domain names used or intended to be used by the bullion coin
3.22dealer and its coin dealer representatives to buy, sell, solicit, market, or deliver to
3.23consumers bullion coin or investments in bullion coin;
3.24(4) the disclosure of all criminal convictions by any court within the last ten years
3.25for the bullion coin dealer and each officer and owner of the bullion coin dealer and
3.26for each of its coin dealer representatives;
3.27(5) the disclosure of any civil judgments in favor of a government entity or
3.28government entity orders entered, filed, or issued against the bullion coin dealer, its
3.29officers and owners, or its coin dealer representatives within the last ten years for violation
3.30of consumer protection laws or unfair trade practice laws or for failure to account to a
3.31consumer for money or property received from the consumer;
3.32(6) the disclosure of any settlement or other agreement with any government entity
3.33within the last ten years resolving concerns that the bullion coin dealer, its officers and
3.34owners, or its coin dealer representatives violated consumer protection or unfair trade
3.35practice laws, or for failure to account to a consumer for money or property received
3.36from the consumer; and
4.1(7) the disclosure of any instance in which the bullion coin dealer, its officers and
4.2owners, and its coin dealer representatives were at any time permanently or temporarily
4.3prohibited by any court of competent jurisdiction or ordered to cease and desist as the
4.4result of a government agency action from engaging in buying, selling, soliciting, or
4.5marketing of bullion coin or investments in bullion coin. A bullion coin dealer may rely on
4.6the screening process provided for in section 80G.05 and the statements of its coin dealer
4.7representatives for the purposes of complying with the disclosure requirements of this
4.8clause relating to coin dealer representatives, provided that such reliance is reasonable, in
4.9good faith, and the bullion coin dealer has no knowledge of information suggesting that
4.10the screening results or statement are inaccurate.
4.11 Subd. 4. Notice of change in registration information. A bullion coin dealer must
4.12provide the commissioner written notice of a change in the dealer's name, assumed names,
4.13doing business as names, business addresses, including all business addresses at which it
4.14or its coin dealer representatives conduct business, owners, electronic mail addresses, Web
4.15site domain names, or telephone numbers used by it or its coin dealer representatives to
4.16buy, sell, solicit, or market to consumers bullion coin or investments in bullion coin no
4.17later than ten days after the change occurs.
4.18 Sec. 3. [80G.03] REGISTRATION DENIAL, NONRENEWAL, REVOCATION,
4.19AND SUSPENSION.
4.20 Subdivision 1. Authority. The commissioner may, by order, suspend, revoke, or
4.21refuse to issue or renew a bullion coin dealer or coin dealer representative registration for
4.22any one or more of the following causes:
4.23(1) providing incorrect, false, misleading, or incomplete information to the
4.24commissioner or refusing to allow a reasonable inspection of information and documents
4.25in the possession of the bullion coin dealer, coin dealer representative, or a third party or
4.26to allow a reasonable inspection of premises;
4.27(2) obtaining or attempting to obtain a registration through misrepresentation or fraud;
4.28(3) having a bullion coin dealer or coin dealer representative registration or its
4.29equivalent, including licensure under section 325F.73, denied, suspended, or revoked by
4.30any locality within the state or other state, province, district, or territory;
4.31(4) being permanently or temporarily enjoined by any court of competent jurisdiction
4.32or being ordered to cease and desist by a government agency from engaging in or
4.33continuing any conduct or practice involving the buying, selling, soliciting, or marketing
4.34of bullion coins, investments in bullion coins, or precious metal to consumers;
5.1(5) violating the provisions of this chapter or of sections 45.027; 325D.43 to
5.2325D.48; 325F.67; 325F.68 to 325F.69; 325F.694; and 325F.73 to 325F.744, or federal
5.3or state taxation or labor law; or
5.4(6) violating a subpoena or order of the commissioner or a court issued pursuant
5.5to this chapter or sections 45.027; 325D.43 to 325D.48; 325F.67; 325F.68 to 325F.69;
5.6325F.694; 325F.70; and 325F.73 to 325F.744.
5.7 Subd. 2. Bullion coin dealer responsibility for actions of coin dealer
5.8representatives. The commissioner may take action against a bullion coin dealer for
5.9any violations of this chapter by its coin dealer representatives conducting activities on
5.10behalf of or at the direction of the bullion coin dealer. The commissioner may also take
5.11action against the coin dealer representative.
