SB164 Alabama 2021 Session

Updated May 7, 2021

Senate Bill

Enacted

Current Status

Regular Session 2021

Session

Sponsor

Summary

Primary Sponsor: Tom Whatley
Republican
Session: Regular Session 2021
Title: Consumer protection, deceptive trade practices, pyramid sales structure, further provided, Secs. 8-19-3, 8-19-5 am'd.
Description: Under existing law, it is a deceptive trade practice for a person to sell or offer to sell a right to participate in a pyramid sales structure, which are plans for the sale or distribution of goods, services, or other property in which a person, for consideration, acquires the opportunity to receive a pecuniary benefit, which is based primarily upon the inducement of additional persons by that person and others, regardless of number, to participate in the same plan or operation, and is not primarily contingent on the volume or quantity of goods, services, or other property sold or distributed.
This bill would further provide for the prohibition against pyramid sales structures by excluding plans that include a bona fide inventory repurchase program and would provide requirements for bona fide inventory repurchase programs.
Amendment 621 of the Constitution of Alabama of 1901, now appearing as Section 111.05 of the Official Recompilation of the Constitution of Alabama of 1901, as amended, prohibits a general law whose purpose or effect would be to require a new or increased expenditure of local funds from becoming effective with regard to a local governmental entity without enactment by a 2/3 vote unless: it comes within one of a number of specified exceptions; it is approved by the affected entity; or the Legislature appropriates funds, or provides a local source of revenue, to the entity for the purpose.
The purpose or effect of this bill would be to require a new or increased expenditure of local funds within the meaning of the amendment. However, the bill does not require approval of a local governmental entity or enactment by a 2/3 vote to become effective because it comes within one of the specified exceptions contained in the amendment.
Subjects: Consumers and Consumer Protection