5.12 Subd. 3. Other authority of the commissioner. If a registration lapses, is
5.13surrendered, withdrawn, terminated, or otherwise becomes ineffective, the commissioner
5.14may institute a proceeding under this subdivision within two years after the registration
5.15was last effective and enter a revocation order as of the last date on which the registration
5.16was in effect, and impose a civil penalty as provided for in section 45.027, subdivision 6.
5.17 Subd. 4. Effect of revocation. A revocation of a registration prohibits the bullion
5.18coin dealer or coin dealer representatives from making a new application for a registration
5.19for at least two years from the effective date of the revocation.
5.20 Sec. 4. [80G.04] CRIMINAL CONVICTIONS.
5.21 Subdivision 1. Bullion coin dealer registration precluded. The commissioner
5.22must deny an application for registration or renewal of a bullion coin dealer, or revoke such
5.23registration, if the bullion coin dealer or its owners or officers have within the last ten years
5.24been convicted in any court of any financial crime or other crime involving fraud or theft.
5.25 Subd. 2. Coin dealer representative registration precluded. The commissioner
5.26must deny an application for registration or renewal of a coin dealer representative, or
5.27revoke such registration, if the coin dealer representative has within the last ten years been
5.28convicted in any court of any financial crime or other crime involving fraud or theft.
5.29 Sec. 5. [80G.05] SCREENING.
5.30 Subdivision 1. Screening process required. Each bullion coin dealer must
5.31establish procedures to screen each of its owners and officers and each of its coin
5.32dealer representatives prior to submitting the application to the commissioner for initial
5.33registration and at each renewal. The results of such screenings shall be provided to the
6.1commissioner as part of the initial registration and all renewal registrations if requested by
6.2the commissioner.
6.3 Subd. 2. Initial screening. The screening process for initial registration must be
6.4done no more than 60 days before the submission of an application for registration. The
6.5process must include a national criminal history record search, a judgment search, and a
6.6county criminal history search for all counties where the owner, officer, or coin dealer
6.7representative has resided within the immediately preceding ten years. Each bullion
6.8coin dealer shall use a reputable, reliable, and accurate vendor authorized to do business
6.9in Minnesota to conduct the background screening process on its owners, officers, and
6.10coin dealer representatives.
6.11 Subd. 3. Renewal screening. The screening process for the renewal of a
6.12registration must include a national criminal history record search, a judgment search, and
6.13county criminal history search for all counties where the owner, officer, or coin dealer
6.14representative has resided since satisfactorily completing the last screening process
6.15conducted pursuant to this section. Screening for renewal of the owner, officer, and coin
6.16dealer representative registrations must take place no more than 60 days before the
6.17submission of an application for renewal of a registration.
6.18 Sec. 6. [80G.06] SURETY BOND.
6.19 Subdivision 1. Surety bond requirement. Every bullion coin dealer shall maintain a
6.20current, valid surety bond issued by a surety company admitted to do business in Minnesota
6.21in an amount based on the transactions (purchases from and sales to consumers at retail)
6.22during the 12-month period prior to registration, or renewal, whichever is applicable.
6.23The amount of the surety bond shall be as specified in the table below:
6.31 Subd. 2. Action on bond permitted. A consumer injured in money or property by a
6.32bullion coin dealer's or coin dealer representative's failure to provide bullion coins that
6.33the consumer has paid for or failure to remit money or goods owed to the consumer in
6.34connection with the consumer's sale of bullion coins may file a claim with the surety and
6.35if the claim is not paid, is authorized to bring an action based on the bond and recover
7.1against the surety. The commissioner or attorney general may also file a claim and bring
7.2an action on the bond and recover against the surety on behalf of a consumer so injured.
7.3 Sec. 7. [80G.07] PROHIBITED CONDUCT.
7.4 Subdivision 1. Sales practices. No bullion coin dealer or coin dealer representative
7.5shall:
7.6(1) prior to a transaction regarding bullion coins, or concurrent with the delivery
7.7thereof, fail to provide to the consumer in writing, in a clear and conspicuous manner,
7.8the sale or purchase price and the precious metal content of the bullion coins involved in
7.9the transaction. The written notice shall also include the bullion coin dealer's registration
7.10identification information issued by the commissioner, and the Department of Commerce's
7.11e-mail address and telephone number. A copy of the written notice shall be provided to
7.12the consumer and a copy retained by the bullion coin dealer;
7.13(2) fail to deliver bullion coins to a consumer within the time agreed upon with
7.14the consumer or, if no such agreement exists, within 30 days after the consumer has
7.15paid for the coins;
7.16(3) fail to pay a consumer for purchased bullion coins within the time agreed upon
7.17with the consumer or, if no such agreement exists, within 30 days after the consumer
7.18has provided the coins;
7.19(4) fail to provide a written invoice at the time of the transaction specifically
7.20identifying and describing the bullion coins involved in the transaction, the quantity of
7.21bullion coins involved in the transaction, and the bullion coins' sale or purchase price and
7.22precious metal content. The written invoice shall include the bullion coin dealer registration
7.23identification information issued by the commissioner, and the Department of Commerce's
7.24e-mail address and telephone number. A copy of the transaction documentation shall be
7.25provided to the consumer and a copy retained by the bullion coin dealer;
7.26(5) misrepresent the delivery date of bullion coins or payment for bullion coins, or
7.27the dealer or representative's professional qualifications, affiliations, or registration;
7.28(6) misrepresent any material aspect of a bullion coin, including its performance,
7.29efficacy, nature, investment value, central characteristics, liquidity, earnings potential,
7.30or profitability;
7.31(7) misrepresent the manner in which any bullion coins a consumer provides will be
7.32stored or otherwise handled once received;
7.33(8) renegotiate the terms of a sale or purchase after receiving a consumer's payment
7.34or bullion coins without first obtaining the consumer's agreement to renegotiate and
8.1offering the consumer the option to have the payment fully refunded or the entirety of
8.2the bullion coins returned;
8.3(9) fail to respond within three business days to a consumer inquiry about the
8.4delivery status of bullion coins that the consumer has paid for but not yet received or the
8.5status of a payment for bullion coins that the consumer has already provided;
8.6(10) telephone or solicit a consumer, or sell or provide the consumer's name to
8.7any other bullion coin dealer or coin dealer representative, after the consumer requests
8.8not to be contacted;
8.9(11) violate a subpoena or order of the commissioner or a court;
8.10(12) make any communication to a potential buyer or seller of bullion coins that
8.11misrepresents the relationship, if any, between the bullion coin dealer or coin dealer
8.12representative and any government agency or mint;
8.13(13) improperly withhold, misappropriate, or convert any money or properties
8.14received in the course of buying, selling, soliciting, or marketing bullion coins or
8.15investments in bullion coins to consumers;
8.16(14) misrepresent the terms of an actual or proposed purchase or sale of bullion coins
8.17or investment in bullion coins to a consumer; or
8.18(15) violate any other federal, state, or local law or rule related to selling, purchasing,
8.19soliciting, or marketing of bullion coin, investments in bullion coin, or precious metals, or
8.20any federal, state, or local law related to fraudulent, coercive, or dishonest practices, or
8.21federal, state, or local law related to taxation or labor standards.
8.22 Subd. 2. Application. From August 1, 2013, to June 30, 2014, this section shall
8.23apply to any bullion coin dealer and its coin dealer representatives if the bullion coin
8.24dealer is engaged in a bullion coin transaction or transactions with consumers which
8.25exceed $5,000 in the aggregate, as determined by the transaction sale prices, during the
8.2612-month period prior to August 1, 2013. On or after July 1, 2014, this section shall
8.27apply to any bullion coin dealer and its coin dealer representatives which is or should be
8.28registered in accordance with the provisions of this chapter.
8.29 Sec. 8. [80G.08] CRIMINAL VIOLATION.
8.30A person who conducts business as a bullion coin dealer or as a coin dealer
8.31representative without having first registered with the commissioner, or who carries on
8.32such business after the revocation, suspension, or expiration of a registration, or who
8.33violates section 80G.07, subdivision 1, clause (2) or (3), is guilty of a misdemeanor.
8.34 Sec. 9. [80G.09] OTHER ACTION; LOCAL AUTHORITY.
9.1Nothing in this chapter precludes an action under chapter 80A or preempts local
9.2government authority under section 325F.742.
9.3 Sec. 10. [80G.10] INVESTIGATIONS AND CIVIL ENFORCEMENT.
9.4 Subdivision 1. Civil action instituted by commissioner. If the commissioner
9.5believes that a person has engaged, is engaging, or is about to engage in an act, practice,
9.6or course of business constituting a violation of this chapter or a rule adopted or order
9.7issued under this chapter or that a person has, is, or is about to engage in an act, practice,
9.8or course of business that materially aids a violation of this chapter or a rule adopted or
9.9order issued under this chapter, the commissioner may maintain an action in the district
9.10court to enjoin the act, practice, or course of business and to enforce compliance with this
9.11chapter or a rule adopted or order issued under this chapter.
9.12 Subd. 2. Relief available. In an action under this section and on a proper showing,
9.13the court may:
9.14(1) issue a permanent or temporary injunction, restraining order, or declaratory
9.15judgment;
9.16(2) order other appropriate or ancillary relief, which may include:
9.17(i) an asset freeze, accounting, writ of attachment, writ of general or specific
9.18execution, and appointment of a receiver or conservator, that may be the commissioner,
9.19for the defendant or the defendant's assets;
9.20(ii) ordering the commissioner to take charge and control of a defendant's property,
9.21including investment accounts and accounts in a depository institution, rents, and profits;
9.22to collect debts; and to acquire and dispose of property;
9.23(iii) imposing a civil penalty up to $10,000 for each violation; an order of rescission,
9.24restitution, or disgorgement directed to a person that has engaged in an act, practice, or
9.25course of business constituting a violation of this chapter or a rule adopted or order issued
9.26under this chapter or the predecessor act; and
9.27(iv) ordering the payment of prejudgment and postjudgment interest; or
9.28(3) order such other relief as the court considers appropriate.
9.29 Subd. 3. No bond required. The commissioner may not be required to post a bond
9.30in an action or proceeding under this chapter.
9.31 Subd. 4. Commissioner authority. (a) If the commissioner determines that a
9.32person has engaged, is engaged, or is about to engage in an act, practice, or course of
9.33conduct constituting a violation of this chapter or a rule adopted or order issued under this
9.34chapter or that a person has materially aided, is materially aiding, or is about to materially
10.1aid an act, practice, or course of conduct constituting a violation of this chapter or rule
10.2adopted or order issued under this chapter the commissioner may:
10.3(1) issue an order directing the person to cease and desist from engaging in the
10.4act, practice, or conduct or to take other action necessary or appropriate to comply with
10.5this chapter; or
10.6(2) issue an order denying, suspending, revoking, or conditioning the registration of
10.7the bullion coin dealer or coin dealer representative.
10.8(b) Upon issuance of an order, the commissioner shall promptly serve each person
10.9subject to the order with a copy of the order and a notice that the order has been
10.10issued. The order must include a statement of the reasons for the order and whether the
10.11commissioner will seek a civil penalty or costs of the investigation, and notice that the
10.12person must within 30 days of being served with the order, request in writing a hearing
10.13and that within 15 days after receipt of a written hearing request from the person, the
10.14matter will be scheduled for a hearing. If a person subject to the order does not request a
10.15hearing within 30 days after the date of service of the order, the order becomes final as to
10.16that person by operation of law. If a hearing is requested, the commissioner, after notice of
10.17an opportunity for hearing to each person subject to the order, may modify or vacate the
10.18order or extend it until final determination.
10.19(c) If a hearing is requested pursuant to paragraph (b), a hearing must be held under
10.20chapter 14 and a final order may not be issued unless the commissioner makes findings of
10.21fact and conclusions of law in a record according to chapter 14. The final order may make
10.22final, vacate, or modify the order issued under paragraph (a).
10.23(d) If a petition for judicial review of a final order is not filed in accordance with
10.24chapter 14, the commissioner may file a certified copy of the final order with the clerk of a
10.25court of competent jurisdiction. The order so filed has the same effect as a judgment of the
10.26court and may be recorded, enforced, or satisfied in the same manner as a judgment of
10.27the court.
10.28(e) If a person does not comply with an order under this section, the commissioner
10.29may petition a court of competent jurisdiction to enforce the order. The court may not
10.30require the commissioner to post a bond in an action or proceeding under this section.
10.31If the court finds, after service and opportunity for hearing, that the person was not in
10.32compliance with the order, the court may adjudge the person in civil contempt of the order.
10.33The court may impose a further civil penalty against the person for contempt in an amount
10.34up to $10,000 for each violation and may grant any other relief the court determines is just
10.35and proper in the circumstances.
11.1(f) In addition to the authority granted under this chapter, the commissioner has all
11.2the authority provided under section 45.027 to ensure compliance with this chapter.
11.3 Sec. 11. EFFECTIVE DATE.
11.4This act is effective August 1, 2013.
